New data from the Department of Labor released Thursday show more than 3.2 million people filed new jobless claims as the economic destruction over pandemic panic continues to take its devastating toll.
That brings total new unemployment claims to more than 33 million, where one in five American workers in the labor market have filed for first-time benefits since mid-March lockdowns.
— Elizabeth Landers (@ElizLanders) May 7, 2020
The nationwide unemployment rate is expected to reach between 15 to 20 percent when the new jobs report comes out Friday. The latest unemployment rate reported by the Bureau of Labor Statistics was 4.4 percent in March before the coronavirus pandemic kicked off the widespread economic self-destruction landing millions out of work with pro-longed lockdowns still in place two months later.
To confront the unprecedented jobs losses, Congress rushed through several stimulus packages spending upwards of $3.5 trillion on immediate relief including funds for small businesses, hospitals, enhanced testing capability, state and local governments, and direct payment checks to individuals. Congress also beefed up unemployment insurance with an additional $600 a week while radically expanding eligibility requirements allowing millions more to go on unemployment who might otherwise remain on payroll with an employer granted assistance under a Paycheck Protection Program loan that mandate staff salaries to stay intact.
A new report from the conservative Heritage Foundation unveiled last week shows Congress likely made the problem worse through its expansion of unemployment benefits that incentivize collecting government handouts over earning a paycheck. According to the report, the median full-time American worker earning $48,000 a year would take home 15 percent more from unemployment than remaining in their full-time job.
The pair of Heritage economists estimate that Congress could inflate unemployment over the pandemic by upwards of 13.9 million as workers are able to rake in more on government insurance than they were previously making absent any income caps implemented in the CARES Act in March. In other words, a third of today’s newly unemployed might have been avoided had Congress included responsible measures to cap benefits at 100 percent of a beneficiary’s prior income with tightened eligibility requirements rather than the self-verification process featured instead.