An avalanche of unemployment claims that began nearly two months ago continued Thursday with 3.17 million workers filing for support. Economic stoppages prompted by the coronavirus continued to drag the economy toward unprecedented levels of job loss.
The new numbers include a segment of California workers who historically have been left out of the jobless count: gig workers, freelancers and other informal workers. They were newly made eligible for unemployment aid under coronavirus relief legislation passed in March, but could not file for benefits until last week. Some found frustration when they tried to claim the new benefits, however.
Californians filed almost 400,000 claims under the program last week, called Pandemic Unemployment Assistance, according to state Employment Development Department data.
Over the past seven weeks, national claims stood at a staggering 33.5 million.
The unemployment figures are “dramatic, disappointing and heartbreaking,” said Stephen Levy, director of the Center for Continuing Study of the California Economy.
The pool of newly laid-off people will dry up soon, he said, so the weekly numbers of new initial claims will decline.
That’s already happening: Claims filed during the week ending May 2 were 18% less than the 3.8 million claims tallied for the previous week. Though still historically high, the latest figures are below the record of 6.9 million unemployment claims reported in a single week in late March.
But Levy predicted a long, slow recovery. Businesses embracing a loosening of virus-fighting restrictions might face disappointment when they reopen their doors.
“The problem isn’t that it will get worse after June; the problem is that it isn’t going to get better quickly,” Levy said. “Companies, governors and mayors can set conditions for reopening, but they can’t make the customers come.”
Gov. Gavin Newsom outlined rules Thursday for when counties could gradually loosen restrictions. Sonoma County is allowing some retailers to offer curbside pickup Friday. Other Bay Area jurisdictions are taking a wait-and-see approach. The Alameda County Public Health Department said it, along with the city of Berkeley and five other counties that have coordinated with it in the past, would “study” whether to reopen some businesses.
San Francisco and Marin County appeared to break from the six-county group, however, saying they would allow some businesses like florists and bookstores to serve customers at storefront entrances or at the curb beginning May 18. Napa County, which is not part of the group, did not set any dates for reopening in a revised health order it issued Thursday, but suggested in an online FAQ accompanying the order that some businesses could reopen as soon as Friday.
In California, 318,064 people filed regular unemployment claims for the week, a slight decrease from the previous week, bringing the state’s seven-week jobless total to 4 million.
Newsom said the state has paid out $10.1 billion in unemployment insurance to Californians since mid-March. That includes some money from the state insurance fund and some from federal programs.
This week’s California claims are the first to include freelancers, gig workers and the self-employed, who are eligible for the new Pandemic Unemployment Assistance program established by Congress. California’s Employment Development Department did not create a way to apply for the assistance program until last week. Other states also struggled to set up application systems.
Last week’s figures included 583,699 Pandemic Unemployment Assistance claims from 23 states, the Department of Labor said.
The rules of the benefits program disadvantaged some who mostly freelance for a living. Marine Corps veteran Jason Gittens of San Rafael learned his trade as a freelance cameraman and lighting technician through the GI Bill. Over 18 years, he built up a clientele who hired him for concerts, bike and motorcycle races, surfing contests, corporate conferences and other events. All that has now ground to a halt.
“It’s pretty much been a nightmare,” he said. “It has gone absolutely dark. I don’t have anything coming down work-wise, and I don’t expect to.”
He applied for regular unemployment even before the new Pandemic Unemployment Assistance system was available, because he gets about 10% of his income from a company that hires him as an employee. He qualified to receive $193 a week plus the temporary $600 weekly boost from the Cares Act, which goes until late July. But when the Employment Development Department finally started taking applications for the federal benefits, he confronted a difficult reality.
An earlier version of this story misstated the drop in jobless claims from two weeks ago to last week. They dropped by 18%.
Those with hybrid incomes — part as employees, part as freelancers — are barred from the new program, even when the amount they would receive under Pandemic Unemployment Assistance would be larger. Instead, their benefits are based on what they earned as employees, even when it’s just a sliver of their income. Many freelancers are mobilizing to try to get this changed.
Gittens’ freelance income would qualify him for the maximum state benefit of $450 a week, plus the $600 a week federal boost. The lower benefit under his “paltry” employee income means he’s getting $1,000 a month less.
“I’m just stuck with what I’ve got and just have to suck it up and take it,” he said. “If I’m not back to work soon, I don’t know what I’m going to do.”
With a wife and two children to support, he fears exhausting his savings and being out on the street from their rental home. Although he knows the state now lets renters defer payments, he’d still owe back rent down the road.
The economic bloodletting has spared few industries, including San Francisco tech companies once worth tens of billions of dollars. Companies from Airbnb to Zenefits are cutting staff. Uber said Wednesday it would lay off 3,700, the largest such round for a San Francisco company in the present crisis.
The limited reopening plans may alleviate some economic pain, but some jobs may be gone for good, said Daniel Alpert, senior fellow on macroeconomics and adjunct professor at Cornell Law School.
“You’re going to have a proportion of these low-quality jobs that simply will not go back,” to the way they were before, Alpert said. He noted that sectors like retail were struggling before the pandemic. With demand stalled, some shuttered shops — and their workers — will not recover.