The Department of Labor reported Thursday that another 2.4 million Americans filed for unemployment last week continuing a nine-week stretch of new jobless claims shattering the previous record for the most first-time filings in a single week.
More than 38 million Americans have now filed for unemployment since pandemic lockdowns initiated an economic self-destruction wreaking havoc on American livelihoods and contributing to the great anxiety that the pandemic presents to a nation in distress.
The April jobs report released from the Department of Labor this month shows the U.S. reached record levels of unemployment within the span of just two months nearing 15 percent since it officially began being recorded in 1948. Economists estimate the nation hit 25 percent unemployment during the Great Depression which took years to climb. At the rate Americans are losing their jobs today, the U.S. will likely rival those numbers from the depression 90 years ago far sooner. The previous record held for most new claims filed within a span of seven days was set in 1982 with 695,000 new filings.
To confront the rapidly rising jobless claims in March, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act beefing up unemployment benefits with a flat $600 a week on top of whatever states already provided creating a whole host of other problems on its own.
By ramping up jobless benefits by an exorbitant amount, lawmakers incentivized workers to seek the government handout over remaining in their full-time position while making it far easier to qualify for the insurance.
A pair of economists at the conservative Heritage Foundation estimate that Congress likely inflated unemployment by nearly 14 million with expanded benefits and eligibility requirements. The median full-time worker earning less than $48,000 a year, they found, would bring home 15 percent more from government assistance than their pre-pandemic wages offered. Meanwhile, essential workers have seen no increase in pay throughout the crisis.
The increased benefits have posed an obstacle for businesses trying to rehire laid off staff as is required in the provisions for federal loans issued under the Paycheck Protection Program (PPP) passed in the CARES Act to be forgiven.
One Washington state spa owner was astonished at the reaction of her employees who were upset she secured a rare loan under the PPP before the eventually depleted funds were replenished in April.
“It was a firestorm of hated about the situation,” Jamie Black-Lewis told CNBC. “I couldn’t believe it. On what planet am I competing with unemployment?”
While the increased benefits are expected to expire in July, House Democrats passed a $3 trillion stimulus package dubbed the HEROES Act that seeks to extend them through next year.
Rachel Greszler, one of the Heritage researchers who studied Congress’ generous unemployment package said such an extension with no cap on earnings would be even further counterproductive to the nation’s goals.
“The HEROES Act’s perverse unemployment benefits threaten the well-being of the workers they claim to want to help,” Greszler told The Federalist. “Instead of tantalizing workers with unemployment benefits equal to 150 or 200 percent of their usual earnings, policymakers should be focused on helping the one-in-five Americans who have lost their jobs reconnect with their previous employers or find new employment instead of incentivizing them to remain unemployed until 2021.”
The nation’s economy however, continues to crumble even as states have begun to partially reopen to blunt the impact allowing businesses to operate with only a fraction of their original capacity.
A new report released last week shows more than 100,000 small businesses have already permanently gone under as a result of the lockdowns.