by Timothy McQuiston, Vermont Business Magazine Layoffs, furloughs and business closures due to the COVID-19 economic downturn and Governor Scott's emergency order and the subsequent "Stay Home, Stay Safe" guidance have resulted in a rush of unemployment insurance claims. But as Scott has allowed more sectors to get back to work, ongoing claims have now decreased five consecutive weeks.
The weekly claims report indicates that for the week ending May 9, 2020, the Department processed 2,9135 Initial Claims, down 962 from the previous week but 2,479 more than the same time last year. Total new and continuing claims are 59,953, a decrease of 4,457 from the previous week and 56,230 more than the same time last year. Initial claims peaked five weeks ago.
The Vermont high-water claims three weeks ago of over 80,000 claims would have put the state unemployment rate at 23.8 percent, but at current levels the rate would unofficially be at 17.5 percent. The official March rate was only 3.2 percent. The US already has released its April rate of 14.7 percent.
The Vermont April rate will be released May 22. Given the estimated data, this will put the Vermont April rate at about 20 percent, but it will fall dramatically in May and likely be lower than the US rate when the May unemployment rate is reported in late June. The total unemployed in the US continues to rise, while it is falling in Vermont.
The recently-launched Pandemic Unemployment Assistance (PUA) has added to the ranks of those receiving benefits. The PUA serves the self-employed who previously did not qualify to receive UI benefits. The unemployment situation could look quite differently than it does today, however, depending on how the PUA claimants are factored into, or not, the Labor Force. The Labor Force is the denominator in calculating the rate.
State officials said while UI payments might be late, all money owed will be paid eventually back to the actual start date.
This surge during the Great Recession for the entire year in 2009 spiked at 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 $455.3 million in its trust fund and spent $19.3 million on claims last week, which was a decrease of $2.8 million from the week before. Payments lag claims typically by a week.
Vermont currently has more than double the Trust Fund it did when the economy started to slide in 2007.
The UI Trust Fund is not expected to fall into deficit under these conditions.
The US unemployment rate for April jumped to 14.7 percent in April, the highest rate since its was first calculated in 1948 and the highest unofficially since the Great Depression of about 25 percent. The US and Vermont (3.2 percent) unemployment rates are expected to surge further.
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 list on Friday May 15. He also will extend his Emergency Order beyond May 15.
Construction firms were allowed to fully open on May 11 with social distancing guidance. Limted retail can open on Monday, May 18.
Recreational gatherings and outdoor activities (but not organized sports) are also allowed now, if 10 or fewer and with social distancing.
Farmers markets are open 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. That federal benefit is set to expire July 31.
Nationwide, according to the US Labor Department for the week ending May 9, initial claims for state unemployment benefits were 2.98 million. Economists were expecting 2.7 million. Last week they were 3.18 up from 3.85 million and 4.4 million the previous weeks. (The weeks previous to that were 5.2 million and 6.6 million. The weeks before that there were 3.3 million and before that 282,000 claims.) About 36.5 million Americans have filed for claims since the beginning of the coronavirus outbreak.
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.
