NJ unemployment hits record 15 percent

Listen to this article

New Jersey’s unemployment rate hit 15.3 percent – shattering the previous record held at the height of the nationwide energy crisis in the 1970s – as the COVID-19 pandemic keeps the economy in near-suspended animation.

More than 1.1 million New Jerseyans are collecting jobless benefits from when the pandemic first slammed the state in mid-March. The state labor department has since paid out $3.4 billion in claims.

The state has seen steep drops among its major employers – leisure and hospitality; trade, transportation and utilities; education and health services; professional and business services; construction; manufacturing; financial services; and information technology – according to the state labor department.

New Jersey’s unemployment rate in March 2019 was 3.4 percent, the lowest since the U.S. Bureau of Labor Statistics began keeping state-level records in 1976.

The state’s highest unemployment rate came amid the 1970s energy crisis, when it stayed at 10.7 percent from November 1976 to January 1977.

Unemployment again rose to 6 percent between May and July 2003, when the dot-com bubble burst in the early 2000s. Then at the height of the Great Recession, the state’s unemployment rate stayed at 9.8 percent between November 2009 and January 2010.

To halt the spread of COVID-19, Gov. Phil Murphy placed the state in a near-total lockdown, which meant the closure of the restaurant and hospitality industry; gyms, malls and casinos; theaters; most retail; entertainment and sporting events;and personal care businesses. While that practice has shown many signs of working, now lawmakers and business groups have expressed frustration that the governor is moving too slowly to ease the lockdown.

Murphy has only just this month begun rolling back restrictions that were put in place in the state through March on businesses and mass gatherings in a bid to slow down the spread of the virus.

But if that does affect the state’s unemployment rate in May, for better or for worse, that data would not be available until mid-June.

April was the first full month that the restrictions were in effect.

According to Thursday data from the U.S. Department of Labor, another 41,323 New Jeraysans filed for unemployment benefits during the week ending May 16, with 2.4 million Americans nationwide doing the same. That brings the number of jobless Americans to nearly 39 million, and 1.1 million in New Jersey since mid-March. The week before, 69,689 New Jerseyans filed for jobless claims.

Of the $3.4 billion of jobless benefits that have been paid out to 1.1 million New Jersayans since March 16, $1.4 billion was from the state’s own unemployment fund and $1.9 billion from the federal expansion under the Coronavirus Aid, Relief and Economic Security Act, or CARES Act.

“I am proud of this progress” Labor Commissioner Robert Asaro-Angelo said May 14 at the governor’s daily COVID-19 press briefing in Trenton.

“[W]hile we wish we could wave a wand, hire unlimited staff who’ve already had years of UI experience and have everyone paid today, the process is not that simple,” he added. “We must protect claimants’ personal information, prevent fraud, and more importantly, obey the U.S. Department of Labor rules, all while paying benefits in the timeliest manner possible.

Under the federal expansion of the unemployment system, claimants are entitled an additional $600 per week through the end of July in jobless benefits and an additional 13 weeks of benefits.

Still, dozens of readers have contacted NJBIZ with woes of unemployment claims that have languished since their filing as far back as March.

The agency has been plagued by understaffing, an endless stream of technical glitches, and dependence on a decades-old, increasingly out-of-date computer programming language known as COBOL.

Only this week did the state labor department announce that it began notifying residents who burnt through their jobless benefits leading up to the COVID-19 pandemic that they will soon hear whether they’re eligible for a 13-week federal extension.

Workers who’ve already gone through their 24 weeks of benefits, or are close to that point, have been waiting for guidance on whether new benefits are forthcoming.

Freelancers and gig workers who’ve waited weeks for unemployment benefits under a federal expansion program known as the Pandemic Unemployment Assistance Program finally saw their checks come through on May 5. As of May 21, the state paid out $134.3 million in PUA benefits.