
Additional 6.6M File for Initial Unemployment Benefits [pdf] - treyfitty
https://www.dol.gov/ui/data.pdf
======
stupandaus
Building on my analysis from last week:

1\. This week's 6.6M new jobless claims represents ~4% of the estimated
~160-165M US Workforce.

2\. This is incremental to the 3.3M new jobless claims filed week ending 3/21,
totaling ~10M total jobless claims in the past 2 weeks.

3\. The US unemployment rate was ~3.5% as of EOM February [1], so cumulatively
that means we've hit ~10% unemployment as of EOW 3/28 (~10M incremental
jobless claims = ~6%). That number is likely low and continuing to increase,
as new jobless claims do not account for gig workers and many state
unemployment sites have been inundated by these claims resulting in site
crashes and people unable to file claims. In addition, layoffs have almost
certainly continued between 3/28 and today.

4\. The consensus estimate for this week's jobless claims was ~3.76M jobless
claims, and the 6.6M actual claims blow the consensus estimate out of the
water. That said, some analysts such as Goldman Sachs had estimated ~5.5M
joblesss claims. Goldman Sachs estimates that unemployment will peak at ~15%.
[2]

[1]
[https://data.bls.gov/timeseries/LNS14000000](https://data.bls.gov/timeseries/LNS14000000)

[2] [https://www.cnbc.com/2020/03/31/coronavirus-update-
goldman-s...](https://www.cnbc.com/2020/03/31/coronavirus-update-goldman-
sees-15percent-jobless-rate-followed-by-record-rebound.html)

~~~
doh
This is just a personal opinion, but I think ~15% unemployment peak is far too
optimistic.

I believe that 50-75% of restaurants will never reopen. 20-35% of small to
mid-size hotels, venues, spas will declare bankruptcy within this year. Both
employ a lot of people.

So I'm afraid the number is going to much higher, maybe even double.

~~~
tachyonbeam
I know it's really not PC to talk about this (how dare you value money over
human lives!?), but at what point does the economic damage this causes become
too much? 15% joblessness would be ~50M americans. If just 0.1% of them commit
suicide as a result of losing their jobs or businesses, that would be 50,000
dead.

Maybe there's some kind of intermediate between forcing everyone to stay home
and not having any mitigation measures in place whatsoever? Maybe a midway
strategy would be less destructive. Protecting the economy isn't just about
protecting the rich. The rich will be fine, they will get huge government
bailouts (zero-interest loans). However, as you point out, a large percentage
of small businesses will never reopen. If anything, this crisis is hugely
benefitting Amazon & co.

~~~
usaar333
We're not going to hold stay at home forever - even Wuhan is exiting lockdown
(after 2.5 months).

~~~
doh
Unfortunately not really
[https://www.bloomberg.com/news/articles/2020-04-02/chinese-c...](https://www.bloomberg.com/news/articles/2020-04-02/chinese-
county-back-under-lockdown-after-infection-re-emerges)

------
PragmaticPulp
Unemployment benefits have been significantly expanded under the Coronavirus
aid bill. The benefit amounts will sound small if you're living in an
expensive city like SF or Seattle, but $600/week from the federal government
and a similar amount from state unemployment insurance means that unemployment
benefits can pay up to an equivalent of $50-60K/year right now. That goes a
long way in most parts of the country, especially when you're stuck at home.
Of course companies are going to opt to shift people to unemployment benefits
while they're forced into downtime.

In some situations, people can actually earn _more_ from unemployment benefits
by being laid off due to some hasty oversights in the aid package (Reference:
[https://www.cnbc.com/2020/03/27/how-unemployed-workers-
could...](https://www.cnbc.com/2020/03/27/how-unemployed-workers-could-get-
more-than-100percent-of-their-paycheck.html) ). This doesn't account for lost
benefits or the risk involved in losing a job, but it could disincentivize
people returning to work if it means their income will go down.

Of the many people I know who have been “laid off”, all of them have been told
they’ll be first in line to be re-hired the moment quarantine ends.

