Unemployment soared by more than 1,000 percent over the past week, with a record 3.28 million Americans filing jobless claims.
The numbers capped off a week in which Donald Trump bragged that his administration had “tremendous control” over the raging pandemic and its fallout.
Pennsylvania was hit the hardest. The state saw a 20-fold increase from the previous week, jumping from 15,439 claims to 378,908.
Pennsylvania Gov. Tom Wolf closed all nonessential businesses back on March 16 to slow the spread of COVID-19.
According to the Philadelphia Inquirer, more than half a million Pennsylvanians have become unemployed since that order was announced. The number far exceeded the 61,181 weekly new state unemployment claims filed in early 2010 during the last recession.
The Inquirer article noted one possible reason for the high unemployment numbers in the state: “Almost half of Philadelphia’s workforce is made up of low-wage service workers, many of whom work in the retail and hospitality industry.”
Both industries have been hit hard by the closures and social distancing efforts.
“All the states that have initiated shutdowns will be in a similar boat,” Tom Jackson, a Philadelphia-based economist told the outlet. “The good thing for Pennsylvania, looking forward, if you keep the number of cases low, that can help get you back to work a little quicker and get you feeling confident that the shutdown worked and people feel safe.”
Other states that have implemented aggressive restrictions also reported a massive spike in unemployment claims.
Ohio saw the second-largest number of new unemployment claims, with more than 180,000. New Jersey was third, with about 146,000 claims.
Gbenga Ajilore, senior economist at the Center for American Progress, said in an email on Thursday that Pennsylvania’s early shutdown and service sector were likely the cause of its high number. “Low wage workers,” he observed, “are the most susceptible to this kind of recession.”
He added that “the large relative number may not be a completely negative factor as it might speak to a good system that allows people to easily file for claims. Unemployed workers in other states have had difficulty accessing the state [unemployment insurance] system and have not been able to file.”
Stephen Herzenberg, executive director of the Keystone Research Center, said in an email that while one week of data could be a “statistical aberration,” Pennsylvania’s numbers might also be higher because “other states have paid sick leave, paid family leave, or short-term disability, or a combo of those — we do not.”
On the other hand, the state has a stronger unemployment insurance system “than most states” and “covers more people.”
Ajilore predicted that in the long run, states that immediately shut down their economies will do better, “as long as they tie this with extensive testing so that they can figure out where the hotspots are and then provide medical services to combat the epidemic.”
The national totals far exceeded the previous record — 695,000 jobless claims in October 1982. The Senate passed a $2 trillion economic rescue bill on Wednesday night that could help businesses that agree not to lay off workers; the House is expected to pass the bill by Friday.
In a statement on Thursday, Economic Policy Institute senior economist and director of policy Heidi Shierholz wrote, “I have been a labor economist for a very long time and have never seen anything like this.”
She predicted that by summer, 14 million workers will have lost their jobs due to the crisis without action and urged “further help from policymakers” beyond what the Senate has already approved.
As recently as March 15, Trump was claiming the virus was “something we have tremendous control of.”
“This is a very contagious — this is a very contagious virus. It’s incredible,” he said at the time. “But it’s something that we have tremendous control over.”
However according to a New York Times report last week, Trump also quietly asked states to hold off releasing their jobless numbers amid the outbreak, telling them to wait until his administration could publish the number itself.
“In an email sent Wednesday, the Labor Department instructed state officials to only ‘provide information using generalities to describe claims levels (very high, large increase)’ until the department releases the total number of national claims next Thursday,” the Times reported.
The email, the Times wrote, “noted that the reports were monitored closely by financial markets and should therefore remain embargoed. ‘States should not provide numeric values to the public,’ wrote Gay Gilbert, the administrator of the department’s Office of Employment Insurance.”
Published with permission of The American Independent Foundation.