Over the week, the number of Americans applying for unemployment benefits doubled, significantly exceeding economists’ forecasts. From March 21 to 28, 6.65 million more people applied for state aid in order to compensate for the loss of income or salary in the country than the previous week, according to the French Le Figaro.
Over the past two weeks, the number of registered unemployed in the United States has reached 10 million. This is an unprecedented surge – during the crisis of 2008, the largest number of registered unemployed per week was 665 thousand, and a total of 8.7 million people lost jobs.
According to the French newspaper, a sharp surge in unemployment is due to at least three factors. The first, of course, is the isolation of 80% of Americans. As the publication recalls, in mid-March, only 50% of the country’s inhabitants were quarantined. Overnight, thousands of enterprises lost not only customers, but also the ability to produce goods or provide services. The largest simply fired staff temporarily in the hope of re-hiring them after a few weeks. The most vulnerable have closed, not knowing when the workers will be able to return.
The second factor was the simplification of the registration process as unemployed, thanks to digital technology. In 2008, it was physically impossible to process such a volume of applications for this period.
The third factor was a significant increase in unemployment benefits, thanks to a $ 2 trillion plan to save the US economy last week. From now on, independent workers can apply for it. In addition, the federal authorities added $ 600 to the state allowance. For example, in New York State, until recently, the amount of the allowance was $ 500, and now it is equal to $ 1,100. This gives some critics a reason to assert that for the poor citizens the new system can turn around even temporary income growth.
Today, the US Department of Labor is due to publish its estimate of the country’s unemployment rate and the number of jobs lost in March. However, since the statistics for this report were obtained in mid-March, the deterioration in the labor market is likely to be underestimated, writes Le Figaro.