by Timothy McQuiston, Vermont Business Magazine Layoffs, furloughs and business closures due to the COVID-19 economic downturn and Governor Scott's "Stay Home, Stay Safe" emergency order have resulted in a rush of unemployment insurance claims. The cumulative total of claims is now at a record that exceeds 81,000. At the last reported Labor Market total, this would push the state unemployment rate to 23.8 percent.
The just-launched Pandemic Unemployment Assistance (PUA) has added to the ranks of those receiving benefits. This week 8,500 PUA claims valued at $24 million were paid. The high total dollar amount is due to backdating the payments to the beginning of the crisis. The PUA serves the self-employed who previously were not allowed to receive UI benefits.
The weekly claims report indicates that for the week ending April 25, 2020, the Department processed 5,117 Initial Claims, down 1,481 from the previous week but 4,454 more than the same time last year. Total new and continuing claims are 81,574, an increase of 10,663 from the previous week and 76,480 more than the same time last year.
State officials said while UI payments might be late, all money owed will be paid eventually back to the actual start date.
This surge more than doubles the peak of the Great Recession for the entire year in 2009 of 38,081 claims.
The claims back in 2009 pushed the state's Unemployment Insurance Trust Fund into deficit and required the state to borrow money from the federal government to cover claims.
Right now (see data below), Vermont has nearly $500 million in its trust fund and spent over $48 million on claims last week. Payments lag claims typically by a week.
Vermont now has more than double the Trust Fund it did when the economy started to slide in 2007.
The US unemployment rate for March jumped to 4.4 percent in March, the highest rate since August 2017. The US and Vermont (3.2 percent) unemployment rates are expected to keep increasing.
But with Governor Scott's order to at first close all restaurants March 17 and all non-essential workers have been ordered home. He has slowly started to reopen the economy and is expected to add to that short list on Friday May 1.
Open businesses now include mostly outdoor, low density work like garden centers (up to 10 total people) and construction up to five workers. Farmers markets can reopen starting May 1 under very strict guidelines, which include social distancing, "curbside" style ordering and payment, no entertainment and only food vendors.
The impact on jobs from the coronavirus (COVID-19) in Vermont on weekly unemployment claims is expected to be profound and the federal aid package more than doubles current UI payments in Vermont. The federal government will add $600 a week to the Vermont benefit.
Nationwide, according to the US Labor Department for the week ending April 18, initial claims for state unemployment benefits were 3.84 million. Economists were expecting 3.5 million. Last week they were 4.4 million versus 5.2 million the previous week. (The week previous was 6.6 million. The weeks before that there were 3.3 million and before that 282,000 claims.) About 30.3 million Americans have filed for claims since the beginning of the coronavirus outbreak.
The April US unemployment rate is estimated to be 15.1 percent in preliminary economists' projections.
UI claims by industry last week in Vermont were not calculated.
Vermont's unemployment rate for March was 3.2 percent, up from February which held at 2.4 percent. SEE STORY.
The US unemployment rate for March, released April 3, jumped to 4.4 percent, the highest since August 2017 and well above market expectations of 3.8 percent.
All these numbers of course are expected to take a precipitous turn for the worse over the next few months, especially when the April report is released in May.
Stories:
Tax revenues for February on target, hit expected over next few months
Businesses to see double-digit rate decrease in workers’ comp insurance in 2020
Tax revenues finish year nearly $60 million above targets
UI tax rates for employers fell again on July 1, 2018, as claims continue to be lower than previous projections. Individual employers' reduced taxable wage rates will vary according to their experience rating; however, the rate reduction will lower the highest UI tax rate from 7.7 percent to 6.5 percent. The lowest UI tax rate will see a reduction from 1.1 percent to 0.8 percent.
Also effective July 1, 2018, the maximum weekly unemployment benefit will be indexed upwards to 57% of the average weekly wage. The current maximum weekly benefit amount is $466, which will increase to $498. Both changes are directly tied to the change in the Tax Rate Schedule.
Vermont's minimum wage rose to $10.78 on January 1, 2019.
The Unemployment Weekly Report can be found at: http://www.vtlmi.info/. Previously released Unemployment Weekly Reports and other UI reports can be found at: http://www.vtlmi.info/lmipub.htm#uc
NOTE: Employment (nonfarm payroll) - A count of all persons who worked full- or part-time or received pay from a nonagricultural employer for any part of the pay period which included the 12th of the month. Because this count comes from a survey of employers, persons who work for two different companies would be counted twice. Therefore, nonfarm payroll employment is really a count of the number of jobs, rather than the number of persons employed. Persons may receive pay from a job if they are temporarily absent due to illness, bad weather, vacation, or labor-management dispute. This count is based on where the jobs are located, regardless of where the workers reside, and is therefore sometimes referred to as employment "by place of work." Nonfarm payroll employment data are collected and compiled based on the Current Employment Statistics (CES) survey, conducted by the Vermont Department of Labor. This count was formerly referred to as nonagricultural wage and salary employment.
