Art Woolf is a columnist for VTDigger. He recently retired as an associate professor of economics at the University of Vermont.
Last week, 2,913 Vermonters applied for unemployment insurance, the fifth consecutive week that the number of applications has declined. At its peak in early April, nearly 16,500 people were laid off and applied for unemployment insurance.
In February, before the pandemic-induced economic lockdown, an average of 600 people were applying each week so we are still seeing nearly five times as many layoffs as we did just a few months ago.
Nearly 57,000 Vermonters received unemployment insurance checks last week, which were fewer than the week before and fewer than the week before that. At its peak three weeks ago, the state sent out more than 76,000 checks to people.
Why has the number of people getting unemployment checks been declining? Most of it probably has to do with the mechanics of the new unemployment insurance regime. All of those people who are currently receiving benefits are probably people who were on payrolls, and whose employers paid into the unemployment insurance system.
The other 19,000 are likely self-employed Vermonters who are eligible for federal Pandemic Unemployment benefits, a separate program focusing on self-employed workers who did not pay unemployment insurance taxes.
They probably received traditional state-funded unemployment benefits when the state’s aging computer system was not working and the goal was to get checks out as fast as possible to anyone who applied, whether they were eligible or not.
As the computer system got unclogged those ineligible people were moved from the traditional unemployment system to the Pandemic Unemployment category, but by the end of last week they had not received those checks.
It’s complicated, and no doubt frustrating to those people, which explains the complaints from people who could not apply online, could not speak to anyone on the telephone, and were not receiving checks they thought they were eligible for.
Vermont is not alone in this problem. Twenty-nine other states had not sent out any federally funded Pandemic Unemployment checks as of the end of last week. But that means 21 states were faster to serve those people than was Vermont.
Those self-employed workers should be receiving those checks this week, which means the total number of people receiving unemployment insurance should skyrocket. When we get the next batch of numbers next Thursday, we should see an increase in the number of people receiving checks from the current level of 57,000 to around 80,000.
That won’t mean the economy has suddenly worsened; it will be an indication that the backlog of claims and sorting out who is getting money from what source is finally being resolved.
The bigger story next week will be on Friday, when Vermont’s April unemployment rate will be announced. That won’t be a pretty picture.
