California hit hard

San José, CA – The number of people receiving unemployment aid from federal and state governments remained very high in February. Most newspapers and media hailed the decline in the number of new applications for the regular state unemployment insurance and the federal Pandemic Unemployment Assistance, or PUA, for self-employed and gig workers for last week. However, the latest week reporting the number of people receiving aid for all programs – including UI, PUA, the federal Pandemic Emergency Unemployment Compensation or PEUC, and the state Extended Benefits – showed an increase of 700,000. The national total is nine times what it was before the start of the recession a year ago.

The big jump came with almost a million more people collecting the federal PEUC, which is for the jobless who run out of their regular unemployment benefits that only last six months. So even though the number of layoffs seems to be falling, there are more and more long-term unemployed who cannot find new jobs after more than half a year out of work.

California is especially hard hit by the crisis in unemployment, with more than 4.25 million people collecting aid, making up about 22% of the total of almost 19 million receiving unemployment aid in the U.S. In contrast, California has only 12% of the country’s total population.

Recent job gains with the slacking pandemic may reverse in the near future. The sharp decline in COVID-19 cases since early January has flattened out in the most recent week. While new infections are about 75% lower than the peak in January, they are still as high as the summer peak in infections. There are a number of new variants, some identified first in other countries, but others first found right here in the United States. They are much more contagious and are threatening to cause a fourth surge in infections. The danger of this is growing as state and local governments, under pressure from businesses, are rapidly reopening indoor activities that have a higher risk of infections.

Optimism about the future of the U.S. economy has also been seen in the rising stock market which hit new record highs earlier this month. But over the last two days, the market has sunk the most since November.

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