An Overview of Ohio’s Unemployment Crisis

Ohio’s economic situation in the midst of the coronavirus pandemic continues to fluctuate, as varying numbers in unemployment cases continue despite many businesses resuming operations.

Despite current unemployment claims steadily declining, first-time applicants have continued to rise. The Ohio Department of Jobs and Family Services (ODJFS) reported 18,952 new applications filed during the week ending Oct. 3. It was the third straight week in which new unemployment applicants had increased.

Over the last 28 weeks, there have been more initial unemployment claims than the previous four years combined. Over 1.7 million Ohioans have filed for first-time benefits in 2020, whereas over 1.5 million Ohioans combined had filed before 2020.

“There is a common thing that happens during this time of year called winter workload,” said Kimberly Hall, Director of the ODJFS. “It’s when we have traditional industries that are more seasonal in nature. There will be some upticks related to that winter workload…from around now and stretches into March when industries that are outside or more impacted by seasonal changes leverage unemployment.”

Ohio’s unemployment rate has steadily declined since its initial uptick in March. Peaking at 17.6% in April, the unemployment rate now stands at 8.9% based on preliminary data for August from the U.S. Bureau of Labor Statistics. April’s rate is the highest in Ohio’s recorded history, breaking the previous record of 14% set in January 1983 during the midst of a global recession.

Of Ohio’s main industries, those in leisure and hospitality suffered the greatest losses according to the BLS. In March, the industry employed over 500,000 workers. By April, it had dropped to a little over 275,000.

The surge in unemployment and decrease in spending led to several stimulus proposals and programs designed to help not only Americans, but Ohioans inject money back into the economy.

In April, the U.S. Treasury and IRS began distributing $1200 checks to Americans to kickstart economic activity and spending that were stagnant due to coronavirus. Individuals with an adjusted gross income up to $75,000 would receive $1200, whereas married couples who filed jointly would receive $2400.

In addition, $500 would be added to the parents’ allotment for each child under 17 years old. This excludes adults 18 years or older who are claimed as dependents by their parents.

The CARES Act extended unemployment benefits to part-time workers and independent contractors, individuals who were likely ineligible for standard unemployment likely due to insufficient work history or missing the earning threshold to qualify.

Several states, including Ohio, have adopted Pandemic Unemployment Assistance (PUA) as an alternative. Ohio enacted its PUA program in May. Federal Pandemic Unemployment Compensation (FPUC) added a $600 weekly benefit to PUA, which later expired on July 25.

Michael Shields, a researcher at Policy Matters Ohio, said the FPUC benefit was in some ways better than the one-time stimulus check which was distributed in April.

“I think that it’s really vital that [FPUC] be restored. The fact that Congress let that expire is likely to exacerbate the jobless crisis we are having right now, and it will likely extend the amount of time that it takes people to get back into work,” Shields said.

People can receive benefits from PUA up to December 26, 2020. The program is set to expire at the end of the year, something Shields said could cause further problems throughout Winter.

While the program’s expiration date looms, Hall said the ODJFS’s legislative team has been keeping an eye on the program at the federal level.

“We know that Congress is aware of the expiration, and that the stimulus package and unemployment are front and center, but there are some real competing priorities right now. We’re not sure what’s going to happen there, but we do that it is a priority area of focus at the national level,” Hall said.

PUA, while continuing to support unemployed Ohioans, has had problems of its own. The ODJFS reported that as of August 31, 108,290 claimants out of 549,198 or 19.7%, had been overpaid. The department previously flagged 270,000 claims for fraudulent activity including invalid email addresses and claims addressed to deceased individuals.

As of September 23, only 57,360 claimants were overpaid through standard unemployment.

Thomas Betti, spokesperson for the ODJFS, released a statement indicating the department’s commitment to helping those who received overpaid claims.

“We understand the frustration overpayments cause during what is already a stressful time, and we are committed to doing everything we can to lessen those hardships within the bounds of state and federal law.”

However, it also indicated claimants reporting inaccurate earnings data was the culprit.

“The bulk of the overpayments are the result of inaccurate earnings information reported by the claimant. Claimants are required to report to ODJFS any earnings in the week claimed.”

Shields disagreed with the statement, saying ODJFS processors were to blame.

“I think those overpayments are mistakes on the part of ODJFS,” Shields said. “It’s not an applicant’s job to determine their eligibility for unemployment compensation. If you lose your job, then you should file for unemployment. It’s the ODJFS’s job to determine eligibility.”

“There’s also been a lot of uncertainty and confusion, which stems from a couple of things. We want to acknowledge that this crisis is on an unprecedented scale, and the ODJFS are doing what they can with limited resources. But I also think it’s true that our state legislature has not adequately prioritized funds for unemployment compensation,” Shields said.

In the absence of a new federal stimulus plan, the President authorized $44 billion from the Disaster Relief Fund for FEMA to provide grants to U.S. states and territories. This became known as Lost Wages Supplemental Payment Assistance. Ohio was approved to the program on August 26 and began distributing weekly benefits retroactive from August 1 through September 5.

It is unknown when a new stimulus plan will be passed.

April’s 17.6% unemployment rate was the highest recorded rate in state history since the 1980s. First-time applicants to unemployment continue a steady increase, while continued claims have declined.https://t.co/BJrGJbU7wh

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