SALT LAKE CITY — Even though Utah has paid out seven years worth of jobless benefits in just the past five months, a Workforce Services official does not believe the state is in danger of joining nearly a dozen others facing insolvency in their unemployment services funds.
According to Utah Unemployment Insurance Division Director Kevin Burt, 11 states have paid out more benefits than their unemployment trust fund balance has, and eight more states have requested permission to borrow federal funds because they are going to go insolvent.
Utah has paid out $1.3 billion in unemployment benefits this year, Burt said, two-thirds of which was funded by the federal government. The state paid just over $30.5 million in benefits last week, it reported Thursday, as the number of new claims for jobless benefits in Utah declined for the fourth straight week.
The Department of Workforce Services said in its weekly update that 4,854 new claims were filed for unemployment compensation for the week of Aug. 2 through Aug. 8, along with 73,300 continued claims. The week before, more than 81,000 had filed for jobless benefits.
“A total of 20 states have seen more than 75% decrease in their state trust fund balances, (but) Utah right now is not projected to go insolvent,” Burt said. “This year, we are certainly getting challenged as we have paid out historical claims, but we do not expect insolvency. Certainly this year, we’ll continue to monitor the progress, and there are promising trends with the decreasing continued claims.”
He is optimistic as the number of claims has been dropping steadily for the past month, and that changes to job attachment rules — where a person who lost a job due to the pandemic but is expecting to be hired back by the same company does not have to report efforts to contact other potential employers — will encourage people to look at jobs in other fields and not rely on unemployment.
“Active job search efforts will hopefully connect those seeking work to where economic growth is occurring as employment is critical for real stability rather than the time-limited unemployment benefit,” Burt said.
He noted that individuals who are looking for work may have to take a job in another career field if their industry has yet to begin rehiring those who were furloughed due to the coronavirus outbreak.
“We are encouraging them to look for work where opportunities exist in this new normal,” he said.
The expanded use of the job attachment status was needed to deal with an unusual time.
“That’s what made this spike in unemployment different than a recession, individuals in a recession are usually let go with no expectation to return,” Burt said during a weekly news conference in Salt Lake City. “This pandemic was certainly different in the speed in which people needed assistance, the volume of number of individuals that apply for assistance, as well as the expectation that many would return to their employer once the economic activity was to resume or some of the restrictions were lifted and they were able to return.”
He said every employer in the state of Utah will be notified that they can request a continued job attachment for their employees that they expect to return, but that job attachment request has to come from the employer for employees to get the designation.
“An individual that removes a job attachment is not ineligible for unemployment. Simply they will be asked to register for work,” he explained. “They have to complete an online assessment. With that online assessment, it will require them to do online workshops that will prepare them for the job search, and then every week, beginning (Aug. 23), they will have to report their four job contacts made.”
Across the nation, according to the Associated Press, the number of Americans applying for unemployment dropped below 1 million last week for the first time since the coronavirus outbreak took hold in the U.S. five months ago, but layoffs are still running extraordinarily high. The figures show that the crisis continues to throw people out of work just as the expiration of an extra $600 a week in federal jobless benefits has deepened the hardship for many — and posed another threat to the U.S. economy.
Applications for jobless benefits declined to 963,000, the second straight drop, from 1.2 million the previous week, the government said Thursday. That signals layoffs are slowing, though the weekly figure still far exceeds the pre-outbreak record of just under 700,000, set in 1982.
Overall, fewer people are collecting unemployment, a sign that some employers are hiring. The total declined last week to 15.5 million, from 16.1 million the previous week.
”Another larger-than-expected decline in jobless claims suggests that the jobs recovery is regaining some momentum, but ... much labor market progress remains to be done,” Lydia Boussour, senior economist at Oxford Economics, told the AP.
Hiring is believed to have slowed since the spring, when states reopened and millions of workers at bars, restaurants and stores were rehired. The job gain in August will probably fall short of the 1.8 million added in July, analysts say.