WASHINGTON - A record 3.3 million U.S workers filed for unemployment compensation last week as thousands of businesses shut their doors or curtailed operations in the face of the deadly coronavirus and laid off their employees, the U.S. Labor Department reported Thursday.
The wave of claims by the newly unemployed has overwhelmed some state agencies that handle the paperwork, with the jobless workers forced to wait hours in line at offices or online if they were filing electronically. Jobless claim websites in some states, including New York and Oregon, crashed.
The vast number of claims easily surpassed the previous one-week record in the U.S. — 695,000 in 1982 as the U.S. battled high inflation at the time.
Economists say the huge number of new unemployment insurance claims is just one indication of the economic damage wrought by the coronavirus. Some suggest the U.S. might already be in a recession, even if the technical definition of a recession, two straight quarters of declining growth, is not met.
Last week’s jobless benefit claims could be an indicator of millions more to come as many businesses are reassessing their plans by the day. They are faced with the question of whether to continue to pay employees when they have little or no work to do as would-be customers stay home in self-isolation to avoid public contact with others who might have contracted the virus.
Normally, laid-off workers claiming unemployment compensation are paid a fraction of their regular salaries, a sort of stop-gap personal funding.
But the massive $2 trillion coronavirus rescue package that was approved by the U.S. Senate late Wednesday includes $250 billion for bigger jobless payments that will benefit the newly unemployed at a time when the U.S. economy, the world’s largest, is facing unparalleled challenges.
The legislation, when likely approved Friday by the House of Representatives and signed into law by President Donald Trump, extends jobless insurance from 26 to 39 weeks and increases the payouts to the jobless by $600 a week for four months above what states would normally pay the unemployed.
In addition, for the first time, freelancers and gig workers, such as Uber drivers, will be eligible.