New California, Nationwide Unemployment Claims Remain High for Third Week in a Row

Statewide unemployment claims climbed past 2 million during the first week of April according to a new Department of Labor report.

The weekly report also found that California’s 925,000 newly unemployed workers were a major part of last weeks 6.6 million that filed for unemployment nationwide. While it was lower than the 6.9 million who filed the previous week, the overall number remains high for the third week in a row. The fallout of nationwide COVID-19 coronavirus containment measures and stay-at-home orders have shut down many sectors of the economy, which have led to widespread layoffs, furloughs, and hiring freezes across the nation.

California has had over 2.1 million new unemployment claims in the last three weeks alone, 100,000 claims shy of where it peaked during the Great Recession. The new figures also mean that 1 out of every 9 California workers is now out of work. Of those, about 2 million have filed for unemployment benefits.

“It’s especially confusing for many people because there is no one really to blame for this,” said San Francisco-based economist Peter Szell. “It’s a pandemic. You can blame people for stay-at-home-orders and only allowing essential businesses to stay open, but leaders of both parties are guilty of that. You can blame a gig and low-wage economy for inflating figures, but that is hard to claim when all levels of the economy are hit. You can argue mismanagement over the crisis, but most leaders and lawmakers never had to experience this sort of thing before.”

“You can even blame leaders like Trump and Newsom, but it caught them off guard too. They have made mistakes on both the federal and state level, but they’ve also been working together against all odds. The Trump Administration has been working hard to stabilize the economy and has shown some success in rebounding the stock market, while Newsom has been flattening the curve in California through many measures with most states now copying what he did to avoid a fate like New York.”

“The big thing is that this is biological, and it’s hard to put that blame on anybody.”

The high number of claims in California has summarily overburdened the Employment Development Department (EDD). It’s been to the extent that the EDD has had to hire more people just to keep up with new claims and that extra CARES ACT federal payments will now come later due to the sheer number of new claims. Other factors, such as increasing the minimum wage in the face of higher unemployment figures, is also exacerbating unemployment levels.”

While there has been some good news recently, such as new coronavirus cases going down and the stock market quickly improving, unemployment levels may take longer to improve. According to the Center for Business and Policy Research, California may see unemployment levels as high as 18.8 % this year, with the Bay Area averaging 17%.

“We’re going to have rates somewhere between the Great Depression of the 1930’s and the Great Recession of the late 00’s and early 10’s,” continued Szell. “We’ll get past the pandemic soon enough, but economically it will take a little longer. This was a scenario many never had even thought of.”