Determining causation

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While unemployment remains at a record high, New Jersey just recorded its lowest number of new jobless claims since mid-March, as the COVID-19 pandemic tapers off and restrictions on businesses are slowly lifted.

Data from the U.S. Department of Labor show that 33,290 New Jerseyans filed for unemployment in the week ending May 23. Nearly 1.2 million state residents have been laid off or furloughed since mid-March when a host of restrictions were put in place on which businesses could stay open, in order to curb the spread of the virus.

The businesses forced to close included dine-in restaurants, non-essential retail, bars, casinos, malls, nail and hair salons, most forms of construction, indoor and outdoor amusement activities such as golf courses and theme parks, and gyms.

But the New Jersey Department of Labor said the latest numbers mark “the lowest weekly total since mid-March”—when for the week ending March 8, the state saw only 9,348 jobless claims.

For the week ending May 16, 42,365 New Jerseyans filed for unemployment, 69,689 for the week ending May 9, 87,540 for the week ending on May 2, 71,017 the week ending April 25, and 139,277 the week ending April 18.

Labor experts and economists questioned whether these recent declines could be chalked up to a relaxation in rules, or the slowdown of the pandemic.

“There’s fewer people to be unemployed in those sectors,” said Brandon McKoy, president of the progressive advocacy group New Jersey Policy Perspective. “We have fewer people who are still in a position … to be unemployed right now.”

Or, as Yarrow William-Cole, the workplace justice director at New Jersey Citizen Action put it, “at a certain point you start to hit saturation of people who are out of work.”

Gov. Phil Murphy has only in May begun rolling back restrictions that were put in place in the state on businesses and mass gatherings. Most of the reopenings permit outdoor activities that allow for social distancing – maintaining 6 feet of space between individuals – such as construction, non-essential retail with curbside pickup-up, state and county parks, and beaches and boardwalks.

Even as those open back up, employment could be slow to climb, according to Christopher Hayes, a labor historian at the Rutgers University School of Management and Labor Relations.

“Yeah you have takeout and delivery” but “they don’t need many people to do that. Servers are gone, hostesses are gone, you need what, maybe one cook,” Hayes said.

Memorial Day weekend was the first test for what a summer of COVID-19 could look like. But according to Murphy, the lackluster turnout on the Jersey Shore was more because of the rainy weekend weather rather than the business closures.

If the rollback does affect the state’s unemployment rate in May, for better or for worse, that data will not be available until mid-June. April was the first full month that the restrictions were in effect.

The rollbacks to date make up the first three phases of the reopening, which precede a “new normal” where life in New Jersey would regain some semblance of the world before the pandemic.

Sporting events and other crowded revenues would be last, Murphy has maintained. Indoor activities such as hair salons, casinos, dine-in restaurants and bars would be later on the list.

“Even if they said ‘open your businesses’ it’s going to take a while for people to be comfortable,” said Tom Bracken, president and chief executive officer of the New Jersey Chamber of Commerce. “The recovery’s going to take a while.”

“You look at the example of airlines, no one has shut them down,” Hayes added. “No airports were shut down, no airlines were closed … but travels are down, 80 to 90 percent … because people don’t feel safe doing it.”

According to data the state Labor Department released on May 28, 1.17 million jobless claims were being paid. The agency said earlier in May that it would likely be paying out 1 million unemployment claims per week by mid-June.

As of that date, a total of $4.3 billion in jobless benefits were being paid out, $1.6 billion from the state’s own unemployment fund, and $2.5 billion from the federal expansion outlined under the Coronavirus, Aid, Relief and Economic Security Act, or CARES Act.

The total also includes $247 million in benefits that have been paid under the federal Pandemic Unemployment Assistance program, which extends jobless benefits to previously ineligible freelancers and independent contractors.

“Our Department has made major strides over the past two weeks in getting more benefits to more eligible New Jerseyans,” Labor Commissioner Robert Asaro-Angelo said in a May 28 statement. “We have cleared many of the claims that had issues, have now paid out most of the PUA claims, and have started to process extended benefits.”