Unemployment claims have surpassed 30 million in the past six weeks as an additional 3.8 million Americans filed in the week ending April 25, according to the U.S. Department of Labor.
CNN reported that when the Department of Labor releases monthly figures next week, the unemployment rate is expected to be around 14 percent, which would be the highest since the data was first recorded in 1948.
For perspective, unemployment during the Great Depression reached nearly 25 percent in 1933. The more than 30 million unemployed filings represent almost 20 percent of the U.S. labor force. During the Great Recession, it took two years for 8.6 million to lose their jobs and for the unemployment rate to rise into double digits. The 22 million jobs gained since the Great Recession have been erased in a month and a half.
The amount of weekly filings have decreased in recent weeks, albeit still in the millions. The amount of claims peaked in the last week of March when 6.9 million filed for unemployment.
States with the highest rates in the week ending April 11 were Michigan (21.8 percent), Vermont (21.2 percent), Connecticut (18.5 percent), Pennsylvania (18.5 percent), Nevada (16.8 percent), Rhode Island (16.7 percent), Washington (16 percent), Alaska (15.6 percent), New York (14.4 percent), and West Virginia (14.4 percent).
On April 21, the National Restaurant Association estimated that more than eight million in the food and drink industry have lost their jobs, a number that is likely to increase with new claims coming in each week. The Association expects the industry to lose approximately $80 billion in April and $240 billion by the end of 2020.
In response to the economic peril, approximately a dozen states have announced official dates for the reopening of restaurants. Dining rooms in Georgia, Alaska, and Tennessee are already open while states like Texas, Utah, and Oklahoma will follow on Friday.
The CARES Act includes a boost of $600 for unemployed workers on top of benefits from their respective states. Restaurants have expressed concern over employees choosing to stay on unemployment rather than returning to work, but some states may cut off benefits for workers who are asked to return, although the legality is uncertain given the unprecedented climate.
“As states start trying to open up, especially in the very short term, we’re going to get into a gray area with unemployment insurance,” said Evercore ISI economist Ernie Tedeschi in an interview with CNBC.
Earlier this week, applications resumed for the Paycheck Protection Program, which was replenished with $310 billion. The program is intended to assist small businesses, including restaurants, with rehiring workers. However, operators have heavily criticized the program’s guidelines. Owners say that since their stores are closed, rehired employees will most likely be laid off again after eight weeks.
Major organizations within the industry have continued to ask the federal government for direct relief. The Association asked for a $240 billion recovery fund while the Independent Restaurant Coalition asked for a $120 billion stabilization fund that excludes publicly traded companies and large chains.
