New data from the Department of Labor Thursday show another 2.1 million Americans filed for unemployment last week as the economic self-destruction over the ongoing pandemic continues to take its devastating toll.
More than 40 million Americans have now filed new jobless claims in just ten weeks since pandemic panic spurred nationwide lockdowns in March, destroying upwards of 100,000 small businesses and forcing millions of workers declared non-essential by the government to food pantries despite several rounds of federal stimulus passed by Congress. While Thursday’s new jobs numbers show an 8-week decline in new first-time filings, last week’s unemployment figures still shatter the previous record for most claims in a single week set with 695,000 in 1982.
The April jobs report unveiled earlier this month shows the United States has reached record levels of unemployment in just two months nearing 15 percent, a number not seen since jobs numbers began being recorded by the federal government in 1948. Economists estimate that the U.S. neared 25 percent unemployment during the Great Depression and took years to build up to.
Even as states begin to open up, partial reopenings have kept millions of businesses closed while state and local leaders continue to move the goalposts for reopening. Some have even begun to declare that stay home orders must remain in place until mass testing or a vaccine is produced, which could optimistically take at least another 12-18 months if not 3-5 years.
To blunt the pandemic’s impact, Congress created the Paycheck Protection Program (PPP) to provide forgivable loans to sinking small businesses and beefed up unemployment benefits by an additional $600 a week on top of state benefits in the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act. The expanded unemployment insurance however, is set to expire in July, sparking debate among lawmakers on Capitol Hill on whether to extend the new benefits or reform their incentives for individuals to seek government assistance.
A pair of economists at the conservative Heritage Foundation found Congress’ generous handouts provide the median American worker earning less than $48,000 a year with 15 percent more in take home pay. The team of researchers then estimated that Congress likely inflated unemployment by nearly 14 million with new benefits and loosened eligibility requirements. The new benefits have also created problems for small businesses trying to rehire staff to qualify for loan forgiveness under the PPP as laid off workers are raking in more from the government than their pre-pandemic paychecks.
Earlier this month, House Democrats passed a clean extension to the increased benefits in a $3 trillion stimulus bill dubbed the “Heroes Entering Roles Of Education Service (HEROES) Act,” to keep the added $600 a week to unemployed workers intact through the end of the year. The legislation littered with long-advocated progressive programs that have nothing to do with the coronavirus however, was declared dead on arrival in the Republican-controlled Senate, who are now negotiating on what the latest relief package will include.
