Evidence of the U.S. economic recovery’s unpredictability in the wake of the coronavirus pandemic is on display in California.
More than half, or 57 percent of the initial unemployment claims filed in California for the week ending July 25 were from workers who reopened previous claims.
The report by the University of California, Los Angeles and the California Employment Development Department found there are an average of 160,000 of these former claimants weekly.
Till von Wachter, a co-author of the analysis and a UCLA economics professor, said researchers were surprised to discover that most of the July unemployment claims were from workers who had collected benefits previously this year.
“These individuals likely found or returned to work temporarily after their original unemployment claim, but then re-filed their claims as their hours or positions were cut again in response to communities re-instituting restrictions to combat a recent surge in COVID-19 cases,” he wrote in the report. “It’s become apparent that for the individuals who have been lucky enough to return to work, they’re seeing that this new employment is especially unstable. Our data provides evidence that the uncertainty surrounding the pandemic is leading to more people cycling in and out of the UI system.”
Researchers said the jobless filing additional claims are more likely to be female, young and Hispanic or Asian.
Nearly 70 percent of claims for the week ending July 25 were by retail workers.
As of mid-July, 3.3 million claimants, or about 17 percent of California’s labor force, were being paid unemployment insurance benefits.
Nearly half of furloughed workers in the U.S. don’t believe their jobs are coming back, according to a survey by the Associated Press NORC Center for Public Affairs Research.
The number has been worsening since the surveys started. In April, only 2 out of every 10 households said they were discouraged that their jobs wouldn’t return, with the rest thinking there was a chance the economy would rebound.
But that was before the surges in coronavirus cases this summer, which stalled numerous states’ reopening plans and resulted in more job losses.
On Wednesday (Aug. 5), Sen. Marco Rubio (R-Florida), chair of the Senate Small Business Committee, told CNBC that small businesses across the country could face a looming meltdown with massive layoffs if Congress fails to include more money for the Paycheck Protection Program (PPP) in the latest coronavirus relief bill.
“You are going to begin to see, at some point, small business layoffs again as companies run out of the PPP money,” he told the network.