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Unemployment Claims Decline But for How Long

Published Thursday Sep 10, 2020

Unemployment Claims Decline But for How Long

Despite the fact that the U.S. is still firmly in the grip of the COVID-19 pandemic, new unemployment claims decreased week-over-week on August 24, and were 87% below the peak during the COVID-19 pandemic. 

To identify which states’ workforces are experiencing the quickest recovery from COVID-19, WalletHub compared the 50 states and the District of Columbia across three metrics based on changes in unemployment claims. 

New Hampshire ranks 49th for recovery since the start of the crisis, this is impacted by the fact that NH typically had the lowest unemployment rate in the U.S. so has a higher bar than other states to get recover that ground. 

View the full report

Jill Gonzalez, WalletHub analyst, answers five key questions:

How might the Labor Day holiday help or hurt U.S. employment?

“Initially, Labor Day should help U.S. employment because it is a day where retailers typically offer substantial sales. The holiday should lead to a bump in retail purchases, which will put more money in the hands of merchants for future hiring,” said Gonzalez. “As beneficial as Labor Day has the potential to be, it’s also possible for the holiday to hurt unemployment in the long run. If people do not practice social distancing and hold mass gatherings without safety precautions, Labor Day could lead to spikes in COVID-19 that would cause more business shutdowns and therefore more unemployment.”

What measures can we use to detect/trace COVID-19 in the workplace to prevent outbreaks that will lead to more unemployment?

“In order to prevent outbreaks of COVID-19 in the workplace that will lead to more unemployment, we should implement testing upon arrival as well as use apps to perform swift contact tracing for any employees found to have the virus,” said Jill Gonzalez, WalletHub analyst. “The problem with current COVID-19 testing is that in order to preserve accuracy it is expensive and slow. For workplaces and public spaces like airports, we need to have cheap, near-instant tests available for mass testing, even if they are not quite as accurate. Such tests are in development but need FDA approval.”

How will unemployment be impacted if schools only hold remote learning this fall?

“If schools only provide remote learning this fall, we could see a jump in unemployment. Young children will need supervision during the day, and parents who are unable to do their job remotely may be forced to take a leave from work to provide that supervision,” said Gonzalez. “Forcing parents to stay home could be especially devastating financially for single-parent households. To avoid a spike in unemployment, we should create a detailed plan for having in-person learning while providing a high level of safety for students and teachers, which will allow us to minimize negative consequences for both public health and the economy.”

How is the wearing of masks linked to unemployment?

“Wearing masks helps prevent the release of droplets from the mouth or nose that may contain COVID-19, which consequently can help minimize the spread of the virus. Countries with more prevalent mask wearing have been less impacted by coronavirus, so mandating the use of masks in public may help us proceed to a full reopening sooner,” she says. “Consumers are more comfortable going out when they know everyone will be wearing masks, according to a recent WalletHub survey, and greater confidence leads to more people leaving the house and supporting businesses again.”

How do red states and blue states compare when it comes to recovery?

“With an average rank of 24 among the most recovered states, blue states had a better recovery from unemployment claims last week than red states, which rank 27 on average,” said Gonzalez. “The lower the number of the ranking, the bigger the state’s recovery was.”

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