A Word About the Horrid Spike in Unemployment Claims and Why it’s Even More Horrid Than it Appears


The report by the Department of Labor this morning listed some sectors that were particularly hard hit by “COVID-19 virus impacts”:

  • Services industries broadly, particularly accommodation and food services;
  • health care and social assistance services;
  • arts, entertainment and recreation;
  • transportation and warehousing;
  • manufacturing industries.

However, this horrid spike in claims only shows a partial picture.

Since the end of that reporting week, lockdowns have spread to many other states, and companies in those states are now struggling with how to cope. Many companies had already laid off people before the lockdowns – and this is reflected in today’s unemployment claims. But much of the fallout from those lockdowns and their secondary effects will be reflected in future reports.

The gig economy, as the US economy has been called due to the growth of business models that shift labor from employees to contract workers, is unprepared for this. Under current rules, gig workers cannot file for unemployment claims – though the stimulus package will change this. And for now, they have not filed for unemployment claims. But their hours of many have been cut, and others lost their gigs entirely.

This includes musicians whose gigs were eliminated when bars, restaurants, and clubs shut down. It includers actors and singers and artists. It includes Uber and Lyft drivers whose business has dwindled. It includes self-employed vacation-rental entrepreneurs with some units on Airbnb that no one is booking because the travel industry has shut down. It includes tech workers whose projects have been put on hold. It includes instructors and coaches of all kinds – such as figure skating coaches, language coaches, and corporate coaches. And so on. Many millions of people.

Those who are self-employed and the rug suddenly got pulled out from under them could not file for unemployment, and they’re not included in these unemployment claims.

But these gig workers, freelancers, and the self-employed may find new help: Under provisions in the stimulus bill, some of them (not all) may become eligible to file for unemployment compensation. If this comes to pass, it will be a form of life-support for those that qualify, and it will produce an additional tsunami of unemployment claims over the next few weeks.

Then there is this: this unprecedented and sudden explosion of unemployment claims caused a number of state websites for unemployment claims to crash intermittently, delaying the claims. The difficulties people had getting through the system at the end of the reporting week likely pushed a number of claims into the next reporting week. States that had intermittent crashes of their sites reportedly included New York, Oregon, Colorado, Kentucky, and other states.

The stimulus plan in Congress and various efforts by states and municipalities have provisions that would encourage and pay companies to not lay off their employees if the company is under lockdown. If a company, such as a restaurant or a manufacturer retains its employees or hires them back, it would pull these people off the unemployment rolls and back into the universe of the “employed” – even though they’re not working.

The details of these programs will become clearer over the next few days, and it will be interesting to see how many companies follow through in not laying off people or hiring them back.

A side effect is that there will be many ways for companies to game these programs as the rules are being cobbled together at breakneck speed, under heavy influence of lobbyists, and smart folks are already trying to figure out how companies can benefit from it without retaining those jobs.

Nevertheless, and despite the gaming to be expected, those efforts will be immensely welcome by companies and will soothe the pain of some of the employees, and if and when eligible, of gig workers, freelancers, and the self-employed.

Here is the first inkling of what’s in store for home sales. Read…  How Will Coronavirus Lockdowns Impact the US Housing Market? First Data Points Are Out. They’re Ugly

Enjoy reading WOLF STREET and want to support it? Using ad blockers – I totally get why – but want to support the site? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

Source Article from http://feedproxy.google.com/~r/blacklistednews/hKxa/~3/IXzY3dK77Ew/a-word-about-the-horrid-spike-in-unemployment-claims-and-why-its-even-more-horrid-than-it.html

Related Posts
BLS Admits "Survey Error" May Have Reduced Unemployment Rate By Up To 3%

Earlier we pointed out some statistical aberrations that helped explain some of the shocking surprise Read more

A Third Of Americans Who Lost Their Job Still Waiting For Unemployment Benefits To Arrive

By Tyler Durden Almost 33% of unemployment benefits that have been applied for as a Read more

The coronavirus crisis has resulted in the worst unemployment spike in American history

(Natural News) President Trump has been pushing hard for some time now Read more

White House States Obvious: Unemployment Numbers Will Get Worse Before They Get Better

Ya think? NPR: The worst of the nation’s historic job losses are Read more

Hits: 13

You can leave a response, or trackback from your own site.

Leave a Reply


The maximum upload file size: 100 MB.
You can upload: image, audio, video, document, spreadsheet, interactive, other.
Links to YouTube, Facebook, Twitter and other services inserted in the comment text will be automatically embedded.

*

Powered by WordPress | Designed by: Premium WordPress Themes | Thanks to Themes Gallery, Bromoney and Wordpress Themes