If a business can’t make money, it makes more sense for them to let employees
collect unemployment during the downtime than to overextend the business’s
balance sheet. During normal times, this is a common tactic for seasonal
businesses. I have friends in seasonal tourism industries who received
training on applying for unemployment benefits during their annual off-season
layoffs each year. They even have an explicit system for tracking seniority in
the re-hires.

Of course, the longer this quarantine lasts, the more likely their businesses
are to disappear before they can re-open. Unfortunately we won’t know this
number for many months. For now, the initial unemployment claims number can't
discriminate between jobs that have been temporarily paused and jobs that have
been eliminated.

~~~
aluminussoma
What will the employees, in the US at least, do for health insurance? A
pandemic is when you need it. These employees will be strained to pay for
COBRA.

I fear that we will see revolutions in countries where this is not contained,
from either a health or economic perspective. An old saying is that you should
buy stocks when there is blood in the streets. I hope that doesn't become
literal.

~~~
Frost1x
Also I'm not sure if I'm in agreement with the tactic of immediately pushing
employees to unemployment. Unemployment is funded by taxes which are largely
paid by the same people being laid off. If you're promoting businesses push
people to unemployment instead of first trying to cover them during hardship
and also taking a loss (as everyone else is), you're pushing for more tax
subsidies to businesses indirectly.

Unemployment is a safety net that needs to exist but it shouldn't, IMHO, be
the first option to jump to. That's irresponsible unless of course you can't
cover your employees at the rate unemployment can--then it's reasonable for
everyone's sake.

You should look at supporting employees part time if possible, especially
those who have many years association with your business that are valued
players. Your first order should be to take care of yourself and those around
you, not immediately jump to social safety nets and pass the hardship. Let's
re-establish long term employee and employer relationships and get rid if this
"everyone's constantly disposable" economic mindset.

If I'm laid off, I'll first look at my savings and hit the job market before I
consider driving right into unemployment. I dont want to utilize that unless I
need to and my other options fail. I expect businesses to do the same and be
responsible contributors to society. If not, let's take a bit more of their
stimulus money back and chuck it to other businesses and people that don't run
away at the sight of a loss and try to persevere through difficult situations.

~~~
withinboredom
> If I'm laid off, I'll first look at my savings and hit the job market before
> I consider driving right into unemployment.

This is a great case of “the world doesn’t revolve around you.”

1\. Most states only give you a few weeks to apply.

2\. You already “pay” for your unemployment several times over during your
career through unemployment insurance. Your employer pays this, but they could
have paid you more if they didn’t have to.

3\. It’s income. You still pay taxes on it. It’s not free money out of
nowhere.

Use the tiny social net that you have instead of waiting too late and out of
money and having to rely on family or friends.

~~~
_curious_
"2\. You already “pay” for your unemployment several times over during your
career through unemployment insurance. Your employer pays this, but they could
have paid you more if they didn’t have to."

Do you have any data on this assertion?

~~~
withinboredom
If you assume a 1.55% tax rate for UI, you will contribute about a week of
unemployment per year of work (at least in S.C.) at 70k taxable income after a
modest administrative overhead of 60%.

If you manage to work from 25 to 65 at an average of $70k per year, that’s
almost a year worth of unemployment.

~~~
_curious_
OK going with your assumptions, I wonder what % of people collecting
unemployment benefits have worked for 40 years at an average of $70k/yr? I am
not aware of a single individual, but maybe just don't know the right people.

~~~
withinboredom
It should scale out at about 1 week per year of work, no matter how much you
make. $70k per year is how much you need to max out unemployment in S.C.,
where I used to live. If you make less than that, you'll have less per week,
if you make more than that, you're pretty royally screwed.

~~~
_curious_
Ok say that is true...do you know:

1\. Are unemployment employment benefits only extended to those who have
already themselves paid a certain amount in UI taxes AND that amount is the
extent of the benefits available to them?

2\. If the answer above is no - do you know what % of end up receiving more
money in unemployment benefits than they have 'pre-paid' or will 'reimburse'
thus a net cost to the system over the course of their living/working lives?

3\. What happens to the unemployment taxes paid by people who choose not/never
to file for unemployment benefits, even when unemployed? Do those individuals
ever get their money back?

