RALEIGH — Between March 16 and April 6, 445,101 unemployment claims were filed in North Carolina, according to the state’s Division of Employment Security, which is housed under the N.C. Department of Commerce. Of these claims, at least 388,404 were directly related to the COVID-19 pandemic and resulting shutdown. Larry Parker, government and public relations manager for the DES, told North State Journal that this number is likely even higher because, in the early days of this period, they did not provide that category as an option for those filing claims.
“It’s definitely unprecedented,” Parker said. “We didn’t have 400,000 claims in a month during the recession. It took us a month to reach 100,000 claims in the recession. So for us to hit over 400,000 in just a few weeks shows you the amount of traffic that’s coming through our site.”
Much of the economy has been shut down after Gov. Roy Cooper’s “stay-at-home” order to combat COVID-19 infections, and this has led to a glut of unemployment claims.
Three economics professors, writing for the personal finance site wallethub.com on April 2, said that based on U.S. Department of Labor data, North Carolina has had the second-highest rate of unemployment increase in the nation, with a more than 6,000% jump since the end of 2019. Only Louisiana has fared worse.
“Prior to the week of March 16, we were averaging about 3,000 per week,” Parker said. “You can see that in one day, on a Sunday last week, we had over 16,000 — more than five times what we typically do in a week, we did in one day.”
The volume of contact with the state’s DES has been so high, both online and by phone, that they have had to upgrade their servers and add many more call center workers. In a sign of the level of disruption to overall employment in the state, the additional call center workers have been sent over by the N.C. Works program, also overseen by the Department of Commerce. This office, according to Parker, used to be known as the “unemployment office” because they “are really there to help people find work.” In short, the rush of phone calls from people out of work from the shutdown are being answered by others out of work from the shutdown.
Ray Starling, general counsel for the North Carolina Chamber of Commerce, addressed the state House’s COVID-19 Economic Support Working Group on April 7 and shared with them some of the data they are receiving from their national partners. He told them that, “a staggering 1 in 4 businesses have already shut down. Among those who haven’t shut down yet, 40% report it is likely they will shut temporarily this week or next week.”
The N.C. Chamber’s president and CEO, Gary Salamido, told NSJ that what the state’s business community is looking for at the moment is certainty.
“They want to protect their people and retain their employees, so as much certainty as they can have on what to expect, the better they are able to plan and find ways to do that,” Salamido said.
At the moment, the N.C. Chamber reports a negative “circular pattern” where “consumer sentiment is completely disrupted,” which has a negative impact on consumer spending. But consumer spending “accounts for 70% of U.S. GDP,” and “the key to consumer spending is employment,” which has taken a drastic hit.
One regulation has been temporarily lifted, the 10-day waiting period to allow employers to challenge the claims. An executive order from Cooper waived the “work search” requirement on the weekly filings. If the filer has been impacted by coronavirus, whether or not they are looking for work, they are instructed to mark the “yes” box saying they have been searching.
“It’s very difficult to go out there and find work right now, so it certainly makes it a lot easier on these hundreds of thousands of people who are out of work due to COVID-19,” Parker said on the work search being waived. “I think anybody who has been impacted by COVID-19, whether you’ve been laid off or had your hours reduced, should certainly apply for unemployment; that’s what it’s there for.”
Parker said the unemployment trust fund had a $3.8 billion balance before the pandemic, and all the initial claims from COVID-19-related job loss will come from that. Beyond that, DES is waiting for guidance from the U.S. Department of Labor on how to fund everything from the CARES Act, which for some filers could provide an additional $600 a week and 13 weeks of benefits.
“We have not been here before and there is not a scenario in recent memory that compares, so it is challenging to forecast what a recovery will look like,” Salamido said on how the state will pull out of the crisis. “The NC Chamber team is in close contact with our membership, and we continue to share feedback with our state’s leaders in an effort to make that transition as certain and as smooth as possible. What I do know is that North Carolinians are strong and North Carolina’s business community is resourceful. We will get through this by working together.”