Observers knew to brace themselves for historically bad news in Thursday’s unemployment numbers from the Department of Labor. According to data going back to 1967, no previous week had ever seen more than 695,000 people newly filing for unemployment,1 but many analysts expected this week’s number to rise into the millions.
Those fears were realized: The DOL report for the week ending March 21 saw a staggering 3.3 million people file initial unemployment insurance claims in the wake of the economic slowdown caused by the coronavirus pandemic, 4.7 times the previous high.
That eye-catching number helps represent the tangible human scale of what the coronavirus — along with the social distancing measures taken to prevent its spread — has done to the economy over the past several weeks. And it is probably actually undercounting the true number of Americans out of work in the middle of this crisis.
Policies vary from state to state, but self-employed people such as independent contractors and freelancers are typically not eligible for unemployment benefits, nor are many part-time workers, depending on the number of hours they’ve worked. (Though some states are relaxing these requirements during the coronavirus crisis.) In an economy that has increasingly shifted work away from full-time employees, the traditional measures of unemployment don’t fully describe the scope of the devastation.
And technological limitations are keeping even more out-of-work Americans from being counted in this measure. Michele Evermore, a senior policy analyst at the National Employment Law Project (a nonprofit devoted to labor and employment advocacy), told me via email that many people who have tried to file claims so far have been unable to, even if they qualify for unemployment. Evermore said state unemployment agencies weren’t set up to handle this volume of claims, and that has led to breakdowns in their filing systems. “I think they have responded admirably, but computer failures and glitches have been widely reported,” she wrote.
This implies that, on top of the current record-breaking numbers, the totals in future weeks could include a backlog of people who were unable to file their initial claims over the past few weeks. And that means more bad news to come in a statistic that is one of the bedrock indicators used by economists to gauge the state of the economy in real time.