A CLOSER LOOK: 16M people are on unemployment due to COVID-19

A Closer Look

Nearly 100,000 unemployment claims in 3 weeks in Arkansas

ARKANSAS (KNWA/KFTA) — The Department of Labor’s unemployment report was not good news for the week ending April, 4.

There are more than 16 million people in the country who are not working, according to the Department of Labor mainly due to COVID-19.

THE NATURAL STATE

In Arkansas, more than 60,000 people applied for unemployment in one week — March 28 to April 4.

The week ending March 28, 27,000 new claims were filed.

The week ending March 21, more than 9,200 claims were filed.

NEARLY 100,000 ARKANSANS ARE GETTING UNEMPLOYMENT

Unemployment benefits are for people who have been laid off. People who were fired or resigned from a job usually are not eligible. University of Arkansas’ Walton College of Business Director, Center for Business and Economic Research, Mervin Jebaraj expects the number of claims will increase next week, too.

“The high increase of claims is because of the increased capacity to process claims,” said Jebaraj. “Most states couldn’t handle the volume of claims.”

Today’s unemployment rate can’t compare to 2009 when it was 10%, what many called the ‘Great Recession.’ “That’s because today people are temporarily out of work because of closures.”

On the unemployment claim form you’re asked if you’ve worked in the last four weeks. The second part of the question, “did you look for work?” has been waived. “While they are unemployed, they don’t meet the definition of the Bureau of Labor Statistics,” said Jebaraj.

States can’t make ends meet alone, federal assistance is needed. “As long as the federal government will help pay for the impact [such as] … budgetary support, stimulus checks.” Jebaraj said the distinction between Arkansas and other states is that it is not completely shut down. As of April 3, 46 states and Washington, D.C. have enacted nonessential business closures policies, Arkansas has not.

SOCIAL SECURITY ACT OF 1935 APPROVED

The Great Depression, 1929, was the reason unemployment benefits were created. By 1933 unemployment was at 25% nationally.

The Social Security Act of 1935 allowed for people to get money to help pay for food and shelter. A standard of 26 weeks was set to collect money; today, that varies in some states.

There are two programs in the U.S. regarding unemployment benefits:

  • Unemployment (UI): This is for workers who have lost their job. They can collect money up to 26 weeks (some states have it up to 99 weeks).
  • Emergency Unemployment Compensation (EUC)/Extended Benefits (EB): This program is paid through federal funds and is for people who have used all of the regular state benefits.

UNEMPLOYMENT BENEFITS EXTENSIONS

Since inception of the program (Social Security Act) there have been several extensions to benefits.

2009: Unemployment benefits were extended as part of President Obama’s American Recovery and Reinvestment Act (approved in February). In November, unemployment was at 10% and benefits were extended again through the Unemployment Compensation Extension Act of 2009.

2010: The Temporary Extension Act of 2010 extended the benefits date for the Emergency Unemployment Compensation Act because unemployment rates stayed stagnant at 9.5%. The EUC benefits were given in four tiers. 1st: 20 weeks of benefits. 2nd: additional 14 weeks. 3rd: for states with 6% or higher unemployment, they received another 13 weeks. 4th: for states with 8.5% or higher unemployment, an additional six weeks was given.

2013: The American Taxpayer Relief Act of 2012 (ATRA) extended unemployment benefits to January 1, 2014. President Obama signed this in to law on January 2, 2013.

2020: the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted on March 27, 2020. The CARES Act included an extra four months of benefits. In addition, states also added 13 weeks. The benefits are also extended to self-employed and independent contractors.

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