Jobless claims rise for first time since March
Another 1.4M file for benefits; Illinois claims drop, but increase for gig workers
Workers in service industries like restaurants have been hit hard by the economic collapse stemming from the pandemic, threatening their health insurance and coverage for their children. (Shutterstock)
By Ted Cox
New claims for unemployment rose last week for the first time since a record 6.9 million idled workers filed for benefits the last full week of March as the COVID-19 pandemic took hold.
The U.S. Department of Labor reported Thursday that 1.4 million people filed for benefits last week, up 109,000 from the week before. It ended 15 straight weeks of declines, extending back to early April, although new claims had largely leveled off in recent weeks.
Illinois claims declined, however, to 36,000, down from 38,000 the week before. But claims for expanded federal benefits for independent contractors and so-called gig workers not covered by traditional unemployment insurance rose sharply again, to 74,000 from 57,000 the week before.
It’s unclear how many of those claims under the Pandemic Unemployment Assistance program were fraudulent. Gov. Pritzker spoke Wednesday of a rampant nationwide scheme in which people who remained employed and never filed for benefits were receiving debit cards and formal letters in the mail from state unemployment agencies suggesting that they had registered. Pritzker and other experts say it’s unclear how scammers expect to profit from those claims, but it appeared as if key data, such as Social Security numbers, had been compromised.
“The national program was poorly designed and susceptible to fraud,” Pritzker said, calling it a “systemwide failure.” The Illinois Department of Employment Security issued a news release on the fraud Wednesday, stating it is “aggressively cracking down on this fraud network,” along with federal agencies, and asking anyone who’s received such an unauthorized card or letter to report it.
The rise in unemployment claims nationally was expected to have an effect on ongoing negotiations in Congress for additional COVID-19 relief. A $600-a-week increase in benefits included in the CARES Act was set to expire at the end of this week. Proponents of the extra benefits have said it’s enabled idled workers in many cases to pay their bills and make their housing payments.
Just this week, the U.S. Census Bureau pointed out that the economic collapse stemming from the COVID-19 pandemic threatened to have a cataclysmic effect on health care. The bureau pointed out that unemployment in the service industry stood at 27.1 percent in April, affecting 40 million workers in food preparation and serving; building and grounds cleaning and maintenance; personal care and service; and retail sales — almost a quarter of the U.S. workforce. According to the bureau, more than half of those workers, 55 percent, had health insurance through their employer. That threatened to have a ripple effect on children, with an estimated 38 million people 19 and under covered under their parents’ employer health insurance, including about a quarter of children whose parents work in those service industry. The bureau estimated that, as of available data two years ago, that meant 4.3 million children were in danger of losing their health insurance under parents in those industries.
According to the U.S. Labor Department, “The advance unadjusted insured unemployment rate was 11.2 percent during the week ending July 11, a decrease of 0.7 percentage point from the prior week.” That was consistent with the June unemployment rate put at 11.1 percent by the U.S. Bureau of Labor Statistics.
The department reported that 31.8 million idled workers nationally were receiving some sort of unemployment benefits through July 4, up from 1.7 million a year ago.