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Recent Unemployment Insurance claims top 30 million

Trump and Republican governors try to force workers back to unsafe jobs
By Masao Suzuki |
May 1, 2020
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Recent Unemployment Insurance claims top 30 million

San José, CA - On Thursday, April 30, the U.S. Department of Labor reported that more than 3.8 million new claims for unemployment insurance or UI were filed in the previous week ending April 25. This means that over the last six weeks more than 30 million claims have been filed. This means that the actual unemployment rate is about 25%, a level similar to the worst of the Great Depression of the 1930s.

The number of people who are getting Unemployment Insurance benefits as of a week earlier, or April 18, reached 18 million, the highest ever. Since 27 million people had applied for benefits as of that time, more than a third of them have not received their benefits yet. One of the worst states in this regard was California, which reported payment rates below 15%, or that 85% of people who applied have not started to get their benefits. One study said that as many as 8 million more jobless workers did not file. They were either stymied by snarled phone lines and crashing web sites in states across the country or discouraged by the harrowing process. One can see the millions of people who are in desperate straits across the country in front of food banks.

The day before, on Wednesday, April 29, the U.S. Department of Commerce reported that U.S. Gross Domestic Product or GDP fell by a 4.8% annual rate. This measure of the total production of goods and services was led by big drops in health care spending - for example on elective surgeries, and spending on travel and entertainment, and restaurants. Most of this drop happened in March, largely before most states issued stay-at-home orders.

Almost all economists agree that the GDP report for the April to June period will be much worse, with an average estimate of a 40% drop at an annual rate. Another sign that the worst is yet to come came in this week’s report on pending home sales in March, which fell more than 20% as compared to February. This means that home sales, and then home construction, is in for a big hit in the coming months.

News was even worse in Europe. The eurozone GDP report showed a 14.4% fall at an annual rate in the first three months of the year, almost three times as bad as the United States. Some of the worst hit countries were Spain and France, whose GDP dropped by about 20%. This was largely because much of Europe was falling into recession in the last three months of 2019 and is the worst since the end of World War II.

What became clear is that much of the support for lifting stay at home was a way to force workers to go back to their jobs even if it was not safe. President Trump ordered meat packing plants, which along with prisons, have some of the largest outbreaks of COVID-19, to open. He claimed authority under the War Production Act or WPA, saying that meat production was of national security interest. Republicans such as right-wing governor of Iowa Kim Reynolds warned that workers who don’t return to work will be cut off of unemployment.

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