by Timothy McQuiston, Vermont Business Magazine As Governor Scott continues to open up the economy, the weekly unemployment insurance claims have continued to subside. Initial and ongoing claims have now decreased every week since the peak in early April.
The weekly claims report indicates that for the week ending May 23, 2020, the Department processed 1,552 Initial Claims, down 647 from the previous week but 1,122 more than the same time last year. Total new and continuing claims are 51,837, a decrease of 5,465 from the previous week and 48,204 more than the same time last year.
Since March 1, over 90,000 claims have been filed. The official Vermont March unemployment rate was only 3.1 percent, but the April rate is 15.6 percent. The US April rate is 14.7 percent.
Vermont Labor Commissioner Michael Harrington said he expects the Vermont rate to continue to rise because the unemployment survey was done in the middle of the month. The rate does not include the Pandemic Unemployment Assistance filers.
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.
State officials said while UI payments might be late, all money owed will be paid eventually back to the actual start date. Harrington said that some PUA recipients were initially overpaid but that all those claims should be rectified by May 23.
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 $423.6 million in its trust fund and spent $15.2 million on claims last week. 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 would not fall into deficit under these trends, but the governor has acknowledged that they simply cannot predict it given how economic conditions could swing if there is a second surge of COVID-19.
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 (15.6 percent in April up from 3.1 percent in March) 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 already this week and expects to announce more on Friday. He also extended his Emergency Order to June 15.
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 to Vermonters.
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 23, initial claims for state unemployment benefits were 2.1 million. Economists were expecting 2.05 million. Last week they were 2.7 million, before that it was 2.98 million, from 3.18 million the week before, and 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 40.8 million Americans have filed for claims since the beginning of the coronavirus outbreak.
UI claims by industry last week in Vermont were not calculated.
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.
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.
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.