Another 861,000 US workers file for unemployment as corporations exploit pandemic to restructure operations

Another 861,000 American workers filed initial claims for unemployment benefits during the week ending February 13, according to a US Labor Department report released Thursday. This was the second week in a row of rising jobless claims in February, after anemic job growth in January, indicating that chronic levels of mass unemployment will persist for an extended period under the Biden administration.

The new claims were an increase of 13,000 from the previous week’s levels, which were revised up by 55,000 from 793,000 to 848,000. The four-week moving average is 833,000, on par with levels which have persisted since last October. New claims never exceeded 700,000 per week even during the Great Recession.

Pedestrians wait in line to collect fresh produce and shelf-stable pantry items outside Barclays Center as Food Bank For New York City provides assistance to those in need due to the COVID-19 pandemic, Thursday, Sept. 10, 2020, in New York. (AP Photo/John Minchillo)

The 861,000 new claims were higher than anticipated by economists surveyed by Dow Jones and the Wall Street Journal, which had predicted the numbers would fall to 770,000.

Initial claims are a measurement of new layoffs that continue to spread throughout the economy. Last week, Chicago-based Mondelez International announced it would close a 60-year-old Nabisco factory in New Jersey, wiping out 600 jobs later this year, while Houston-based Marathon joined Shell, Mexico’s Pemex and other energy giants in slashing thousands of jobs.

According to a Congressional Budget Office report issued earlier this month, employment numbers will not return to pre-pandemic levels until 2024.

In addition to the new claims for state benefits, the Labor Department reported that in the week ending February 13 there were also 516,000 initial claims for the federal Pandemic Unemployment Assistance (PUA) program for the self-employed, gig workers and other so-called independent contractors generally disqualified from state benefits.

Continuing claims—the total number of workers who collect regular state unemployment benefits—numbered 4.5 million during the week ending February 6, double the level of a year ago. The PUA federal program has another 7,685,389 continuing claims. Four million laid off workers are also receiving a weekly $300 supplement under the Pandemic Emergency Unemployment Compensation, which expires on March 13.

All told, 18,340,161 people received benefits in all programs the week ending January 30, the Labor Department said. This is a staggering 860 percent higher than the 2,118,115 continuing claims during the same time period last year.

Many of those filing new claims are suffering their second or third job loss. A recent study by the University of Chicago and JPMorgan Chase Institute found that almost two out of every three workers who began collecting unemployment in October had previously received benefits at least one other time since April. Restaurant, hotel and hospitality workers, in particular, have been hit by repeated layoffs.

However, the Biden administration and Congress continue to stall on any relief package for tens of millions facing hunger, evictions and destitution.

While both parties voted to pump trillions of dollars into Wall Street under the CARES Act, Biden and the Democrats have continually signaled their willingness to pare down or restrict the number of people eligible for a $1,400 stimulus check and a proposed $400 supplement to jobless benefits. Last Friday, Biden expressed doubt that a proposed raise to the minimum wage would make it into the final version of the pandemic relief proposal.

While an estimated four million people collecting regular benefits are categorized as the long-term unemployed—out of work for more than 27 weeks or more—only 20 states have extended jobless benefits, the Labor Department reported. This means many of these jobless workers have run out of aid.

The official US unemployment rate, which the Bureau of Labor Statistics reported last week fell by a 0.4 percentage point to 6.3 percent in January, excludes seven million workers who have fallen out of the labor force but want a job. It also excludes the 1.9 million, who are “marginally attached” to the labor force or who have given up looking for work. What the Bureau of Labor Statistics calls the “real unemployment rate” was 11.1 percent in January, down from 11.7 percent in December.

The rush to force workers back into dangerous workplaces last summer led to increases in jobs and a fall in the official jobless rate, but employment declined by 140,000 jobs in December 2020 and flattened in January. According to the Labor Department, January job losses hit several sectors particularly hard, including leisure and hospitality (-61,000), retail trade (-38,000), transportation and warehousing (-28,000), manufacturing (-10,000) and construction (-3,000).

Layoffs have hit working class women particularly hard. The January jobs report found that 275,000 of the 346,000 workers who left the workforce in December 2020 were women, largely due to cuts in the hotel, hospitality and other sectors whose workforces are mainly women. In addition, many female workers have been forced to care for children who are learning remotely from home.

Getting children back into schools so their parents, particularly women, can go back into the factories and other workplaces to produce profit has been a central aim of the Biden administration. “We need to get the schools open,” Biden’s top economic advisor Brian Deese declared last month, “so that parents, and particularly women, who are being disproportionately hurt in this economy, can get back to work.”

Global corporations are exploiting the pandemic to implement long-planned measures to slash costs, using new labor-saving technologies to cut millions of jobs and increase the exploitation of remaining workers.

In a recent article, Jeff Bezos’ Washington Post wrote: “The coronavirus pandemic has triggered permanent shifts in how and where people work. Businesses are planning for a future where more people are working from home, traveling less for business, or replacing workers with robots. All of these modifications mean many workers will not be able to do the same job they did before the pandemic, even after much of the U.S. population gets vaccinated against the deadly virus.”

The article pointed to an upcoming McKinsey Global Institute report, previewed by the Post, which predicted that 20 percent of business travel would not return and about 20 percent of workers could end up working from home indefinitely, meaning “fewer jobs at hotels, restaurants and downtown shops, in addition to ongoing automation of office support roles and some factory jobs.”

David Autor, an economist at the Massachusetts Institute of Technology who co-wrote a report, told the Post, “Once robots are in place, we won’t go back. Once you’ve made that type of capital investment, you don’t tend to go backward.” In the report Autor wrote, “These developments were sure to happen over the longer run. But the crisis has pulled them forward in time.”

The article noted that the “vast scale of the layoffs in the economy gives executives a unique opportunity to bring in robots.” As an example, it pointed to an online pet food and supply company, Chewy, that opened its first automated fulfillment center in Archbald, Pennsylvania in October, which requires only about a third of the employees who are at the company’s other warehouses.

“During a crisis, everything is on the table. You can easily push for big changes in a company,” Andrew Chamberlain, chief economist at Glassdoor, told the Post. “When you rebuild, you have a chance to rethink your workforce.”

Before the pandemic, McKinsey predicted that 37 million US workers would be displaced by automation this decade; but its new post-pandemic scenario increases that number to 45 million. Summing up the report’s findings, Fortune wrote, “the post-pandemic outlook for low-wage workers has become significantly worse than it was before the pandemic. The effect is so large that it’s a looming problem not just for those workers, but also for the larger society and the economy,” Fortune worriedly noted.

Left unsaid by the publishers of the annual Fortune 500 list of billionaires is that the acceleration of social inequality, after the enrichment of the pandemic profiteers who benefited from mass death, will also accelerate the resistance and radicalization of the working class.