Four months after the first big COVID-19 layoffs, Washington state has yet to hit bottom in pandemic-related job losses, even as federal benefits are set to expire and health concerns slow the reopening of the economy.
New claims for unemployment insurance are gradually slowing: For the week ending July 4, the state received 28,393 “initial” claims, an 11% decline from the prior week, the state Employment Security Department (ESD) reported Thursday. Nationally, new weekly claims fell 7% to 1.3 million, the U.S. Labor Department reported.
But workers in Washington are still filing more than five times as many weekly claims as they were a year ago. The total number of people currently seeking jobless benefits is now above 736,000 — that’s up nearly 6% from the prior week and almost twice the highest level seen in the Great Recession.
And while the backlog of unpaid claims and suspended benefits has fallen substantially since this spring, when ESD was hit by historic layoffs and a massive fraud scam, nearly 35,000 people have yet to see their claims resolved. During a Thursday press conference, ESD Commissioner Suzi LeVine said the agency was “on target to resolve those remaining [claims] by the end of the month at the latest.”
In the meantime, the state’s decimated job market is rapidly approaching a series of what could be critical inflection points.
The $600 weekly federal pandemic benefit, in place since March, which has significantly boosted regular state benefits, will expire the week ending July 25 unless Congress extends it. At the same time, many Washington employers have reopened, but the slow pace of rehiring means many workers who have lost their jobs since March may not be called back for months — or may be given reduced hours.
Some economists have warned that in hard-hit sectors such as retail, many jobs may never come back, and that seems to fit a recent pattern of closures and cuts.
On Thursday, employees at REI, the Kent-based outdoor retailer, learned the company would be laying off about 5% of retail staff on July 15. That came a day after Seattle-based kitchenware retailer Sur La Table announced it was shuttering nearly half its locations as it prepares to be sold in bankruptcy court.
Furloughs are also expected for tens of thousands of state employees due to pandemic-related budget cuts.
ESD officials say workers who have been called back with reduced hours or have seen their current hours reduced can apply for the state’s SharedWork program, which pays partial unemployment benefits to workers whose hours are cut.
Eligible workers will also qualify for the $600 weekly federal payment.
But applicants must brave an ESD claims system that still suffers problems. Although ESD has increased staff to review delayed claims, some workers say they are still unable to contact the agency to discuss stalled claims.
Others trying to file for benefits are still being stymied because their identities have been used by fraudsters to file bogus claims. And some fraud victims say they’re still getting ESD notices demanding repayment of benefits they never received.
LeVine blamed those notices on “an automated message [that] got out before we could stop it,” and said the agency is contacting fraud victims who receive those notices to explain “that they do not have to pay.”
LeVine said the agency has recovered $361 million of an estimated $550 million to $650 million that was stolen during a fraud scheme disclosed in May.
ESD officials have been reluctant to discuss how the agency was able to recover the money, or how fraudsters were able to file so many bogus claims before they were detected — in part, officials say, to avoid tipping off future criminals. There are “many criminals who are still working the system,” LeVine said.
In the meantime, workers fortunate enough to have kept their jobs or to have been called back face their own uncertainties.
Wednesday’s closure of Duke’s Seafood on Alki Beach by Public Health – Seattle & King County after seven employees tested positive for COVID-19 is a stark reminder of just how quickly the reopening could be reversed. Some workers there said managers were exceeding state re-opening guidelines for phase two that allow restaurants to operate at 50% capacity.
Even at businesses that haven’t been hit by outbreaks, some workers fear it may only be a matter of time before they’re laid off again if a surge in COVID-19 cases leads to another local or statewide lockdown.
Others worry about the health risks of coming back to work, especially in public-facing jobs like retail or restaurants.
Most realize they may have little choice. To refuse an offer of work can mean losing unemployment benefits, even if the refusal is based on concerns around workplace safety. Such concerns would not automatically qualify workers to refuse work unless those concerns could be verified by health authorities.
“Just having a fear of the COVID-19 virus won’t be a sufficient reason” to refuse work, Levine said Thursday. “One needs to have demonstrable proof that workplace is unsafe.”
That’s unlikely to assuage workers who are being called back to work or are already working and are worried about exposure as businesses try to bring in more customers.
“Ultimately, I need to have some sort of income — I can’t just coast,” said Jason, a bartender who didn’t want to give his full name or the name of his Eastside employer.
But Jason was frustrated by the possibility that many non-essential businesses were re-opening before the pandemic was actually under control. It bothers him that he and workers like him were facing heightened health risks simply to allow “people to just go out and get cocktails or go on their Tinder dates.”