Another 1.5 million filed for unemployment during the week ending June 13, meaning more than 45 million have turned to unemployment benefits since the beginning of the COVID-19 pandemic.
The weekly number of filings decreased for the 11th straight week, although this time the drop was only by 58,000. At least one million people have filed initial claims for 13 consecutive weeks. The peak came in the last week of March when 6.9 million filed initial claims.
The largest increases in initial claims for the week ending June 6 were in California (27,202), Massachusetts (17,512), Oklahoma (17,149), New York (11,873), and Maryland (9,718).
The Bureau of Labor Statistics reported in April an unemployment rate of 14.7 percent and a reduction of more than 20 million jobs. Since then, the U.S. economy has shown signs of recovery, adding 2.5 million jobs in May, including 1.4 million in the food and drink industry.
The entire country has allowed restaurants to offer on-premises at limited capacities, and sales improvements have followed. According to the NPD Group, U.S. major restaurant chain transactions were down 14 percent in the week ending June 7, which was a 29-percentage point gain from the 43 percent plummet during the week ending April 12.
As restaurants recall furloughed workers, many operators have said they’re competing with enhanced unemployment benefits from the federal government. The CARES Act granted unemployed workers an extra $600 per week, which has allowed some to make more money on unemployment as opposed to their job.
“It’s one of those weird things where they put the CARES Act through to encourage employment, but they also simultaneously started a fund that competes with your ability to reemploy,” said Mighty Quinn’s CEO Micha Magid, who had to lay off workers at several stores.
The deadline for enhanced benefits is set to end in July. In May, the House of Representatives passed a $3 trillion bill that would extend the deadline to the end of January. The Congressional Budget Office reported that if the deadline were extended six months, five out of six workers would make more money on unemployment insurance. However, the bill has not been taken up by the Senate.
The Trump administration wants to end enhanced benefits in favor of an incentive for employees to return to work, although it is unclear what that incentive would look like.
“The president is looking at a reform measure that would still provide some kind of bonus for returning to work, but it will not be as large and it will create an incentive to work,” said Larry Kudlow, White House economic adviser, to CNN earlier this week.
The National Restaurant Association said restaurants lost $40 billion in May, bringing the three-month total to $120 billion after March dropped $30 billion and April sank $50 billion. The Association has previously called for a $240 billion recovery fund, which is equal to the expected amount of losses by the end of 2020.
Democratic Rep. Earl Blumeanuer from Oregon is introducing a bill called the RESTAURANTS Act, which would establish a $120 billion fund for foodservice or drinking establishments that aren’t publicly traded or part of a chain that includes 20 or more locations under the same name. The funds would provide grants to restaurants and bars and prioritize locations with annual revenues less than $1.5 million.