4\. This line of questioning leads me to wonder why in the US is UI/UB not
just directly linked to each individual?

~~~
withinboredom
1\. Sort-of-but-not-really. Usually, you have to work a certain number of
months or weeks at the place you get laid off, before you are eligible.
However, there's not a "lifetime minimum." If you get fired for doing
something "bad" (at-fault) then you may not be eligible at all.

2\. Usually, there's a cap for how long you can be on unemployment. You can't
be on it forever. You also have to provide proof that you're looking for a
job. Some states require signatures from those companies, some just require a
list of companies you've applied to and they do their own random validation.

3\. Companies pay the unemployment insurance tax on your behalf, and if you're
unemployed and don't file, you don't get to use your benefits.

4\. 100% agree

------
treyfitty
For those living in cities that are locked down, what do yall do about
daycare? In NYC, my daycare isn't reimbursing fees, so we're continuing to be
charged with a promise of "if insurance pays out, we'll pass it down." With 2
kids, that’s $5,000. Assuming they’re closed for 3 months total, that’s
$15,000 down the drain. Now, I get that they're a small business, but their
problem is that they can't exactly layoff their daycare workers because the
governing body for daycares are pretty strict and getting new employees take a
lot of time. On top of that, they have rents due. So, I get it.

But this begs a more fundamental question: When are we going to start
pressuring insurance companies and rent-seekers to provide relief? Time and
time again, all the bailouts of the past seem to benefit them, but during a
time when we need insurance companies to pay out for business interruption
instead of claiming "act of God, we exclude pandemics...etc.," we fail to
bring them into the conversation.

~~~
technics256
The best situation all around here possibly is the concept of "Kurzarbeit", or
short work system, that exists in Germany (Denmark also has a similar one, I
believe). It basically allows employers to reduce hours they pay workers,
while the gov't helps cover the shortfall to the employee, up to some maximum
amount.

This prevents companies from having to layoff people, and allows them to
pickup the slack and rehire everyone again when things get better.

~~~
texasbigdata
A similar concept is found in the CARE Act related to employers that reduce
the hours or wages of employment.

------
hopfog
This chart is just getting crazier and crazier:
[https://pbs.twimg.com/media/EUmW1PgXYAEdggm?format=png&name=...](https://pbs.twimg.com/media/EUmW1PgXYAEdggm?format=png&name=4096x4096)

------
aazaa
There's a sense that once "lockdown" ends, thing go back to normal. In other
words, the "V" shaped recovery is the dominant mental model.

Should that not materialize, the disappointment and anger will reach level not
seen in most people's lifetimes.

One reason the V-scenario might not play out is that the US still doesn't have
a handle on the testing problem. Without testing, you have no way to estimate
the danger to the public of normalizing economic activity. At the first sign
of a new outbreak, the entire lockdown cycle will repeat.

Too few people will have gained immunity, and the disease is far too
contagious and deadly to take any chances. We still don't know what "immunity"
looks like at any rate.

Alternatively, the lies about testing may have burned people so badly by the
time the "all clear" is given (whatever that looks like), that few will
believe it. The effect would be a national strike/boycott.

~~~
rootusrootus
> Should that not materialize

And soon. A great many people have a low tolerance for indefinite lockdowns.
The longer we go without any kind of plan, the more likely it becomes that
people will begin disregarding it. I already see that the amount of traffic on
the roads is increasing over time.

What we need are leaders, and it's glaringly obvious that in most states we
don't have that. During peacetime nobody notices, but when the SHTF the
leadership vacuum is palpable.

------
bearjaws
My job has been inundated with applications from people who are not even in
tech in any way (think like barbers & home depot workers). I see now why so
many companies use automation to filter out resumes.

~~~
alephnan
One of the requirements for unemployment is to show proof of actively applying
for jobs.

If workers are not interested in actually resuming work for the time being,
they would apply jobs for which they would not qualify for, preferably ones
that won’t even contact them back.

This is a very cynical view, but could be a partial explaination.

~~~
_curious_
"If workers are not interested in actually resuming work for the time being,
they would apply jobs for which they would not qualify for, preferably ones
that won’t even contact them back."

