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States around the nation are seeing thousands of people losing their jobs due to the novel coronavirus, and Missouri officials say they're looking at lifting some restrictions on the state's unemployment insurance program.
The state reported a slight increase in unemployment insurance claims last week, following a trend of other states. Experts say the worst is yet to come, forecasting this week's reports will show more than 1 million people filing for unemployment benefits around the United States.
The Missouri Department of Labor and Industrial Relations, which includes the Division of Employment Security that oversees the state's unemployment insurance program, reported 3,976 claims during the week that ended March 14. That was about 1,000 more claims than the week prior, but the total of 6,935 claims through the first half of the month is still close to last year's claims, which totaled 12,856 for the entire month of March.
Numbers for this week in Missouri won't be available until next Thursday, but other states are already reporting major spikes in unemployment claims. Nationally, claims increased more than 33 percent last week, and the total of 281,000 claims is already the highest weekly total since 2017, according to the U.S. Department of Labor.
That increase is "clearly attributable" to COVID-19, the disease caused by the novel coronavirus, as a number of states cited layoffs related to the virus and others reported losses in the hospitality and food service industries that have been hit hard by decreased business, and even mandatory closures and restrictions in some places, according to the department.
Claims more than doubled in Washington state last week, rising from 6,616 to 14,846 - a 124 percent increase in the state hit earliest by the disease. Some economists said nationwide claims could jump another 1.5 million this week as the virus and its economic impact become more severe in other states, according to Reuters. A Goldman Sach's research report estimated as much as 2.5 million new claims last week, and said a conservative estimate would still be more than 1 million claims, according to Business Insider.
After Illinois Gov. J.B. Pritzker ordered restaurants to close dine-in service Monday, that state received more than 64,000 unemployment benefit claims as of Wednesday, more than 10 times what it saw over the same three-day period last year, according to the St. Louis Post-Dispatch.
Moody's projects coronavirus puts jobs in transportation and hospitality at severe risk, meaning 20 percent could lose their jobs nationwide. Jobs in retail, manufacturing, construction and education are at moderate risk, meaning almost 10 percent could lose their jobs, according to CNN.
If those projections are accurate, it means some of Missouri's largest industries could be at risk. About 274,419 people work in food service and hospitality in Missouri, accounting for almost 9 percent of the state's workforce. Another 101,795 are estimated to work in transportation, according to the Missouri Economic Research and Information Center.
Together, construction, retail, manufacturing and education, industries Moody's projects are at "moderate" risk, account for about 956,000 employees in Missouri - more than 30 percent of the state's total workforce.
Federal guidance issued last week allows states to expand access to unemployment insurance due to COVID-19, including paying benefits when an employer temporarily shuts down, an employee is quarantined and expects to return to work, or an employee leaves work over a risk of infection or to care for a family member.
Gov. Mike Parson issued an executive order Wednesday allowing state departments to waive rules and regulations that could hinder the state's coronavirus response, leading to calls for expanded unemployment access.
State Rep. Kip Kendrick, D-Columbia, said the department has relaxed one rule so far - the requirement that people collecting unemployment benefits make at least three job contacts a week. There is now a "COVID-19" box on the claim form that people who have lost their jobs due to the virus should check.
Right now, the claim form will still say three contacts a week are required, but Kendrick said that's just an issue of re-programming the website. That requirement has been lifted for those who lost their jobs due to COVID-19, he added.
He said he was not sure if that extended to everyone, like those who were recently laid off for other reasons, but he expected to get some clarity from the department soon.
"It'll be important for the state to waive all job search requirements at this point," Kendrick said. "You don't want people going out to do a job search in the middle of a pandemic."
As Missouri's rules currently stand, people are only eligible for unemployment insurance benefits if they lose their job through no fault of their own and meet the state's other criteria, like having made income in at least two quarters over the prior year. To keep receiving benefits, individuals have to be available to work, meaning they are not sick or injured, according to the department.
State Sen. Gina Walsh, D-Bellefontaine Neighbors, sent a letter to Parson to consider suspending the state's one-week waiting period before unemployed people can even file to claim benefits. If they qualify, it takes about another 22 days to actually receive benefits, she said.
"For people who live week-to-week, that's a lot," Walsh said.
In general, a minority of people who are unemployed actually receive unemployment insurance benefits from the government, according to the St. Louis Federal Reserve. Christian Zimmermann, assistant vice president of research at the St. Louis Federal Reserve, said eligibility requirements and the length of the state's waiting periods and benefit periods are crucial to how many people receive benefits.
At a time of high layoffs, like we're seeing now, a higher proportion of the unemployed will be receiving benefits, he said. People already receiving benefits won't be at the end of their eligibility, and people will come onto the rolls even quicker if states reduce the waiting period, he said.
There are a lot of folks whose businesses have already been impacted, including restaurants that closed before St. Patrick's Day, Walsh said. With most school districts currently closed throughout the state, more people are going to have to stay home to watch children, and they're going to need help, too.
Missourians can receive a maximum of $320 a week for up to 20 weeks, but the average claim is $264.70, according to the department. All but 10 states offer 26 weeks or longer, according to the Center on Budget and Policy Priorities.
Even the maximum payment only covers groceries and maybe some utilities for most families, Walsh said. It's a good thing the Missouri Supreme Court struck down Missouri's 13-week limit (among the lowest in the United States) in 2016, Walsh said. It would make sense to raise that limit above 20 weeks until there's a clearer picture of how long this will last, she said.
The labor department and Division of Employment Security, which manages the unemployment program, are looking at their programs, including unemployment insurance, "to make sure that benefits offered to Missouri citizens are available to those who need them most, and are fiscally responsible," according to a joint statement from the department and Parson's office.
The U.S. Department of Labor calculates the trust fund Missouri pays unemployment claims out of may not be able to cover all the claims it could have during a recession, though it's in a much better position than states like Illinois, New York and California.
The amount of funds each state has to pay those claims can be a concern, but the federal government can provide resources to fill that gap, and its action will be crucial, Zimmermann said in an email.
A bill that passed the U.S. Senate this week could increase funding to state labor departments where the unemployment rate rises at least 10 percent in order to extend unemployment benefits, according to Reuters.
Asked if there were long-term consequences to borrowing federal money to pay unemployment claims, Zimmermann said, "In the current situation, I do not think one should worry about deficits."
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