The Impact of COVID-19 on Unemployment and Health

| March 27, 2020

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Over the course of the past two weeks, daily life has become very different for most people. With school closures and recent “stay-at-home” orders across the state, every North Carolinian has been affected in some way. That is particularly true for the thousands in the state who have lost their jobs and have filed for unemployment. Many businesses are shutting their doors to customers due to orders from Governor Roy Cooper to decrease large gatherings of people and to promote social distancing. Since March 14, Governor Cooper has signed four Executive Orders related to the pandemic:

 

  • March 14 – Executive Order 117 – closure of public schools statewide; ban on mass gatherings of over 100 people
  • March 17 – Executive Order 118 – closure of restaurants and bars for dine-in services as of 5:00p.m. March 17; increased access to unemployment benefits
  • March 21 – Executive Order 119 – waiver for restrictions on child care and older adult care facilities; flexibilities for the Division of Motor Vehicles
  • March 23 – Executive Order 120 – closure of public schools statewide through May 15; ban on mass gatherings of over 50 people; closure of some businesses as of 5:00p.m., May 25 (e.g., gyms, movie theaters, hair and nail salons)

 

As a result of these events, between March 16 and March 26, there were 200,000 new unemployment claims in North Carolina, or about as many as are typically seen in an entire year. Executive Order 118 waived the one-week waiting period for receiving unemployment benefits, as well as the requirement to that applicants actively seek work to receive benefits. The Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law by President Trump on March 27 includes a supplement to unemployment benefits provided by states. Under this new legislation, individuals will be eligible for a $600 per week supplement to state benefits for four months. North Carolina’s maximum weekly benefit is $350; with the federal supplement, individuals could receive a maximum of $950 per week [1]. Individuals who qualify for this benefit include:

 

  • Anyone laid off, furloughed, or with reduced hours due to COVID-19
  • Individuals still receiving benefits from their employer, but no salary
  • Gig economy workers and freelancers
  • Individuals who have not been laid off or furloughed, but are unable to work for various reasons (including individuals diagnosed with COVID-19 or with diagnosed family members, and those who were scheduled to begin a new job but cannot because of workplace closure)

 

As confirmed cases of COVID-19 increase, and with no known date for the end of closures and social distancing, unemployment claims are expected to continue to rise. The ripple effects on the health status of thousands of unemployed North Carolinians could be significant if the pandemic causes economic slowdowns in the long term. Though unemployment is not an orthodox indicator of health, economic well-being is inextricably linked to health outcomes. Without the necessary savings to cushion against sudden unemployment, the lost source of income can push people into poverty. Loss of income poses clear financial barriers to accessing resources that protect and improve physical and mental health. Furthermore, because employer insurance is the most common form of coverage, job loss can also mean a rise in the uninsured population. For this reason, the unemployment rate was chosen as one of 21 health indicators for Healthy North Carolina 2030. Because unemployment rates are highly disparate between racial/ethnic groups, the target set for 2030 aims at reducing these disparities. As we move into this unknown future, it will be vital to address the economic impacts of COVID-19 quickly and equitably.

 

[1] Weekly benefit amount calculated by combing the last two quarters in a base period and dividing by 52, then rounding down to the next whole dollar.