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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For the first time in almost two months, the total number of people receiving government unemployment benefits across all programs rose. For the last seven months, there has never been fewer than 20 million people getting aid, which is more than 12% of the those who are working, or who are not working and are looking for work.

More bad news on the economy also came in the report on October income and spending. Personal income sank 0.7% as compared to September. This was mainly due to less government unemployment aid, showing that many people who lost their jobs in April are losing their benefits, as opposed to getting jobs. Personal spending rose, but at less than half the rate of growth as September.

Weighing on the economy is the surging pandemic, with an average of more than 175,000 new infections a day for the last week. In the last day, more than 2300 Americans died of COVID-19, within striking distance of the all-time high set in April. A record 88,000 people are now hospitalized with the coronavirus, straining hospitals across the country. While many field hospitals are being built, the problem is lack of staff, especially those who are trained.

Despite a warning from the Centers for Disease Control not to travel, 4 million people have already taken to the air for the holidays. Many doctors and public health workers are worried about a spike in the middle of the surge that could overload the health care system and lead to a rising death rate at the end of the year.

On top of the growing health crisis, almost two-thirds of those collecting benefits, or more than 13 million people, face a financial cliff in a month. On December 26, the federal PUA and the federal Pandemic Emergency Unemployment Compensation, for people who have hit the six-month time limit for regular state benefits, will wind down. While the Democrats in the House of Representatives passed a bill to extend benefits back in May, the Republicans in the Senate have opposed this and still haven’t passed a bill to be able to negotiate with the House.

In addition, the moratorium on evictions, the extension of student loan payments, and the forbearance of home mortgages are also running out with the new year. According to a survey earlier in November, there are almost 30 million tenants behind on their rent, which could lead to millions of evictions in 2021. State and local governments also face hundreds of billions of dollars in budget deficits that have to be closed over the next 18 months. These will lead to even more cuts and job losses, especially in public schools and colleges.

The Trump administration is now cooperating with President-elect Biden in a transition. But the Trump team seems to be going out of its way to hurt the economy before the administration ends. Last week, Trump’s Treasury Secretary Stephen Mnuchin ordered the Federal Reserve to return billions of dollars to the Treasury. This money guarantees against any losses from three Federal Reserve lending programs. The Fed’s lending to large corporations, medium size businesses, and state and local governments backed by the Economic Stabilization fund will now have to wind down just as the economy turns down again and pandemic relief programs are coming to an end.

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In addition to the $600 a week in extra unemployment benefits, another part of the CARES act protecting tenants is about to expire. There has been an eviction ban on all apartment buildings that are part of federal assistance programs, or whose landlords have federally insured mortgages. These come to more than one out of four rental units in the United States.

At this time, the job market seems to have bottomed out. The latest report on unemployment insurance benefits or UI released by the U.S. Labor Department said that in the week ending July 11, 1.3 million new claims were filed, down 14,000, or about 1%, from last week’s initial estimate. New claims for the federal Pandemic Unemployment Assistance or PUA, aimed at self-employed and gig workers, were about 930,000, for a total of new claims of 2.2 million, down slightly from 2.3 million the week before.

The broadest measure that includes regular state UI, the PUA, and the federal Pandemic Emergency Unemployment Compensation, for the week ending June 27, also dropped by about 1%, from 32.4 million the week before to 32 million. Since the recession began in February, there are now 30 million more people who have lost their livelihood because of the pandemic and are receiving government aid. While millions of people are lining up at food banks and more people are going hungry, the FPUC and eviction moratoriums have prevented a wave of evictions, foreclosures and loan defaults.

All that is set to end at the end of July. While the Democrat-controlled House of Representatives did pass another relief bill two months ago, the Republican-controlled Senate has done nothing but criticize the HEROES act – Senate leader Mitch McConnell said that it was “dead in the water.” Like the Republican’s attack on the Affordable Care Act, where they promised to “repeal and replace” where they never proposed a replacement, the Republicans are now saying that they will have a new relief act but don’t have a specific bill.

Part of the reason is that the Republicans really don’t care about working people or small business – just their big business buddies that fund their campaigns. But below this is the belief that government aid will keep the poor from working – thus their targeting of the FPUC, which allows two-thirds of the unemployed to take home as much or even more than they made before they lost their income.

In fact, people would like to work – but not at the risk of their and their family’s health and safety. Nor do they really want to work for the low-paying, no benefit, often part-time and/or temporary jobs that made up more and more of the jobs even before the recession hit.

If the FPUC was keeping people from jobs, we would see wages rising to entice more people to work. In fact, for the first time since the Great Depression in the 1930s, we are seeing more and more businesses cutting wages. Other businesses that increased wages right at the beginning of the pandemic have almost all eliminated these raises.

In addition to the FPUC’s ending, the pandemic itself is growing to new records. The latest daily infection count of more than 75,000 is up 50% in just two weeks. Hospitals in the hardest hit states of Florida, Texas and Arizona are again scenes of overflowing beds, staff shortages, shortages of personal protective equipment and medicines. Deaths are hitting record highs in the hard-hit states. In response, Republican Governor Brian Kemp of Georgia signed an executive order forbidding cities or counties from mandating masks and is suing the city of Atlanta for doing so.

But more and more cities, counties and states are rolling back their ‘reopening’ of the economy, which started too soon and went too far, laying the ground for the current resurgence of the pandemic. This is taking an inevitable toll on jobs, which like the infections themselves, may not show up for a few weeks. With the pandemic again bearing down on the economy, extending the FPUC is more important than ever.

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