More than 2.4 million Americans filed initial jobless claims last week, including nearly 46,000 North Carolina workers, according to the U.S. Department of Labor’s weekly report.
The numbers show a job market that, after taking an unprecedented bruising—at least 38 million workers have sought benefits in the last two months, sending the unemployment rate soaring to Great Depression-like levels—may be nearing an eventual bottom. While 10 times more Americans (and 18 times more North Carolinians) filed for unemployment last week than did this time last year, the rate of new job losses is declining: the week that ended on May 9, for instance, saw 2.6 million initial claims across the U.S.; the week before that, 3.2 million.
The same trend is true in North Carolina. In the week that ended on May 9, it saw 57,354 new claims, almost 29,000 fewer than the week before. This week’s total declined another 11,000.
But these numbers do not tell the entire story.
They do not include 1099 workers who filed claims under Pandemic Unemployment Assistance, a feature of the CARES Act Congress passed in late March. Including them adds another 2.2 million to last week’s unemployment rolls—and another 42,000 in North Carolina.
State unemployment programs only apply to W2 workers—employees of companies that pay into states’ unemployment funds, which states then use to pay benefits. This system, however, leaves out the so-called gig economy that emerged in the wake of the Great Recession. At least 10 percent of workers rely on 1099 jobs as their primary source of income—artists to petsitters, freelance journalists to Uber drivers, to name a few.
They, too, have been hit hard by the Great Lockdown. With events canceled, musicians could no longer make money at concerts. With everyone at home, few people needed ride-shares or dog walkers. With struggling newspapers and magazines gutting their freelance budgets, independent journalists had little recourse.
PUA gave them access to their state’s unemployment system for 39 weeks (or until the end of the year), provided they can prove that the COVID-19 crisis cost them their livelihoods. It also extends benefits to other classes of workers normally excluded from state systems: clergy and employees of religious organizations, people who have already exhausted their unemployment benefits or lack sufficient work history to get them, people seeking part-time work, and those who cannot work because they have to care for children whose schools are closed.
Along with state programs and Pandemic Emergency Unemployment Compensation, or PEUC, the $600-a-week the CARES Act added to state unemployment checks, states and the federal government paid out more than $48 billion in unemployment benefits in April. But American workers lost at least $80 billion in income that month.
One of the problems was that while most states had begun processing PEUC payments by April 11, according to the Hamilton Project, they were much slower to accommodate 1099 workers. By April 25, only 12 states had begun processing PUA claims, due in part to muddled instructions from the Trump administration.
North Carolina began accepting claims on April 24. By the next day, the state had received nearly 135,000 PUA claims, according to the U.S. Department of Labor. In the week that ended on May 9, the USDOL reports, more than 52,000 North Carolina workers sought initial PUA benefits. Through May 20, the state Division of Employment Security reports that it has paid nearly $400 million in PUA benefits.
PUA grants recipients the same benefits as W2 employees. In North Carolina, that means a maximum weekly benefit of $350 a week, with an average benefit of $265 a week—among the lowest in the country. They are also eligible for PEUC benefits; however, those are scheduled to expire at the end of July.
Contact editor in chief Jeffrey C. Billman at jbillman@indyweek.com.
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