Drop in unemployment could lead to problems in Wisconsin when winter comes, and claims rise again

In recent months, unemployment claims in America have shown a consistent trend. The number of new and ongoing claims continues to decline, but they still are at higher levels than we saw during the Great Recession of the late 2000s. And there are troubling headwinds ahead on both the jobs market, and in bringing the demand necessary to prevent further layoffs.

First off, the number of new claims continued to go down in the week of the 2020 Election.

The number of people applying for unemployment benefits fell last week to 709,000, a sign that the labor market is continuing its slow recovery from the pandemic even as coronavirus cases surge.

The figure, released Thursday by the Department of Labor, is a decrease of 49,000 from the previous week and marks the lowest level since the start of the pandemic in March.

Buuuuut......

Filings, however, remain historically high. The pre-pandemic record for weekly unemployment claims sat just shy of 700,000.

Another 298,000 people applied for jobless benefits through the Pandemic Unemployment Assistance program, which was set up by Congress to help workers who would not otherwise qualify for regular state benefits.

Seems like a worthy context to keep in mind.

If you dig into the actual report from the Department of Labor, the story was the same on the continuing claims side. Lower than before, but still really high.

The advance seasonally adjusted insured unemployment rate was 4.6 percent for the week ending October 31, a decrease of 0.3 percentage point from the previous week's revised rate. The previous week's rate was revised down by 0.1 from 5.0 to 4.9 percent. The advance number for seasonally adjusted insured unemployment during the week ending October 31 was 6,786,000, a decrease of 436,000 from the previous week's revised level. The previous week's level was revised down by 63,000 from 7,285,000 to 7,222,000. The 4-week moving average was 7,575,750, a decrease of 653,000 from the previous week's revised average. The previous week's average was revised down by 15,750 from 8,244,500 to 8,228,750.

And that's just the regular unemployment insurance, which doesn't count PUA, or the increasing number of people who have already gone through their regular 26 weeks of unemployment and are now on extended claims.

In Wisconsin, the trend is similar, as October ended with continuing claims falling below 100,000 for the first time since the COVID shutdowns hit full force 7 months prior to that. But Wisconsin Public Radio reported that decline is now going to cause some Sconnies to be cut off from further benefits, despite the fact that 5 times the number of people are on unemployment in Wisconsin vs this time last year.

The U.S. Department of Labor has notified the Wisconsin Department of Workforce Development (DWD) that an unemployment insurance extension program known as Extended Benefits has been "turned off" in Wisconsin, according to a recent press release from DWD. The federal program grants an additional 13 weeks of unemployment insurance to eligible individuals who have exhausted benefits under both regular unemployment insurance and Pandemic Emergency Unemployment Compensation (PEUC).... he program was triggered to "turn on" in May after dramatic rises in the state's unemployment rate. In April, Wisconsin's unemployment rate skyrocketed to 13.6 percent, the highest ever recorded. The unemployment rate in May dropped to 12.1 percent, the second-highest ever recorded in the state. But as of early October, the share of people on unemployment in Wisconsin relative to the number of people covered by the unemployment insurance system fell to [a multi-week average of] 4.87 percent, just under the 5 percent minimum needed to continue the program.

That rate had slipped to 3.44% as of the end of October, so it seems likely that those Extended Benefits aren't going to be available for a while here.

Not many Wisconsin had been on the 39+ week Extended Benefits program (37 in the week of Oct 24, the last week measured). But more than 57,000 were on the PEUC program for people that have been getting benefits for more than 26 weeks. And this is an ominous time of year for the EB program to end, as 9 months after COVID shutdowns began takes us to mid-December. So Merry Christmas to those folks!

Wisconsin already has seen an increase in new claims in October as the weather turned colder. Now add in what is likely to be a brutal COVID winter for bars, restaurants, and retail with fewer people willing to dine, drink, and shop inside due to the pandemic, and the number of layoffs are likely to go up yet again.

Also, the week after Thanksgiving is usually one of the highest claim weeks in the state (deer hunting and related Holiday stuff, ya knoow), so there's another concern that's going to crop up in the near future. And oh yeah, the $300-a-week boost in unemployment benefits that Wisconsinites are getting as a result of Trump's desperate raid on FEMA funds is having its 6 weeks run out at the end of this month.

So in the next month, we will be seeing:

1. A rise in the number of Wisconsinites filing for unemployment.
2. Tens of thousands of Wisconsinites possibly being cut off from benefits as their 39 weeks runs out.
3. Those that are on unemployment will lose their extra $300 a week.
4. Little to no seasonal hiring for retail stores, since people aren't going to crowd inside during a pandemic.

This makes it critical for policymakers at the state and federal levels to take action to help people get through this unhealthy and economically stressful time. The end of CARES funding on December 31 makes things especially concerning at the state level, since there isn't going to be many resources available to make up the difference. If nothing is done (looking at you, Republicans) this combination of factors will likely push pandemic-ravaged Wisconsin into a second recession to end 2020.

PS- Speaking of Republican interests, guess who also wants action to help businesses and workers get by in these tougher times? The same jackwagons who sued to end Wisconsin's restrictions that were intended Stop the Spread of COVID, and has many of its members operate in a manner that has likely played a major role in having COVID get out of control in many Wisconsin communities

Restaurants Act which had previously passed the House.

My members are beyond frustrated at the lack of response from our federal government. While the airline industry and big business were quick to obtain federal assistance the small independent business owner has been

— Tavern League of Wisconsin (@tavernleaguewi) November 11, 2020

not weather the economic calamity the pandemic has caused. TLW

Please, for the sake of small Mom and Pop businesses in Wisconsin do something. Without immediate assistance we cannot survive any longer. We remain committed to keeping our community safe but after 8 months we no

— Tavern League of Wisconsin (@tavernleaguewi) November 11, 2020

I can hear your "F*** YOUUUUU!"s from my living room.