Even as jobless filings continued to slow in California, Gov. Gavin Newsom on Thursday predicted that one fourth — and possibly more — of the state’s workers would end up unemployed as fallout from the coronavirus ravages the economy.
Despite the downward trend in unemployment claims, the cumulative toll is jaw-dropping: More than 4 million California workers have lost their jobs in the last two months.
That same trend is playing out on the national stage. Claims are slowing, according to U.S. Labor Department figures released Thursday, but in the last eight weeks, 36 million workers have filed for first-time unemployment benefits, a record pace not seen since the Great Depression.
“Unemployment will peak north of 24.5 percent,” Newsom said during a news briefing on Thursday to discuss the state’s upcoming budget and currently bleak economic landscape. “This is simply without precedent.” The projection was part of the governor’s latest revised budget proposal.
The avalanche of jobless claims that has buried the state’s EDD also has hobbled the state labor agency’s call center and computer systems, a telecommunications bottleneck that has prevented many workers from successfully processing their claims and receiving even one payment from California.
Philip Hamilton, a Santa Cruz resident who is a legal services worker and process server active in Santa Clara County, said he originally filed for unemployment in mid-March but has yet to receive a payment. Hamilton also hasn’t been able to reach the EDD on the phone and hasn’t been able to log into his account on the EDD web site.
“It’s a completely broken system,” Hamilton said. “I’m very disappointed. I’ve been working since I was 14 years old. I paid for college. This is the first time in my life that I have applied for unemployment, and they need to come through for people.”
About 214,000 workers in California filed first-time claims for unemployment benefits last week, compared with 316,300 who applied in the week ending on May 2, the report Thursday from the U.S. Labor Department showed.
First-time unemployment claims in the United States totaled 2.98 million last week, down 6 percent from the 3.18 million in jobless claims the prior week, the Labor Department reported.
By some measures, about 23 percent of California’s workers have lost their jobs since business shutdowns began in mid-March.
But the pace of unemployment claims has slowed drastically in California since weekly jobless filings climbed to a dismal pinnacle of 1.06 million for the week that ended on March 28.
Unemployment claims in the state have averaged 346,000 a week for the most recent four weeks. During the four-week period that ended on May 2, the per-week average was 456,400.
Despite the improvement for California, the most recent unemployment numbers are in stark contrast to the pace of jobless claims that were filed prior to the coronavirus-linked business shutdowns.
During the week that ended on March 7, before Bay Area or statewide shelter in place orders were in effect, California unemployment claims were averaging around 41,000 a week. That means the most recent week’s totals were about five times as great as the weekly claims in early March.
Including people who have filed for regular unemployment insurance as well as those who filed under a new program for gig workers, small-business owners, and others, jobless claims since March 12 total 4.6 million, Newsom estimated Thursday.
In contrast, during the recession of a decade ago, the number of people unemployed in California peaked at 2.2 million, and the jobless rate reached a high of 12.3 percent.
Matters could worsen if California’s suddenly feeble economy fails to ward off the deadly bug’s attack on the job market.
“If the economic conditions do not improve, the possibility of unemployment north of 30 percent presents itself as an outlier,” Newsom said.
