New unemployment claims dropped to just over 13,400 last week, the lowest weekly total since the coronavirus pandemic triggered an economic crisis last month.

But experts say it is too early to draw conclusions from last week’s initial claims. Another spike in claims is expected when the Maine Department of Labor expands eligibility to include contractors and the self-employed as part of emergency federal legislation.

About 89,500 Mainers have filed for unemployment benefits since the week ending March 15, more than double initial claims for all of 2019, according to the Maine Department of Labor.

Roughly 13 percent of Maine’s workers have filed for unemployment in the past month.

Nationwide, about 5.2 million Americans filed for unemployment last week, about 1.4 million fewer than the previous week. In total, roughly 22 million American workers are now collecting unemployment benefits.

The actual number of people out of work nationally and in Maine is likely much higher, since some workers who do not pay taxes for unemployment insurance are currently ineligible to receive benefits, such as contractors and the self-employed. In Maine, others have been frustrated by claims stuck in limbo within the state’s overwhelmed Department of Labor.


“It is one data point in a really complicated situation,” said Michael Hillard, an economist at the University of Southern Maine. “We really won’t know where this is headed for a few more weeks.”

In normal times, last week’s claims would still be a stunning number, about two times the initial claims in the worst week of January 2009, in the depths of the Great Recession.

Experts predict the national unemployment rate will hit 20 to 30 percent by early summer, and Maine seems to be on track to match that, Hillard said.

“That is as bad as the depths of the Great Depression,” he said. “In the immediate term, things are definitely bad and we are getting solid evidence that things are bad.”

Relief to small businesses from the federal Paycheck Protection Program may have diminished another potential deluge of unemployment claims last week. The program offers forgivable loans to businesses with fewer than 500 employees to keep workers on payroll and cover some operating expenses.

On Thursday, the U.S. Small Business Administration suspended the program because it had reached the $349 billion lending cap established by Congress. So far, almost 16,200 Maine businesses have received more than $2.2 billion in relief, said Sen. Susan Collins, an architect of the program.


Collins and others are pushing for an immediate $250 billion infusion into the program to help more businesses and workers. One community bank has 300 pending applications from self-employed workers asking for about $26,000 on average, Collins said in a news release.

It also may be too early to assess the federal program’s impact, said Michael Donihue, an economics professor at Colby College. Businesses started applying for loans on April 3, and there were delays and technical issues at some lending institutions that held up applications. Some small-business owners say rules and deadlines for the loans and newly enhanced jobless benefits make it difficult to rehire workers they previously furloughed.

“It overwhelmed everybody and there was a lot of uncertainty about how it would work,” Donihue said. “I’m not sure we’ve seen the impact of the program yet because it took awhile to get up to snuff.”

The economic crisis hit public-facing businesses such as restaurants, hotels and bars earliest and hardest. More than 13,200 workers in Maine’s food services and lodging industry have filed for unemployment in the past four weeks, more than one in four people employed in that industry, according to the state’s labor department.

However, the number of claims in that industry and in entertainment and recreation has slowed considerably since last month. Almost 8,000 hotel and food service workers filed claims in the third week of March. Just 560 did so last week.

That could suggest that many companies have already laid off their workers. Most independently owned restaurants and other establishments that are still serving food for delivery and takeout are working with skeleton crews.


“That is the sector that has been the hardest hit – we have the highest numbers and rate of job losses,” said state Labor Commissioner Laura Fortman. “We are hoping that is indication that it is stabilizing, but it is too early to tell.”

Ripples of the pandemic have been felt across nearly all sectors. On Wednesday, payment-processing technology firm Wex Inc. of Portland announced a 5 percent staff reduction nationwide. The company laid off or furloughed 135 workers in Maine. Manufacturing job losses have been consistent, with more than 1,000 workers in that industry filing for unemployment every week.

Weekly unemployment data also does not capture the thousands of Mainers who are self-employed, work on contract, have exhausted benefits or cannot place a claim because they have not been employed long enough.

Maine, like many other states, has yet to implement federal changes to unemployment eligibility created by Congress last month. Those changes would allow more workers to claim benefits, but the state is still navigating how to properly document earnings and other requirements to meet federal standards.

There is no timeline for when newly eligible workers can apply, but Fortman and others predict another surge in jobless claims when the expansion takes effect.

“I think it will be similar to what we saw four weeks ago when this started evolving,” she said.


About 67,000 Mainers were self-employed in 2018, making up about 10 percent of the labor force.

The state Department of Labor struggled early on to manage the volume of claims, creating long wait times for claimants and frustration with its online filing platform. The department has since implemented an alphabetical call-in schedule scheduled daily by the first letter of each applicant’s last name and extended call-in by about three hours per day hours to 8 a.m. to 3 p.m. Monday through Friday.

The state now has 100 people handling calls, but many people are still not connecting, Fortman said.

“We sill have tens of thousand of phone calls a day,” she said. “Not everyone is going to get through – we continue to encourage people to go online to file claims.”

A lot of callers have the same questions, including whether self-employed and contract workers are eligible, and queries about how to file weekly claims, Fortman said. For many workers, this is their first experience with unemployment benefits, she added.

The department also is requiring employers to submit separation forms to confirm workers’ benefits eligibility online. The office has been inundated with paper forms mailed in by employers.


The unprecedented surge of claims could put a strain on the state’s unemployment trust fund, the pool of money used to pay out benefits. At the beginning of the crisis, Maine had about $500 million in the fund, more than enough to weather even a severe economic downturn.

But previous models did not predict historic levels of unemployment. Washington, D.C.-based think tank the Tax Foundation estimates that at the current rate benefits are being paid out, Maine’s trust fund has enough money to last nearly six months.

Fortman said she had not seen the projection and could not comment on it. The department has not conducted its own calculation, she said.

In the event the trust fund does run out, the state will be required to borrow from the federal government to meet its obligations, Fortman said. Maine was among a handful of states that did not have to borrow to cover claims during the Great Recession, she added.

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