Alaska unemployment claims skyrocket after coronavirus shuts down restaurants

Some businesses have closed to the public due to concerns about the spread of coronavirus. The result is a surge in unemployment claims statewide. Others, like the business pictured — Devil’s Club Brewing — are still open but suggesting that patrons take their food and beer to-go as they cannot dine-in. (Photo by Adelyn Baxter/KTOO)

The number of Alaska workers applying for unemployment insurance exploded in the days after elected officials ordered restaurant and bar closures around the state to prevent the spread of the coronavirus, according to preliminary figures from Gov. Mike Dunleavy’s administration.

Last week, people opened 687 new claims with the Alaska Department of Labor and Workforce Development. In the first five days of this week there were 4,046 new claims, Lennon Weller, an economist with the agency, said in an email Thursday.

That’s a more than seven-fold increase in the rate of applications, if they continue at the same pace through the end of the week.

The state’s unemployment insurance trust fund has roughly $500 million and is considered “fully solvent,” Weller said.

“We are in a rather good position to handle a significant increase in claims,” he said.

Nationally, the number of new unemployment claims has already started surging amid the coronavirus pandemic. The U.S. Department of Labor said there was an increase of 70,000 — or some 30% — in new unemployment claims during the second week of March. Some states have been reporting increases of more than 1,000%.

notice on the state labor department’s website noted that the full economic impact of the coronavirus won’t be clear until mid-April, when March’s employment figures come out. Those will be the first to account for state and local closures.

Workers who lose their jobs are eligible for weekly payments ranging from $56 to $370, based on previous earnings, if they are unable to work, plus $25 a week in additional payments for up to three dependents.

A new bill passed by the Alaska House of Representatives on Thursday would bump that payment to $75 for each dependent, and remove the cap on the total number of dependents. The bill, if passed by the Senate, would also add three new reasons that someone could qualify for unemployment benefits. Those are:

  • For providing care, including medical care, to one or more persons.
  • For preventing or limiting the spread of COVID-19.
  • For preventing or limiting economic loss or harm.

Those new rules would include parents who are forced to stop working to stay at home to provide childcare while schools are canceled.

“Those individuals where their employer says, ‘you have to go home, you have to quarantine yourself for 14 days,’ we want to be able to pay those individuals unemployment insurance benefits while they’re home on that quarantine,” said Westcott, speaking telephonically at a Senate Finance Committee meeting on Thursday, “Or the parent who isn’t able to work right now because the schools are closed. Currently, under current unemployment insurance laws, we can’t help those parents out during that time, so that’s exactly what this legislation seeks to do.”

The legislation would also waive the one-week waiting period for workers from the time of their application to receiving benefits.

The bill comes on the heels of the U.S. Department of Labor’s new guidance for states announced last week for administering unemployment insurance to workers who have been laid off, quarantined, or leave their jobs to avoid infection or care for a family member.

Editor’s note: The caption of the photo has been updated to reflect that while some businesses have closed entirely others, like Devil’s Club Brewery, are still open but have had to change the way they operate. Devil’s Club is still open, but is suggesting take-out of the items on its menu. 

Alaska Public Media

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