Jobless claims top 30 million as coronavirus continues to devastate economy

Around 18 percent of the workforce is currently unemployed.
Image: Job center
John Poe, a small-business owner, speaks to a state worker through an intercom, while his son Hunter waits his turn at a Mississippi job center in Canton on Wednesday, April 29, 2020.Rogelio V. Solis / AP

Breaking News Emails

Get breaking news alerts and special reports. The news and stories that matter, delivered weekday mornings.
SUBSCRIBE
By Lucy Bayly

Around 3.8 million more workers filed for first-time employment benefits last week, bringing the national jobless total to a staggering 30 million — or around 18 percent of the workforce.

Continuing claims, or the number of people receiving ongoing benefits, hit 18 million last week, far surpassing the recessionary peak of 6.6 million, according to data released Thursday from the Department of Labor.

Nationwide lockdowns led to the abrupt shutdown of the economy in mid-March, leaving millions of people scrambling to file for unemployment insurance. The sheer volume of applicants overwhelmed the system, with many states reporting website outages and hourslong delays on telephone helplines.

That has led to inaccurate accounting of the jobless, with many people reporting waits of six weeks or more.

States have ramped up staff at workforce centers, with New York adding 1,000 more workers and Texas tripling the size of its phone center staff. But that is still not enough.

According to new data from the Labor Department, California — the first state to issue a stay-at-home order — paid only 1 in 8 claims in March. With an estimated labor force of 19.5 million, 3.3 million Californians have filed unemployment applications in the four weeks after March 14.

"We're paying about $1 billion a day in unemployment insurance claims," California Labor Secretary Julie Su told NBC News. "In California just in the last six weeks alone, we had over 3.5 million people file for unemployment insurance. To put that in perspective, two weeks ago that was already more than we had in all of 2019."

Virginia and Rhode Island have only processed half their state's claims, and the Texas Workforce Commission said more than 2 million people tried to call in on just one day seeking to file for unemployment.

In many cases, chronic underfunding and aging technology have left states vulnerable. In Michigan, where jobless claims have risen by 2,200 percent, the state’s unemployment site was down for several hours.

Several state governments have teamed up with tech giants such as Amazon and Google to boost the number of claims they can process. Other states are asking retired employees to come back and deal with the onslaught of forms.

America's stunning unemployment surge during coronavirus, visualized

Some government relief programs have so far not produced the intended economic support, with the Paycheck Protection Program running out of funds within days, and many small businesses — and their employees — still desperate for a lifeline.

"Programs like the PPP were expected to keep workers on payrolls. So far, that wasn’t the case,” said Michael Gapen, chief U.S. economist for Barclays.

As states continue to lift their stay-at-home orders and reopen their economies, the unemployment numbers are expected to abate.

Nearly half of the world's workforce is at immediate risk of losing their livelihood because of coronavirus, the International Labour Organization warned on Wednesday.

The continued sharp decline in working hours, as well as lockdown measures due to the outbreak, means that 1.6 billion informal economy workers around the world “stand in immediate danger of having their livelihoods destroyed,” according to the organization's analysis.