Jobs are coming back. Businesses are reopening. But a year after the epidemic hit the economy, applications for unemployment benefits will remain stubbornly, shockingly high – by some measures, higher on a weekly basis at any stage of the previous recession.
And progress has stalled: initial weekly claims under regular and emergency programs, collectively, have stalled just over a million since last fall, and last week was no exception, the Labor Department reported Thursday.
“It goes up a bit, it goes down, but we haven’t really seen much progress,” said E. Nilisabeth Conkle, a career site economist. “A year after this, I start to wonder, what will it take to fix the problem of severity? How will this really end? “
The consistently high rate of unemployment programs has been a mystery to many economists. With the epidemic still suppressing activity in many areas, it makes sense that unemployment remains high. But most businesses in the country are reopening, and trends in employment and spending are generally improving. So should unemployment filings not be reduced?
New California evidence could offer partial explanation: A report released Thursday by the California Policy Lab, a research institute affiliated with the University of California, found that 80 percent of the state’s unemployment applications filed last month were people. Laid back in the epidemic, got back to work, and then released again.
Such recurring claims were particularly common in the information sector – including many film and television workers in California who have been laid off by the epidemic – and in the hard-hit hotel and restaurant industries as well as in construction.
Researchers at the policy lab had access to detailed state information that allowed them to track individual workers through the system, something that is not possible with federal data.
California’s economy is different in many ways from the rest of the country, and the epidemic has played out differently than many other places there. But if similar patterns are caught elsewhere, it suggests that the ups and downs of the epidemic – lockdown and reopening, increasing and decreasing cases of the virus, and stiffness and ease of restraint – have stuck many workers in one type of organ.
Some workers at the restaurant recall that when indoor dining was allowed, they were fired only a few weeks later when some restrictions were re-imposed. A worker may get a temporary job at a warehouse, or take a few hours to work on a delivery application, but may be unable to find a more stable job.
“This shows the attitude of the cyclists in the system – employment, the unemployed, the unemployed, the unemployed,” said Elizabeth Pancancottti, director of policy at Employee America in Washington, which is an advocate for the unemployed. “We haven’t seen that in the past.”
What that instability means for workers ’long-term prospects is unclear. Economic research has found that extended periods of unemployment can leave workers at a permanent disadvantage in the labor market. But there is little to suggest for a period of such long-term instability.
“We don’t know what happens if you’re out of work for two months, you’re back at work for two months, you’re out of work for two months, you keep going,” Ms. Patnakotti said. .
California data shows how the economic effects of the epidemic have been concentrated in certain industries and demographic groups – and how the crisis continues to mount consequences for the most affected workers, even though it is easy for many.
According to a policy lab analysis, about 100 percent of black workers in the state claim unemployment benefits at some point during the epidemic, compared to about 40 percent of whites. Younger and less educated workers have been particularly hard hit.
This average includes filings under the Federal Epidemic Unemployment Assistance Program, which covers people who have been laid off from the regular unemployment system, a group that includes as many black workers as possible. Excessive calculations and fraudulent claims have led to record-keeping for that program. But even a look at the state’s regular unemployment insurance program, which has not faced similar issues, reveals significant numbers: three out of 10 California employees have claimed benefits during a near-crisis, and more than four out of 10 black workers.
“That degree of inequality is psychologically effective,” said Till Von Watcher of the University of California, Los Angeles, one of the authors of the report.
Many who lost their jobs at the beginning of the crisis have since returned to work. But millions do not have. The policy lab found that nearly four million Californians benefited more than 26 weeks during the epidemic, a rough measure of long-term unemployment.
“We have moved strongly into a world where the massive problem of long-term unemployment is now a reality,” said Dr. We von Watcher. Black workers, older workers, women and the less educated end up working for extended periods.
Nationally, about six million people were enrolled in federal extended-benefit programs by the end of February, covering those who ended their regular benefits, which lasted six months in most states. The aid package signed by President Biden last week confirms that those programs will continue until the fall, but the benefits alone will not prevent workers from losing their careers and mental and physical health that could lead to prolonged unemployment.
“The realization is that those people really need to be brought back to the labor market on the basis of the economic objective of a one-time pay-per-view,” she said. Said Conkley.
The latest information provides little sign of it happening. According to the Labor Department, more than 74,460,000 people applied for the state’s unemployment benefit for the first time last week, up from ૨ 6,000 in the previous week. In addition, 282,000 applied for epidemic unemployment assistance
Most forecasters expect labor market recovery to accelerate in the coming months, as warmer weather and rising vaccination rates allow more businesses to reopen, and a new injection of government aid encourages Americans to go out and spend. Federal Reserve policymakers said Wednesday they expect the unemployment rate to fall to 4.5 by the end of the year. percent, which is a significant improvement over the estimated percent three months ago.
“We’re already starting to see improvement, and I think it will start to accelerate fairly quickly,” said Daniel Zhao, an economist at career site Glassdor.
But government assistance can only do so long as the epidemic does not limit consumer behavior. Mr. Zhao said that now the pace of recovery is based on a factor beyond the scope of general economic analysis.
“The dominant factor right now is how quickly we can get vaccinated in weapons.”
