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Mass. jobs data underscore need for more federal relief funds

Unemployment in hard-hit sectors will outlast the latest round of government aid

A pedestrian in Downtown Crossing in Boston. The Massachusetts unemployment rate increased to 7.4 percent in December, state officials announced Friday.
A pedestrian in Downtown Crossing in Boston. The Massachusetts unemployment rate increased to 7.4 percent in December, state officials announced Friday.Lane Turner/Globe Staff

At first glance, the latest unemployment data for Massachusetts don’t look too bad. Payrolls lost just 600 jobs in December, the state said Friday, and the increase in the unemployment rate — to 7.4 percent from 6.7 percent in November — was driven in part by people entering the labor force to look for work.

But dig a little deeper and the true toll of the winter surge in coronavirus cases emerges.

The leisure and hospitality industries, which have been battered by COVID-19 restrictions, shed 9,200 jobs in December, the second straight month of losses, and 5,800 government jobs disappeared. Those declines were offset as retailers added workers, which is typical during the holiday season, and construction and business and professional services firms expanded hiring.


In other words, the segments of the state’s economy least affected by the pandemic — including white-collar professionals who can work from home, but also factory and construction workers — continue to do okay while restaurants, hotels, health care providers, and education sector workers struggle.

This so-called K-shaped economic recovery — up for some, down for others — is the reason why more emergency aid from the federal government is needed, even after the $900 billion relief package passed by Congress in December. Without more money, jobless benefits will begin running out for millions of Americans in mid-March, municipalities will cut more jobs to close budget deficits, and evictions will accelerate.

President Biden’s $1.9 trillion rescue plan, which he released last week, lays out more than $620 billion in safety-net spending to help struggling Americans through much of the year, and $350 billion in aid for state and local governments. Measures include an additional $1,400 per person in direct checks, extending jobless benefits at least through September and raising the federal weekly bonus by $100 to $400, and beefing up rental and food assistance.


The rescue package must be approved by Congress, where Biden faces opposition from Senate Republicans who object to the overall cost, as well as to the money for local municipalities.

The national unemployment rate was unchanged at 6.7 percent in December, the Labor Department reported earlier this month, while employers cut 140,000 jobs, the first decline since April. In January, layoffs have remained at elevated levels, nationally and in Massachusetts, based on new claims for jobless benefits.

The state said it resumed sending out unemployment checks during the week of Jan. 11 to gig workers, independent contractors, and others covered by the federal Pandemic Unemployment Assistance program. Payments had been interrupted when former president Donald Trump failed to sign legislation extending the program until after it expired on Dec. 26. Eligible claimants were paid retroactively.

A second federal program, which provides jobless pay when state benefits run out, was extended for up to 11 weeks as part of the December relief legislation. However, the state said it hasn’t started distributing those payments.