WILMINGTON – Delaware saw more than 9,000 people file for unemployment last week, indicating that the record-breaking wave of claims may be slowing as weekly total dropped under 10,000 for the first time in a month, but officials have said more waves may be coming.
The U.S. Department of Labor’s weekly update on claims showed that 9,294 initial claims were filed the week ending April 18, adding to the nearly 62,000 claims that had been filed in the first four weeks of the coronavirus pandemic. Many of those 71,136 job losses were spurred by Gov. John Carney’s mandated closure of many businesses aimed to stem the spread of the virus that has infected 3,200 people and killed 89 as of Wednesday.
In all of 2019, DOL processed about 37,000 claims, according to Delaware Department of Labor Secretary Cerron Cade. It means that the impact of the crisis will likely double last year’s total unemployment filings.
Thursday’s figures show that about 15% of Delaware’s workforce has filed for unemployment since the crisis began, roughly matching nationwide statistics. Another roughly 18,500 people were already unemployed as of February, according to state data.
That wave of assistance seekers has overwhelmed the manpower of the Delaware Department of Labor and required federal stimulus funds to bolster the depleted state Unemployment Trust Fund, which reportedly paid out $30 million in claims last week. A historic weekly high for payments has been about $3 million.
Meanwhile, employers large and small are left debating whether to remain open if legally able, and whether to furlough or layoff staff through the crisis when the workers would be eligible for enhanced unemployment benefits due to the $2.2 trillion CARES Act passed by Congress last month.
Many Delaware businesses that have sought to stay open with federal assistance through the Paycheck Protection Program, which awards loans up to $10 million for eight weeks of payroll costs as well as some property costs, have said they didn’t receive funding in the $349 billion first round of the program. Congress is expected to approve this week a second round of more than $300 billion for the U.S. Small Business Administration program, which saw more than 5,100 Delaware businesses receive loans worth nearly $1.1 billion in the first round.
Cade, the state’s labor secretary, warned that a wave of more than 10,000 unemployment claims is probably coming in May though, as self-employed workers and independent contractors become eligible to apply for enhanced benefits under the federal CARES Act.
During an April 21 press conference in Wilmington on the state’s economic impact amid the pandemic, Cade noted that the nearly 62,000 claims filed in the state included roughly 12,000 from self-employed or contract workers that were denied outright because of their current ineligibility.
He later told DBT that those 12,000 denied self-employed applicants would have to reapply when the new system is established in May. Cade also noted that his department is expecting many more such eligible workers to apply under that system when it is launched, potentially boosting the applicant roll yet again.
Despite federal unemployment aid being extended to them in March, such workers, who don’t pay into the state’s unemployment trust fund to be insured against job losses, still haven’t been able to tap into relief funds because of a lack of a state system to verify their incomes.
The Delaware Department of Labor announced April 16 that it has contracted with an outside vendor to build a software system that will allow the Delaware Division of Unemployment Insurance to verify earnings reported to the Internal Revenue Service and determine the eligibility of independent contractors and the self-employed to apply for benefits under the CARES Act.
That work isn’t expected to be completed for three to six weeks, however, meaning self-employed workers may not be able to receive unemployment benefits until as late as Memorial Day.
By Jacob Owens
jowens@delawarebusinesstimes.com
