Deluge Continues: 26 Million Jobs Lost In Just 5 Weeks

Apr 23, 2020
Originally published on April 23, 2020 8:59 am

Updated at 8:46 a.m. ET

The number of people forced out of work during the coronavirus lockdown continues to soar to historic highs. Another 4.4 million people claimed unemployment benefits last week around the country, the Labor Department said.

That brings the total of jobless claims in just five weeks to more than 26 million people. That's more than all the jobs added in the past 10 years since the Great Recession.

Still, the pace of job losses is slowing. About 5.2 million filed during the week that ended April 11 and last week was the third consecutive week of declines.

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The coronavirus crisis has suddenly ended a decade of remarkable job growth. The unemployment rate, which sank to nearly 50-year lows, is expected to soar into double digits.

The pace of job losses has the broader population worried. A Gallup poll found that a quarter of working Americans believe they will lose their jobs in the next 12 months. That's a record high.

The wave of job cuts was concentrated at first in the travel and energy sectors, but have increasingly spread to white-collar jobs such as lawyers, accountants and consultants.

"The lack of precedent means we have no idea how far this will go, but our initial hope that claims would drop below one million per week by the end of May is now touch-and-go," says Ian Shepherdson, chief economist at Pantheon Macroeconomics.

To stem the flow of layoffs, Congress created the $349 billion Paycheck Protection Act, which gives companies money if they retain or rehire workers.

The fund ran out of money in just two weeks and the Senate approved a bill this week to replenish it.

As more and more workers lose jobs, many states say they are seeing the trust funds used to pay unemployment benefits begin to run low.

Nearly half the states say they have seen double-digit decline in their funds, The Wall Street Journal reported this week.

New York, which has burned through half of its fund, has asked for a $4 billion no-interest loan from the federal government to cover unemployment benefits. More than a million people in the state have lost their jobs.

Massachusetts says its fund is also down by half since mid-February, and California has seen a 40% decline.

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More catastrophic numbers from the Labor Department, which says more than 4 million Americans filed for unemployment benefits last week. NPR's Jim Zarroli is our go-to reporter on these weekly jobs numbers. Hi, Jim.

JIM ZARROLI, BYLINE: Good morning.

KING: So how bad is it?

ZARROLI: Very bad, horrible. We have had 26 million people filing for unemployment insurance over just the past five weeks. If you look at individual states last week, California and Florida both notched more than a half million new people filing for unemployment. In the country as a whole, 9.4% of the working-age population has filed for unemployment since mid-March. That's twice the share of the population that filed during the Great Recession.

So you know, more and more people losing their jobs - people can't work. Theaters, restaurants closing; factories have been shutting down. It's just, you know, like a wholesale collapse in the labor market, the kind we've never seen before. People will be telling their grandchildren about this.

KING: This is now our fifth week of doing interviews of this sort when the numbers come out. Let me ask you to put this week in perspective. How does it compare to last week?

ZARROLI: Well, we had fewer people lose their jobs than the week before, and that is maybe because, you know, so much damage has already been done. I mean, you can only, you know, close a restaurant or a factory once. But make no mistake - these are really huge losses by historic standards. It's like the economy has just frozen in place.

And this is showing up in a lot of other ways, too. I mean, surveys show that people are a lot less confident about their economic prospects, for instance. Gallup says 25% of working Americans think they're going to be laid off in the next year. You're seeing home construction down by nearly a quarter. Oil prices are way down 'cause there's less demand, which hurts states like Texas that depend on the energy sector for jobs.

KING: Jim, what does this mean for people who are still fortunate enough to be working?

ZARROLI: Well, one of the things we're seeing is more people working part-time. So rather than fire people altogether, companies are maybe just reducing their hours. Another thing we're seeing - at least anecdotally - is that companies are cutting wages. Instead of losing your job, you maybe make less money. And of course, you know, getting a pay cut is better than losing your job altogether, but it also means people have less money to spend and they're going to have more trouble making ends meet. You're going to see a lot of people just tapped out, and that's bad because the American economy really depends very heavily on consumer spending. And one of the results of that is, even when this pandemic is over, it's going to take that much longer for the economy to bounce back.

KING: Let me ask you, lastly - if so many people are filing for unemployment, who, ultimately, is paying for it?

ZARROLI: Well, the federal government is stepping in this time to pay for part of it. But the states mainly have the responsibility to pay for it, and they have trust funds that they use to pay for unemployment benefits. But the - you know, what happens is they sort of build up these funds in good times so people have benefits when times get bad, like now.

And there's growing evidence right now that these funds are just running down. A lot of states have seen double-digit losses in their funds. New York has applied for a federal loan to replenish its fund, and that's something you're going to see a lot of other states do as time goes on. And they'll have to find a way to pay off these loans, and that means tax increases.

KING: OK. NPR's Jim Zarroli.

Jim, thanks so much.

ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.