Colorado unemployment claims break Great Recession record

Federal law will make gig workers eligible for benefits

Ellis Arnold
Posted 4/17/20

During the fallout from the Great Recession, the week with the highest number of claims for unemployment assistance filed was the week ending Jan. 9, 2010, with 7,749 claims. This year, the week …

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Colorado unemployment claims break Great Recession record

Federal law will make gig workers eligible for benefits


During the fallout from the Great Recession, the week with the highest number of claims for unemployment assistance filed was the week ending Jan. 9, 2010, with 7,749 claims.

This year, the week ending March 21 — when Colorado closed dine-in restaurant and bar service, and hair and nail salons, spas, and tattoo and massage parlors — shattered that record.

Then, the next three weeks saw the numbers increase fivefold.

Colorado's economic upheaval during the COVID-19 pandemic has disrupted hundreds of thousands of lives, reflected in no more concrete terms than the number of Coloradans applying for unemployment benefits: those who have been laid off, had work hours reduced or have been furloughed, meaning temporarily laid off.

The week ending March 21 saw 19,745 new unemployment claims filed, according to a Colorado Department of Labor and Employment news release. That set a new state record, far outpacing the Great Recession numbers. The week prior clocked in at just 2,321.

For the week ending March 28, 61,583 initial unemployment claims came in. The following week, 46,065 initial unemployment claims were filed. In the week ending April 11, the department counted 104,217 initial unemployment claims filed.

Those four weeks represent the month-long period with the most unemployment claims filed in Colorado on record, according to Cher Haavind, deputy executive director of the state Labor Department.

In the coming weeks, Colorado may see the most unemployment benefits paid by dollar amount on record, possibly topping the record from the Great Recession, which lasted 18 months from December 2007 to June 2009 and created ripple effects of job losses lasting long afterward. A direct comparison is difficult because Great Recession data is monthly, said Ryan Gedney, senior economist for the department.

“That said, we paid out roughly $103 million in regular (unemployment) benefits May 2009 — the highest monthly total on record. From week ending March 21 to week ending April 11, we paid out $109 million in regular (unemployment) benefits,” Gedney said.

Colorado’s unemployment rate increased from 2.5% in February to 4.5% in March, according to a news release from the department. That’s Colorado’s highest unemployment rate since August 2015, according to the release.

The unemployment rate is measured based on the pay period that includes the 12th of the month.

Because the length of pay periods vary, the change in unemployment rate reflects the impact on Colorado’s employment during the first stages of the COVID-19 outbreak in the state.

Working on wait times

The state Labor Department experienced unprecedented traffic from those looking to file claims, and department officials in April were in conversations to outsource some call activity — as other states have done — to help take pressure off the regular call center, Haavind said.

The system “was handling 2,000 claims a week — now we're at, in some weeks, 60,000. The sheer volume of calls to the call center is just unmanageable,” Haavind told reporters April 16.

Haavind also warned the public about fraud: She's heard reports of people going door-to-door misrepresenting themselves or calling and asking for bank routing information and saying it regards unemployment benefits, for example.

“Just to remind folks, you should never be asked for personal identifying information” in those ways, Haavind said.

Data across industries

The five industries with highest number of claims for the week ending March 28 were:

• Accommodation and food services: 21,124 claims;

• Health care and social service: 9,717;

• Retail: 7,400;

• Other services, such as nail and beauty salons and barbers: 5,914;

• Arts, entertainment and recreation: 4,080.

“Now, you may be asking why health care and social assistance claims are in that top five list,” the department said in a “talking points” sheet for a call with reporters. “The primary driver in the increase in those claims is from offices of dentists. Offices of physicians, other health practitioners — like chiropractors and optometrists — and child day care services are also seeing substantial increases in claims.”

Gig workers, others now eligible

Those who work part-time or temporary positions as gig workers — such as driving for Lyft — are also eligible for unemployment benefits in light of the recently passed federal Coronavirus Aid, Relief, and Economic Security (CARES) Act. On April 17, the state announced that people who have lost gig work and similar previously ineligible positions will be able to apply for benefits starting April 20.

The legislation makes “pandemic unemployment assistance” available for up to 39 weeks to those not ordinarily eligible, according to the state Labor Department. That includes gig workers, the self-employed, contract employees, those who cannot work from home during a shelter order and those who have exhausted regular unemployment benefits. It also includes workers directly impacted by COVID-19, such as those who need to care for a child whose school is closed or a dependent who tested positive for the illness.

“When you add on the newly eligible workers under the CARES Act, we could easily see more than $200 million per month” paid in unemployment benefits in Colorado, Haavind said.

The state Unemployment Insurance Division has to reprogram its systems to provide the new benefits, the state Labor Department said in a news release. All eligible workers will receive these benefits backdated and will not lose out on any amount to which they are entitled, the release added.

Additional weekly $600 available

Also new under the CARES Act is the Federal Pandemic Unemployment Compensation program, providing an extra $600 per week to any individual eligible for any unemployment compensation program. The state said that provision also will become effective April 20.

Pandemic Emergency Unemployment Compensation provides an additional 13 weeks of benefits beyond the standard maximum of 26 weeks for regular unemployment benefits.

To apply for unemployment assistance, visit the state's page here.

Colorado, COVID-19, unemployment, benefits, coronavirus, Ellis Arnold


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