May 25, 2020
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Maine’s weekly unemployment claims quadruple those seen in Great Recession

Troy R. Bennett | BDN
Troy R. Bennett | BDN
A man walks by the open Cotton Patch boutique on Portland's Exchange Street on Tuesday a few hours before City Manager Jon Jennings issued a proclamation shuttering all nonessential businesses in response to the coronavirus pandemic.

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More Mainers are filing for unemployment than any time in the state’s history.

New unemployment insurance claims in Maine and nationally rose sharply last week as businesses throughout the state continued to shutter and consumers stayed home in efforts to halt the coronavirus’ spread, according to Maine Department of Labor data released Thursday.

Unemployed workers in the state submitted 21,459 new claims for the week from March 15 to 21, up from the previous week’s 634. It’s quadruple the state’s previous record of 5,634 new weekly claims set during the Great Recession in 2009.

[Our COVID-19 tracker contains the most recent information on Maine cases by county]

The most affected industry sectors were accommodation and food services (7,965 claims) and health care and social assistance (3,588 claims), followed by manufacturing (1,131 claims) and retail trade (1,103 claims).

Last week, the department said claims filed from March 15 to 17 alone hit 4,900, up 800 percent from the same full week in 2019.

“We, along with the rest of the country, are doing everything we can to respond to this historic number of unemployment claims and the questions that come with them,” Maine Department of Labor Commissioner Laura Fortman said. “We know that the partial wage replacement that unemployment benefits provide is a lifeline for families, as well as an economic stabilizer for our local communities in these uncertain times.”

That sudden spike in claims signaled an expected escalation of jobless claims in the weeks and months to come, economists said.

Nationally, the seasonally adjusted unemployment insurance claims hit a record of 3.28 million for the week from March 15 to 21, up from 281,000 the week before, according to the U.S. Department of Labor.

That’s much higher than economists were predicting. Goldman Sachs had estimated 2.25 million new claims.

The previous record was during a week in October 1982 during a recession, when claims hit 695,000.

The U.S. Department of Labor said states continued to cite new claims in the services industries broadly, particularly accommodation and food services. Additional industries heavily cited for the increases included the health care and social assistance, arts, entertainment and recreation, transportation and warehousing, and manufacturing industries.

Maine may lose close to 62,000 jobs, or 11.5 percent of private-sector employment, by this summer, according to the liberal-leaning Economic Policy Institute in Washington, D.C. It said leisure, hospitality and retail businesses will be especially hard hit, as they make up 28 percent of private employment.

Estimates of job losses are changing rapidly as the virus spreads, the institute said. Just one week ago, it had estimated the job losses in Maine by summer at 23,000.

The institute estimated that the national economy could lose 14 million jobs by this summer. It said that while a $2 trillion federal stimulus package could offset some of the losses to workers, many people may need to remain out of work, potentially for months, to stop the spread of the virus.

The U.S. Senate on Wednesday night approved the largest stimulus package in U.S. history that will send cash to American families, boost unemployment benefits and help small businesses. It still needs to be approved by the U.S. House of Representatives before it goes to President Donald Trump.

The pinch for Maine businesses started last week, when Gov. Janet Mills ordered all restaurants and bars to suspend dine-in service for 14 days. She also signed a bill that expands unemployment benefits to employees affected by the outbreak.

However, the numbers do not include the effects from stronger measures taken this week. Mills ordered public-facing businesses that are not essential to close just after 12:01 a.m. Wednesday.

The city of Portland went a step further, ordering a shutdown of all nonessential businesses as of 5 p.m. Wednesday. The emergency order also curtails the movement of residents, who only can leave their homes to access essential services such as grocery stores, pharmacies and a handful of other businesses, though outdoor exercise and dog walking are permitted.

Maine workforce officials said they are not sure how long businesses will need to remain closed nor what the full economic effect on the state will be. To try to relieve some of the financial pressure on workers, the Maine Department of Labor has waived the normal one-week waiting period before workers can file for unemployment.

Confirmed cases of COVID-19, the illness caused by the coronavirus, rose to 155 in 11 counties on Thursday, up 13 cases from Wednesday. Dr. Nirav Shah, the director of the Maine Center for Disease Control and Prevention, said Wednesday that the increase in cases will continue, and it isn’t clear when coronavirus infections will peak.

Before the virus began spreading worldwide in December, Maine’s unemployment rate had been on a record pace of being below 4 percent for 48 consecutive months in January, at 3.1 percent adjusted seasonally.

The Maine Department of Labor is expected to release February’s unemployment rate Friday.

 


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