It's not cynical - it's real.

------
swalsh
I've seen a lot of small businesses do the math, and realize that with the
additional $600 provided by the stimulus bill, it actually works out better
for some lower paid workers to lay them off (and presumably rehire later). I
wonder if this might explain higher than expected numbers.

~~~
themagician
We just did that yesterday. It actually works out better for a lot of people.
The break even point in California is around $25/hr. If you made under $25/hr
it pays more to be unemployed. For some people who were part time at $15/hr or
less they will actually see paychecks double. And you no longer have to even
be looking for work to keep getting the money, at least through July 31.

------
treyfitty
Expected 3M. This new figure is about 10x financial crisis high.

~~~
bearjaws
And they want us to believe that it will be ok because of a $1200 check and
state unemployment benefits....

~~~
PragmaticPulp
> And they want us to believe that it will be ok because of a $1200 check and
> state unemployment benefits....

Not true. The unemployment benefits have also been augmented by up to
$600/week above state unemployment benefits. This amount applies even if your
state benefits have been exhausted.

The $1200 is an extra stimulus check for people whether or not they’re still
employed. Not to be confused with the unemployment benefits.

~~~
nkozyra
I don't think the $1200 goes to everyone, though, right? There's an income
threshold.

I mean, the number is almost irrelevant given the extent of the crisis. Might
as well make it a million a person because some fundamental truths of the
economy are going to completely change.

~~~
scrooched_moose
It starts phasing out at $75,000 AGI. Decreases 5% for every dollar over. For
example, if you make $84,000 AGI, you would get $1200-.05*(84000-75000) =
$750.

It decreases to $0 at $99,000.

Edit: double everything for a married couple - potential for $2400 that begins
phasing out at $150,000 and drops to $0 at $198,000.

------
generalpass
I hope that tech industry employees do not feel immune to this.

I encourage you to take a look at your customer base and think very critically
about where that money is actually coming from.

~~~
baron_harkonnen
I think there's a lot of cognitive dissonance for tech employees partially
because tech thrived in the 2008 crisis. Investors looking to make high
risk/reward investments had no where else to go but SV. If you aren't old
enough to remember the dot-com boom it's understandable you might feel tech is
invincible.

Tech will not be insulated from this and in general I think we'll see a major
contraction of the tech labour force. There are so many non-tech companies
that want in on the VC and other investor money so they are rapidly building
out expensive tech teams to create illusion that they are the next tech giant.

Not to mention the other weakness in tech: RSUs as the main factor of total
comp. If the market continues to drop, especially if it hits hards, a huge
number of SV workers will be getting automatic pay cuts due to rapidly
decreased values in RSU. A lot of expensive real estate in SV is paid for by
RSUs.

This crisis is going to be insane.

~~~
robszumski
VCs, possibly. The larger tech companies are selling 1 and 3 year deals for
software, which will see some impact, but largely distance them from the deep
V because of the length of the terms.

~~~
redisman
Sure, but what if you sold your 3 year deal to an airline that is now
effectively stuck in bankruptcy for the next 10 years. Or any of the 100 other
industries/sub-industries that are completely shut down right now. If I can't
afford to pay rent on my office I sure as heck am not paying Microsoft either.

~~~
generalpass
> Sure, but what if you sold your 3 year deal to an airline that is now
> effectively stuck in bankruptcy for the next 10 years. Or any of the 100
> other industries/sub-industries that are completely shut down right now. If
> I can't afford to pay rent on my office I sure as heck am not paying
> Microsoft either.

I'm not clear such contracts make it through bankruptcy court.

------
diafygi
Keep in mind that state unemployment websites and call centers are often
overloaded and there are many complaints that people can't even file in the
first place.

It's is highly likely that these high numbers continue for additional weeks
because all the people who couldn't get through will manage to get through in
upcoming weeks.

------
Mountain_Skies
Hopefully most of these people will be re-employed once the crisis has
subsided a bit and our ability to handle the likely echo peaks of infections
happen over the next year increases. There will certainly be starts and stops
as the highly interdependent parts of the economy try to get streamlined again
in a rather herky-jerky manner. No doubt some companies and maybe even large
portion of industries collapse. Also companies that are healthy might take
this situation as an opportunity to cut away what they consider to be dead
weight under the cover of the crisis.

Unemployment numbers, if we're lucky, will crash quickly but there's going to
be a long tail on the recovery.

------
greedo
The long term scars of this upcoming Depression will be unlike anything anyone
under 70 has experienced. And the scars will be long lasting.

My mother in law used to use Cool Whip containers for leftovers. When we'd
visit, she'd send us home with food packed in them. Usually stuff like mashed
potatoes, but often good stuff too. And when we'd visit her in a few
weeks/month, she'd ask where her containers were. This was a generation that
saved EVERYTHING. The idea of throwing something out was disrespectful. Waste
was the worst of many mortal sins. All because of the Great Depression.

