U.S. jobless claims down, still over 2M for week
But Illinois sees a more dramatic drop in filings by gig workers, as state prepares to implement work-share program
Storefronts are still idle across Illinois, although there’s hope as the state moves on to the next phase of the plan to reopen the economy on Friday. (One Illinois/Ted Cox0
By Ted Cox
U.S. unemployment claims dropped slightly, but still topped 2 million for the week, according to data released Thursday by the U.S. Department of Labor.
The Labor Department reported that 2.1 million U.S. workers filed for benefits, the lowest weekly total since 3.3 million filed in mid-March, shattering the previous record of 695,000 in a week set during the 1982 recession.
That was down from the 2.4 million who filed for benefits the week before. But it still means 40 million U.S. workers have lost their jobs in the eight weeks since the economic crisis stemming from the COVID-19 pandemic took hold, with the new one-week high being the 6.9 million who filed the last full week of March.
Illinois saw better news, according to the national data. Claims dropped to 58,359 last week from almost 73,000 the week before, a 20 percent decline of 14,421 week to week. Claims filed by so-called gig workers including independent contractors and freelancers dropped ever more steeply, from the 74,515 who filed in the first week they were eligible starting May 11 to 15,450 last week.
That’s no doubt in part due to the way Gov. Pritzker and the Illinois Department of Employment Security urged those workers to file for conventional unemployment and be rejected before they’d be granted the expanded benefits — a requirement of the federal Pandemic Unemployment Assistance program approved by Congress in a COVID-19 relief package.
Many idled workers have complained that the IDES system has been slow to process claims or deal with bureaucratic snafus, but Pritzker has insisted it’s been bolstered and that the new system to accommodate gig workers has met demand — seemingly borne out by the dramatic drop in new claims last week.
The state can now move on to implementing a work-share program, which grants prorated benefits to workers who’ve seen their hours cut. The General Assembly approved that program in 2014, but it was never put into action by former Gov. Bruce Rauner. Pritzker has called it “an excellent program,” and has suggested that IDES would eventually put it in place, even though it has thus far had its hands full dealing with conventional unemployment claims and expanded claims for gig workers.
IDES confirmed that late last week, although it didn’t seem imminent. Department spokeswoman Rebecca Cisco issued a statement saying, “At this time, IDES is in the early stages of beginning the process to search for and hire a program manager for this project.”
The Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign joined in a study in early April that estimated Illinois could save as many as 124,000 jobs in the coronavirus downturn if the work-share program were fully implemented. ILEPI Policy Director Frank Manzo IV said Thursday the estimates proved accurate, with IDES reporting that state nonfarm payrolls lost 762,000 jobs in April, more than 800,000 compared against the year before, consistent with the study’s estimate of 779,000 lost jobs.
Based on that data, according to Manzo, Illinois “could have saved between 43,000 and 124,000 jobs, boosted total worker income by over $1 billion, and saved Illinois as much as $1 billion in unemployment-insurance costs over six months” had work-share been in place, although he emphasized that was projected from the program being fully implemented, comparative to the way it operated in Minnesota during the Great Recession a decade ago.
“The real value of a work-share program would begin next week, during the ‘Recovery’ phase of the Restore Illinois plan,” he added. “That is because retail establishments, offices, and many manufacturers can reopen — but at 50 percent capacity. Instead of continuing to furlough 50 percent of the workforce, these companies could have retained all of their workers and cut all their hours by 50 percent. The workers would have received half their usual wages, prorated unemployment benefits from the state of Illinois, and the $600 (weekly) pandemic unemployment benefits from the federal government. They also would have kept their health insurance and retirement coverage.
“If Illinois’s work-share program had been implemented it would have been a win-win-win for workers, businesses, and the state of Illinois. ”
The Labor Department reported Thursday that the “advance seasonally adjusted insured unemployment rate was 14.5 percent for the week ending May 16, a decrease of 2.6 percentage points from the previous week's revised rate.” But the May unemployment rate is still expected to rise from the 14.7 percent reported in April when the U.S. Bureau of Labor Statistics releases the monthly figure in June.