Thousands of Indiana residents are applying for unemployment benefits with every passing week of the coronavirus pandemic – at a rate more than double the highest levels of claims filed during the Great Recession.
This story by Amelia Pak-Harvey originally appeared in the South Bend Tribune.
That’s a significant strain on Indiana’s pool of money reserved for unemployment payments, which in January stood at $895 million. It’s unclear exactly how long that money, which averages roughly $300 per person of the maximum $390, will last.
But experts say it’s likely, if not certain, that such money will run out.
When that happens, the state must borrow money from the federal government in the form of Title XII loans, just as Indiana and other states did during the Great Recession.
It’s a process that once again adds debt to Indiana’s unemployment insurance fund, which already had one of the lowest ratings in the nation for financial stability before the pandemic crisis. The state finally finished paying off federal debt from the Great Recession in 2015.
Initial unemployment claims have skyrocketed in the past three weeks, as the economy reeled from the governor’s first stay-at-home order that took effect on March 25.
New claims have shot up to a high of 139,174 for the week ending March 28, and another 133,639 filed initial claims the next week.
That’s still nearly five times greater than the filing week of Jan. 10, 2009, when 28,616 new people filed for unemployment. Those figures are not seasonally adjusted.
The pandemic is incomparable to anything except, perhaps, the Great Depression, according to the Department of Workforce Development.
“Recessions usually start in one or two regionalized industries and then slowly build to affect other, dependent, employers,” the department said in a statement. “In this instance, we have the simultaneous shutdown of multiple industries nationally – no slow build or ramp-up to large-scale unemployment.”
In the first few days of April alone, the department made 175,195 benefit payments, more than twice the 71,000 payments it made in the entire month of April last year.