~~~
0xffff2
A 70 year old today was born in 1950. What have they experienced that's worse
than this? I think this is going to be unlike anything in living memory.

~~~
kazen44
my grandfather was a teen during ww2.

This behaviour was common with him aswell. Saving even the bones of
chicken/cows to make stock.

when a was a smile child and was nagging him for something to eat, he used to
tell me i have never experienced hunger, only "trek". (which would be roughly
translated to snackish).

~~~
greedo
My father was a butcher's son during the Depression. Whenever someone in the
family would say "I'm starving!" he would get mad and explain that you had no
idea what you were talking about.

------
lquist
Any numbers on what is happening for software engineering unemployment?

~~~
nkozyra
I don't think you really need to distinguish between industries at this point.
It's all bad.

~~~
0xffff2
Is it really? I only have two direct data points, but I (government
contractor) and my brother (large company) are both still fully employed with
no immediate risk of unemployment, reduction in salary, etc.

Just look at the numbers. 20% unemployment, while horrific in both human and
economic terms, also implies 80% _employment_. When nearly everyone in the
hospitality industry is out of a job, I have to think that some other industry
is doing relatively better or the numbers would be even worse.

~~~
redisman
There's going to be a lag but software is an expense to the real-world
companies and consumers. Our revenues don't materialize from the ether. Not to
even mention what any VC-reliant companies are going to face when their runway
is over.

------
Der_Einzige
Yet you wouldn't know it based on the stock market.

Where is this collapse you all talk about? Donald Pump and Powell will just
use infinite QE and monetary policy to fix all of our problems. After all, the
US Dollar is still strong due to a liquidity shortage world-wide from everyone
being desperate to convert domestic money to USD

Until that liquidity crisis dries up within the world, stonks seem only go up.
Money printer goes brrrrr. I've never seen markets behave so effing
irrationally before. Investors are pants on head stupid at a level that
boggels my mind.

"markets can be irrational longer than you can stay solvent" is being proven
to be sage advice with this pandemic.

------
godelzilla
Now let's see how the gamblers and con artists who run health care can handle
an uninsured nation in plague... smh.

------
cycop
Private health care will try to collect on all of their costs in regards to
this pandemic, if the US government allows that it will kill the economy even
further. How long until the US Government nationalizes Health Care?

------
yalogin
How much of this is temporary and how much will be long term? Also how does
the stimulus help here?

~~~
0xffff2
No one knows. This is an entirely unprecedented event.

------
nyxtom
Is there any data on these numbers broken down by industry and profession?

------
A4ET8a8uTh0
The odd thing to me about it is that futures seem largely positive. Is it
because the CAREs act or dropped labor is supposed to equal money not spent
and thus meant to shield companies ( and investors )? I honestly do not get
how market interprets it as good news.

~~~
blago
Not necessarily interpreted as "good news", probably more like "already priced
in".

~~~
realmod
The market is just currently confused and will soon undoubtedly go down. 6.6m
this week is just insane. Hopefully we'll see some good news regarding the
virus soon.

------
jiofih
Is the title incorrect? Reading the article it says an additional 3M, for a
_total_ of six million

~~~
makomk
If I'm understanding the article correctly, the title is correct - there were
6.6M initial unemployment claims filed in the last week alone, which is about
3M more than were filed in the previous week. This would give a total of about
10M new unemployment claims over the two-week period.

