Nearly 1.1 million people have filed for unemployment pay in Massachusetts over the past eight weeks, raising the stakes for Governor Charlie Baker as he weighs how to reopen the economy while continuing to contain the spread of COVID-19.
Initial jobless claims in Massachusetts totaled 115,000 for the week ended May 9, including those made under a new federal program that extended benefits for the first time to gig workers, independent contractors, and others, the Executive Office of Labor and Workforce Development said Thursday.
That was down from 124,000 filings in the prior week, but still precipitously higher than the average of 7,000 a week earlier this year before the outbreak.
Layoffs have hit nearly 29 percent of the state’s labor force since mid-March, and Baker is under increasing pressure to detail his plans for lifting his stay-at-home order and restrictions on nonessential businesses. The governor is expected to do so Monday, though it’s not clear how much he will elaborate on the four-stage outline he previewed earlier this week.
Businesses have said they are frustrated by the lack of information needed to plan their next steps.
“While protecting public health is the primary concern, businesses will look for additional information on the reopening phases and triggers, a statewide goal on testing, the plan for using federal child care funds, the public transit approach, and whether additional guidance [on employer liability] is forthcoming,” the Greater Boston Chamber of Commerce said Thursday.
Nationally, nearly 3 million people applied for jobless benefits last week, bringing the total to 39 million since mid-March, the Labor Department reported Thursday.
As in Massachusetts, the national number of first-time applications was down from the prior week. Cumulative layoffs during the pandemic equal 24 percent of the US labor force.
While the pace of job losses has steadily slowed, Federal Reserve chairman Jerome Powell cautioned Wednesday that the direction of the economy "is both highly uncertain and subject to significant downside risks.”
In the Fed’s discussions with businesses, “What comes though is there is a growing sense, I think, that the recovery may come more slowly than we would like,” Powell said in remarks to the Peterson Institute for International Economics.
Economists said the slower the recovery, the longer unemployment will remain at steep levels.
"Absent a significant public works program the mass unemployment that continues to grow is likely to be a reality well beyond a year,” said Thomas Kochan, a professor at MIT’s Sloan School of Management. “Some of the jobs in key industries like retail and small business services will not come back, and many of those that do will require different mixes of skills than the jobs lost because employers will be reorganizing their businesses, using more technology wherever possible, and adjusting to changing consumer patterns.”
States have taken a patchwork approach to reopening. In Maine, hair salons and barbershops were among the first businesses to return, and Rhode Island has allowed some stores to reopen. Ohio has permitted warehouses, most offices, factories, and construction companies to reopen, but restaurants and bars remain closed for indoor sit-down service. Georgia has opened barbershops, bowling alleys, tattoo parlors, and gyms.
The latest jobless claims followed a US jobs report last week that showed unemployment rose to 14.7 percent in April, the highest rate since the Great Depression, and employers shed 20.5 million jobs. The Labor Department said the jobless rate would have been closer to 24 percent if many workers had been correctly counted as temporarily unemployed rather than absent from work, and if the tally included laid-off workers who were not actively looking for a new job in April.
With so much uncertainty surrounding the course of the pandemic, economists said it’s difficult to forecast how any recovery will play out.
“If the first stages of reopening go well and the process continues smoothly, we could easily see a vigorous bounce-back in the economy this summer and fall,” said Peter Ireland, an economics professor at Boston College. “There are obviously going to be sectors that are slow to recover — air travel and hospitality chief among them — meaning that we’re certainly not going to see unemployment back to a 50-year low by Christmas. But overall, we could be doing pretty well.”
Material from the Associated Press was used in this report.