Millions File Unemployment Claims for 9th Straight Week

    2.4 million filed in the week ending May 16.

    A restaurant employee washes their hands.
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    Nearly 40 million Americans have filed initial unemployment claims in the past nine weeks.

    At least two million Americans have filed initial unemployment claims for the ninth straight week.

    In the week ending May 16, 2.4 million filed initial claims, down 249,000 from last week. The prior week’s total was revised from 2.98 million to 2.69 million. The highest weekly total came in the last week of March when 6.9 million filed initial claims.

    In nine weeks, nearly 40 million have filed for unemployment. In April, 20.5 million jobs were cut and the unemployment rate reached 14.7 percent, the highest since the Great Depression. Of that amount, 5.5 million came from the foodservice industry. In March, 500,000 jobs in the foodservice industry were lost. 

    The largest increases in initial claims for the week ending May 9 were in Florida (48,222), Georgia (14,420), Washington (8,615), New York (4,309), and South Dakota (1,340).

    Although weekly initial claims remain in the millions, the volume has consistently trended downward in the past several weeks.

    At the same time, a majority of states have allowed restaurants to reopen dining rooms, opening the door for many employees to return to work. But that process isn’t as easy as it sounds, particularly for independent restaurants.

    According to an NYC Hospitality Alliance survey of 483 NYC restaurants and bars, two-thirds of respondents said they need at least 70 percent capacity to reopen. Forty-two percent aren’t sure if they’ll use funding from the Paycheck Protection Program because it requires companies to rehire staff to pre-pandemic levels by June 30. A restaurant’s inability to rehire works reduces the forgivability of the loan, meaning operators would have to repay more.

    “This eye-opening data adds to the challenges our industry is facing as we look to reopen the economy,” said Andrew Rigie, executive director of the NYC Hospitality Alliance, in a statement. “To help restaurants and bars reopen and stay open safely, we need to reimagine how we use public space—sidewalks, streets, pedestrian plazas and parks—and allow businesses to set up and serve customers in these areas. Most restaurants and bars were barely surviving before the shutdown, and if they are forced to operate solely at 50 percent capacity once they reopen, it will be a death knell for the industry.”

    On Monday, several restaurateurs spoke face-to-face with President Donald Trump and his administration about what the government can do to help the industry. Many suggested extending the PPP forgivability period from eight weeks to 24 weeks. White House officials said they were looking into the matter. They also requested the removal of the 75/25 mandate that requires companies to use 75 percent of funds on payroll and 25 percent on rent/utilities.

    In response, Trump suggested a tax credit that would encourage travel, including to restaurants, and also the restoration of tax write-offs for business meal expenses.

    Operators have continually proposed separate funding that goes directly to the restaurant industry. The National Restaurant Association has requested a $240 billion recovery fund while the Independent Restaurant Coalition wants a $120 stabilization fund, specifically for the independent sector.

    The CARES Act boosted weekly unemployment payments by $600 on top of state benefits. The enhancements end in July, but there is expectation that it will be extended.