by Timothy McQuiston, Vermont Business Magazine Vermont unemployment insurance claims again increased last week as layoffs and business closures resulted in a rush of new claims. Entering the third week of Governor Scott's "Stay Home, Stay Safe" order, the claims were not the exponential increase as witnessed the previous week. Last week alone 16,474 new claims were filed, an increase of 1,841; the previous week claims increased by 10,849.
As a supplement to their regular weekly report, the Vermont Department of Labor on Thursday provided the following information through its Unemployment Insurance Division:
- Number of Initial Claims received between March 29 and April 4: ≈ 22,754
- Number of Initial Claims for same week in 2019 (week ending April 6, 2019): 519
- Total number of Initial Claims received to date since March 15, 2020: ≈ 71,667 (as of 4/7/20)
- At February's Labor Force level, 71,667 claims equates to a 21.1% unemployment rate
Please note that the data above provides an estimate and not an exact number of claims received by the Department during the date ranges shown.
Altogether in the regular weekly report, 38,427 new and continuing claims were filed last week, an increase of 9,997 from the previous week and 33,233 more than a year ago. This is just over the peak of the Great Recession for the entire year in 2009 of 38,081 claims.
The claims then 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 about $1.3 million on claims last week. Payments lag claims typically by a week. The department is trying to catch up with the backlog of new claims. The federal government will add $600 a week to the Vermont benefit.
The US unemployment rate for March jumped to 4.4 percent in March, the highest rate since August 2017. The US and Vermont unemployment rates are expected to keep increasing.
Vermont Labor Commissioner Michael Harrington said last week that the current backlog of claims could push numbers over 50,000.
But with Governor Scott's order to at first close all restaurants and now all non-essential workers have been ordered home, the claims are expected to continue to mirror the spike in federal numbers, which increased by more than 6 million the last two weeks and more than 3 million the previous week.
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 will more than double current UI payments in Vermont as soon as it can be implemented.
Harrington has brought in workers from other departments, including the DMV, to help process the crush of claims.
Initial Vermont claims for the week of March 28, 2020, were 14,633, up 10,849 from last week and up 14,236 from last year. (As of March 14, initial claims were 661 and only 20 more than they were at the same time last year.)
Nationwide, according to the US Labor Department for the week ending April 4, initial claims for state unemployment benefits were 6.6 million versus 6.9 million the previous week (which was revised up by 300,000; the week previous was 3.3 million. The week before that there were 282,000 claims.)
UI claims by industry last week in Vermont were not calculated.
Vermont's unemployment rate for February held at 2.4 percent. Vermont's rate is the second lowest in the nation. 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.
Source: VT Labor Dept 4.8.2020