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Kristin Murphy, KSL, File

Unemployment claims in Utah down almost 12% after unexpected 1-week rise

By Jasen Lee, KSL | Updated - Jun. 18, 2020 at 4:15 p.m. | Posted - Jun. 18, 2020 at 10:20 a.m.



SALT LAKE CITY — After unexpectedly rising last week, the number of Utahns filing claims for jobless assistance declined during the most recent week.

But despite the decline, a historic number of Utahns have filed unemployment claims.

The Utah Division of Unemployment Insurance reported Thursday that 4,847 new claims for benefits were submitted for the week of June 7 to June 13 — down nearly 12% from 5,452 claims the previous week.

The state paid out $24.9 million in traditional unemployment benefits, along with $47.1 million in federally funded, $600 weekly stimulus payments, as well as $1.2 million in federal extended benefit payments, totaling $73.2 million in jobless subsidies for the weeklong period.

“The unemployment insurance program has and continues to provide a significant amount of temporary economic stability to tens of thousands of Utahns impacted by the pandemic,” said Unemployment Insurance Division Director Kevin Burt. “However, we are just over a month away from the $600 federal stimulus ending and continued economic stability for those on the benefit will only be found in employment.”

For the week, the industries with the highest percentage of claims were office and administrative support at 13.7%, production occupations at 8.9% and management occupations at 8.6%. The counties with the highest number of people filing new jobless compensation claims were Salt Lake County at 40%, Utah County at 14.5%, Davis County at 7.3%, Weber County at 7% and Washington County at 3.7%.

Meanwhile, as the state continues to process claims at a historic level, officials note that the pace cannot carry on indefinitely. Burt said the state has already doled out $730 million in overall unemployment benefits to individuals laid off during the pandemic, however, that kind of output won’t last forever.

“Keep in mind that stability is six weeks away from being unstable,” he said during a weekly news conference. “The unemployment insurance program was never designed to be a full replacement wage.”

He said the program historically has been about a 40% replacement wage of the amount that an individual typically makes. The goal has always been to help provide some economic relief while encouraging a return to new employment or reengagement in the workforce, he said.

Because of the added stimulus approved by Congress, individuals are also receiving weekly stipends of $600, which may provide a false sense of financial security, he added. That money is scheduled to expire at the end of July, along with the pandemic unemployment benefit as well as the 13-week benefit extension.

“Some of the concern that we have is while (the number of people on unemployment) has gone down for six consecutive weeks, it only went down by 3.6%. Do remember there are jobs today, and so individuals that are in this situation, while there is some stability right now in unemployment, that stability is about to change pretty significantly in six weeks,” Burt said. “Please go to jobs.utah.gov. There are plenty of opportunities for employment, and it might be that you have to change the direction or what you have been doing because some of the economic activity that was available before the pandemic has now shifted into new markets.”

Burt said since two-thirds of funding for jobless benefits during the pandemic has come from federal sources, the state’s Unemployment Insurance Trust Fund remains solvent with the ability to continue meeting its current obligations to claimants. But that status could change if demand continues at the historic rate Utah is now facing.

“We are three months into this and we have seen a significant strain on the Unemployment Insurance Trust Fund. Do we believe that we will go insolvent this year? The answer is no,” he said. “We are monitoring when that (previously strong) economic activity (is) going to return because we are three months into it and we still have almost 90,000 people (statewide) requesting it.”

He said the hope is that as the summer continues and the economy improves as some of the pandemic-related restrictions are lifted, people will start to feel more comfortable and they will fall off of the unemployment insurance program quickly as they return to work.

“I would like to emphasize again, individuals who are stable in unemployment, remember that stability goes away (the next of next month). So one of the things that employers or employees should do, especially if they’re job attached, is they should be in contact with their employer and say, ‘Hey, how is it looking? Am I going to be able to return?” Burt said.

“Have an honest conversation with their employer. If the employer is not going to see that economic activity return in the next six weeks, then that employee should start looking at other opportunities in other industries that have seen growth have seen and improvement or have seen opportunities because maybe that industry they’re used to working in is going to be slower to return to profitability.”

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