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President Donald Trump listens to a question during press briefing with the coronavirus task force, at the White House, in Washington, DC, U.S., March 18, 2020. /AP
On Wednesday, U.S. President Donald Trump invoked rarely used emergency powers to marshal critical medical supplies against the coronavirus pandemic, and signed
an aid package
that will guarantee sick leave to workers who fall ill.
Trump tapped his authority under the 70-year-old Defense Production Act to give the government more power to steer production by private companies and try to overcome shortages in masks, ventilators and other supplies.
Yet he seemed to minimize the urgency of the decision, later tweeting that he "only signed the Defense Production Act" to combat the coronavirus "should we need to invoke it in a worst case scenario in the future."
"Hopefully there will be no need," he added, "but we are all in this TOGETHER!"
Earlier this week, Trump was still trying to downplay the warnings from Treasury Secretary Steven Mnuchin that American unemployment rate could spike to 20 percent due to the coronavirus pandemic, saying the economy is "nowhere near" that point.
People wait in line for help with unemployment benefits at the One-Stop Career Center in Las Vegas, the U.S., March 17, 2020. /AP
Meanwhile, jobless claims are surging across the U.S. after government officials ordered millions of workers, students and shoppers to stay at home as a precaution against spreading the virus.
In Ohio, more than 48,000 people applied for jobless benefits during the first two days of this week. The tally during the same period previously was just 1,825 in a week period.
In neighboring Pennsylvania, about 70,000 people sought unemployment aid in a single day, which is six times the total for the entire previous week.
"We've been getting flooded with calls," said John Dodds, director of the nonprofit Philadelphia Unemployment Project. "It's going to be a big mess, a double mess: illness and unemployment."
The growing number of people filing for unemployment checks raises fresh questions about whether states have stockpiled enough money since the last recession to tide over idled workers until the crisis ends. Some fear the demand for help could outpace the states' ability to pay claims.
"Our unemployment insurance fund is getting hit pretty hard right now," said Gov. Gina Raimondo of Rhode Island, where coronavirus-related jobless claims accelerated from zero to nearly 18,000 in barely one week.
Valerie Costa, a 41-year-old mother of two, quickly applied for unemployment benefits after the Rhode Island casino where she worked as a bartender and cocktail server closed because of virus precautions. For now, her husband is still working.
"We're limiting our spending. But we also really don't know what to expect," she said. "Most of us live through our tips, and if no tips are coming in, that makes things tough."
To shore up their trust funds, some states also cut the amount and duration of benefits for those who became unemployed in the future.
"States aren't really recession-ready, because it's so hard for people to get benefits, stay in the program, and the benefits are insufficient," said Michele Evermore, a senior policy analyst at the National Employment Law Project, a New York-based group that advocates for low-wage workers and the unemployed.
Unionized hospitality workers apply for unemployment benefits at the Hospitality Training Academy in Los Angeles, California, U.S., March 13, 2020. /AP
Warnings to stay away from public gathering spots also have made it more complicated to apply for benefits, with some state unemployment offices closed to the public. Instead, states have shifted more applicants from offices to websites and phone calls, but even those systems are being taxed.
New Jersey Gov. Phil Murphy said the number of unemployment insurance requests was so high at the start of this week that it crashed the state labor department's website.
New York's labor department said it's experiencing "an unprecedented increase" in calls and online visits for unemployment benefits. During the first half of Tuesday, it had 110,000 website visits and 21,000 phone calls. That's more than two times the web traffic and 10 times the phone calls of the entire previous Tuesday. At times, the surge was too much for the agency to handle.
Governors and lawmakers in many states took action this week to make unemployment benefits easier and quicker to get. Some also waived rules that disregard the first week of unemployment or extended the total number of weeks people can be eligible.
In North Carolina, which offers less in jobless benefits than most states, displaced workers won't have to be actively looking for a new job, as is required for traditional benefits, and employers who must lay off workers won't be financially responsible for the benefits their workers receive.
Kansas lawmakers worked quickly Tuesday to pass legislation that eliminates a one-week wait to begin receiving benefits and expands their duration from 16 to 26 weeks. But House Commerce Committee Chairman Rep. Sean Tarwater, a Republican, expressed concern that the economic problems caused by the virus pandemic could deplete the state’s unemployment fund in less than a year, even though it’s ranked in the top quarter nationally.
Jobless claims and unemployment also are rising around the globe. The UN's International Labor Organization estimates that fallout from the coronavirus outbreak could lead to nearly 25 million job losses worldwide and drain up to 3.4 trillion U.S. dollars of income by the end of this year.
(With input from agencies)
