Unemployment surges as COVID-19 forces businesses to close statewide

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Unemployment applications jumped nearly 21 percent last week as the coronavirus outbreak forces the mass closure of businesses nationwide in a bid to halt its spread, according to recent data from the state and federal labor departments.

Between March 8 and March 14, there were 281,000 nationwide unemployment claims, an increase of 70,000 from the previous week’s 211,000 claims, according to the U.S. Department of Labor. That same week, 9,467 New Jerseyans filed for unemployment—20.6 percent higher than the 7,853 claims filed the same week in 2019.

In 2020, the first week of March saw 7,996 claims, according to the New Jersey Department of Labor and Workforce Development.

“[T]he increase in initial claims are clearly attributable to impacts from the COVID-19 virus,” reads the March 19 analyses from the federal labor department.

“A number of states specifically cited COVID-19 related layoffs, while many states reported increased layoffs in service related industries broadly and in the accommodation and food services industries specifically, as well as in the transportation and warehousing industry,” the report continues.

This past Monday, a record 15,000 applicants for unemployment briefly crashed New Jersey’s system, according to state Labor Secretary Robert Asaro-Angelo.

The state’s unemployment rate was 3.8 percent as of January, but data is not yet available for February.

A spokesperson for the state labor department declined to elaborate on how long the agency will take to process the thousands of additional applications.

“Application processing time depends on several factors: whether it was filed online (online is fastest), our volume, whether the applicant provided all the required information, and whether the applicant filed for the right program (from among unemployment, family leave, temporary disability and workers’ comp),” Angela Delli-Santi, a spokesperson for the state labor department, told NJBIZ.

Gov. Phil Murphy rolled out orders this week to close tens of thousands of businesses in order to promote the kind of “social distancing” that proponents argue can starve the coronavirus of any opportunities to infect new hosts.

As of Thursday afternoon, the coronavirus infected 742 New Jersey residents and claimed nine lives. On Monday, he ordered the closure bars, restaurants and casinos, and on Tuesday the closure of all malls in the state. On Thursday, he ordered the closure of close barber shops, salons and tattoo parlors.

This could likely blow glaring holes in the state budget, and lawmakers are rushing bills to help offer state aid to businesses and people out of work.

One measure sent to Murphy creates a $20 million unemployment insurance program that would compensate workers for wages lost while in quarantine as a result of the outbreak—and for businesses that had to cover pay for any such worker.

And a proposal from Senate President Stephen Sweeney, D-3rd District, calls for extending state unemployment benefits beyond the 26 weeks – or six months – already outlined under the program.