This headline is not a joke. Here’s the chart showing initial unemployment claims through this week:
The Washington Post says this is a “stunning sign of an economic collapse.” EPI calls it a “portrait of disaster.” That’s nonsense. It’s a deliberately engineered temporary freeze. And one of the reasons we should be able to get through it without permanent damage is that we passed a rescue bill that vastly increases unemployment benefits. We want lots of people to apply for benefits. The more the better.
So yes, this is good news. It means that laid-off workers are applying for benefits, and nearly all of them will see no reduction in their income. In fact, many will see an increase.
Now, having said that, I’ll backtrack on my suggestion that states shouldn’t have too much trouble handling the volume of applications. I figured they could probably muddle through 3 million applications, but now we’re up to 10 million. That’s going to be a mess. Still, just knowing that help is on the way should be a huge relief for workers who have lost their jobs for the duration.
POSTSCRIPT: I will add one thing to this. The rescue bill may replace income, but it doesn’t replace lost health insurance. This is obviously a big deal, but I don’t know how big. It depends on how many laid-off workers had health coverage in the first place. It depends on how long their coverage stays in place after a layoff. It depends on how accessible COBRA is. It depends on whether you qualify for subsidies under Obamacare. There are a lot of variables here and I don’t know how they’ll all play out.