Unprecedented US job losses continue while Congress dithers over shrinking “relief” bill
18 December 2020
Catastrophic job losses continued for the 39th straight week in the United States, as documented by the latest US Department of Labor first-time unemployment claims report. The report revealed there were 885,000 filings for state benefits for the week ending December 12. This is the highest number since early September and 22,000 more than last week’s revised total of 862,000. The nearly 900,000 claims are roughly three times the 270,547 claims that were filed at this time last year.
In addition to state claims, federal claims through the Pandemic Unemployment Assistance (PUA) program, designed for self-employed, contract and gig workers, were reported at 455,037, bringing the total number of claims to over 1.3 million for the second week in a row.
Overall, roughly 9.2 million people are claiming PUA benefits while 4.8 million are claiming Pandemic Emergency Unemployment Compensation (PEUC) benefits, a 13-week extension created for jobless workers who had used up their state unemployment benefits, which can last anywhere from 12 to 26 weeks, depending on where one lives.
Barring immediate congressional action, both the PUA and PEUC programs will expire the day after Christmas, leaving some 13 million with nothing.
The unchecked spread of the coronavirus throughout the country, besides killing over 317,000 people so far, including over 3,600 on Wednesday alone, has crippled entire industries such as retail, entertainment and hospitality, leading to widespread joblessness unseen since the Great Depression and forcing millions to apply for unemployment aid.
The suffering has been particularly acute in the restaurant industry, which is dominated by low-wage workers. A new survey from the National Restaurant Association conducted November 17–30 showed overall sales were down nationally 29 percent, while 17 percent of all restaurants, more than 110,000 establishments, are closed for the “long-term” or “permanently.”
The job claims report notes that for the week ending November 28, over 20,646,000 people were claiming some form of unemployment benefit, an increase of over 1.6 million from the week prior and roughly 19 million more compared to this time last year. While the holiday season typically sees an uptick in seasonal hirings, last month’s November jobs report showed that only 245,000 jobs were added, the least amount of jobs added since the pandemic began in March.
Millions are receiving only the most meager of benefits. The Department of Labor reported the average weekly benefit as of October 31 at $319.60 a week, or less than $17,000 a year. Many workers have already used up all of their benefits for the year or have yet to receive any payments at all.
In Nevada, the state with the second highest official unemployment rate behind Hawaii, at over 10 percent, roughly 142,000 people have already used up state benefits, and, barring congressional action, will be ineligible to begin receiving state unemployment relief until mid-March 2021 or later.
In Wisconsin, Amy Pechacek, the transition director for the Department of Workforce Development, (DWD), informed state lawmakers that over 35,000 people have been waiting for more than three weeks to learn whether or not their unemployment claims will be accepted. Pechacek also cited data showing that 3,354 people had been underpaid by a combined $986,592, while 3,980 people have been sent notices alleging overpayments totaling $2.4 million.
A recent report from the DWD showed that between March 15 and October 10 the agency paid first-time claims for roughly 75 percent of the 662,731 unemployed people who applied, leaving 169,277 claims unpaid. While some of those unpaid claims were because applicants withdrew their claims, the majority had either been denied or were “still pending.” Even for the roughly 75 percent of claims that were paid out, only 53 percent of those payments were made within two weeks or less, while 24.7 percent took more than five weeks to get paid. In the early stages of the pandemic, between March and April, on average it took 40 days after a claim was accepted for someone to expect payment.
Along with expiration of unemployment benefits, a Centers for Disease Control and Prevention eviction moratorium is also ending on December 31. The order was meant to cover residents who lived in states that had not already instituted bans on evictions following the July expiration of eviction protections included in the CARES Act. While the broad federal order, on its face, seemingly protected residents from being evicted, data from the Eviction Lab at Princeton University shows that in 27 cities at least 162,563 evictions have been filed during the pandemic, including over 3,500 last week alone.
Speaking to NBC News, Amanda Frank, 39, from Wooster, Ohio, explained what it has been like for her family trying to survive after being evicted. After falling behind on rent after her boyfriend was laid off, Frank applied for rental assistance and was able to pay back-owed rent. However, her landlord still took her to court and the judge ruled against her in the eviction proceeding, claiming that she should have paid the rent “on time.”
The judge gave her and her family one week to vacate the house she had been renting for over a year with her boyfriend and daughter. A week later, at 3 p.m., as Frank and her family were packing up their things, representatives from Frank’s landlord, Gerald Swartzentruber, showed up and began throwing her belongings out of the house.
“They broke a lot of my things by throwing them out the door,” Frank told NBC. “That was the most devastating thing I’ve ever had to go through.” For now, Frank and her boyfriend are living in their car while her daughter has been sent away to live with Frank’s ex-husband.
As millions struggle to survive, Wall Street continues to celebrate, with all three indices closing at or near record highs on Thursday. The S&P 500 closed at 3,722, a new record, the Nasdaq composite also set a new record at 12,765, while the Dow Jones Industrial Average eclipsed its previous record high from earlier in the month, ending the trading day at 30,303.
Despite ongoing job losses, evictions and expiration of unemployment benefits, driving some eight million people into poverty, representatives from the two big business parties have yet to reach an agreement on a supposed “relief” bill, despite months of alleged negotiations. The latest iterations of the $900 billion bill have reportedly nixed state, local and tribal aid, along with a corporate liability shield, while reducing federal unemployment benefits to $300 a week for only 10 weeks, as opposed to the 16 that was touted a week ago.
The reduction of six weeks of unemployment payments would mean, according to researchers with the Economic Policy Institute, that some 11.2 million people would reach a “benefits cliff” at the end of February, as they would be unable to apply for state benefits while having exhausted their federal unemployment relief.
The package is said to include paltry stimulus checks that have also been halved, from the $1,200 included in the CARES Act to an insulting $600, not enough to pay the average median monthly rent on a two-bedroom apartment anywhere in the country. The legislation would not retroactively cover unemployment payments for those that have been without work since the end of July, and there are rumors that those who have collected federal benefits would be ineligible to receive the miserly check.
However, the bill does contain an estimated $120 billion windfall for the top one percent, according to an analysis by Adam Looney, a senior fellow with the Brookings Institution. Within the bill there is a provision that allows businesses to deduct expenses that were paid for through the government-created Paycheck Protection Program (PPP), which lawmakers on both sides of the aisle agree deserves robust funding, with an estimated $268 billion earmarked for the program in the bill.
The “double dip” would allow businesses that applied for a PPP loan to claim the expenses the loan covered as their own and deduct them against their taxes. Through August, businesses have received $525 billion through the program, with over 25 percent of those funds going to just 1 percent of recipients. Looney notes that if the total funding through the PPP program with the latest infusion of funds totals $700 billion, “and the average tax rate of business owners is 29 percent, that is a tax windfall of $203 billion. Even if only 60 percent of this goes to the top 1 percent, that’s a $120 billion windfall for well-off business owners.”
Comparatively, the latest bill only contains $25 billion for rental assistance, $51 billion for health care, and $82 billion for education.
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