‘Depression-era’ jobless rates loom in California, Newsom warns

California faces job losses and unemployment rates reminiscent of the Great Depression, Gov. Gavin Newsom said Wednesday as he revealed the state has paid out $10.6 billion in unemployment benefits to workers amid coronavirus-linked business shutdowns.

California’s hobbled economy faces “jaw-dropping” unemployment rates that could be officially revealed as soon as this month, Newsom said Wednesday during a regular briefing to discuss the state’s battle against COVID-19.

Job losses being tracked by the Employment Development Department or EDD are so severe they point to unemployment rates that could hover, however briefly, near those of the Great Depression of the 1930s, when the jobless levels were in the 25% range, according to the governor.

“These numbers are jaw-dropping,” Newsom said. “It is alarming.”

Despite the huge and fast-expanding unemployment payments made by the state, numerous workers who have lost their jobs in recent weeks remain unable to reach staffers at the employment department’s broken call center.

The state’s Employment Development Department says it has established a phone line where jobless workers can reach experts equipped to handle an individual’s unemployment claim. Still, when numerous calls were attempted this week by the (San Jose) Mercury News, including Wednesday during the official 8 a.m. to noon business hours, the answer was an automated recording that indicates the phone system is overwhelmed by customers.

“We currently are receiving more calls than we have the capacity to answer,” the automated recording said. “At the end of the message, the phone will hang up.”

The EDD’s unresponsive phone center and glitch-hobbled computer system continue to dismay applicants who cannot get through.

“It is so insane. I can’t get anybody at the EDD to talk to me about my unemployment claim,” said Claire Alexander, a Mountain View resident and fitness teacher who is out of work. “It seems so cruel to treat people this way who are so desperate.”

The $10.6 billion in jobless payments represents a 36% jump from an estimate the governor released at his May 4 briefing when he said California had paid $7.8 billion in unemployment benefits since mid-March. And it’s up 5 percent, or $500 million, from the $10.1 billion in payments the governor disclosed only Tuesday.

Similarly, the $7.8 billion figure was a 73.3% increase from the EDD’s estimate that as of the week ended April 25, the state had paid out $4.5 billion in benefits.

A major reason for the huge jumps: The state EDD on April 28 began accepting jobless claims from gig workers, self-employed people, and small business owners who suffered job losses or reduced hours as a result of business shutdowns that state and local government agencies imposed to help combat the coronavirus.

The new figures combine the standard unemployment benefit payments with the payments under the new pandemic unemployment assistance program.

Payment volumes also are rising because the additional $600 weekly payment that is being funded by the federal government amid the coronavirus business lockdowns has further swelled the EDD payout totals.

With the $600 in federal money added to the basic state EDD weekly payment, workers who normally might qualify for the maximum state payment of $450 a week would get a maximum combined payment of $1,050 on a weekly basis.

“That all contributes to the higher total benefits paid,” said Loree Levy, a spokesperson for the state EDD, referring to the new program, the regular program, and the additional $600 from the U.S. government.

As of April 30, California has borrowed $348 million from the federal government, money necessary to ensure the EDD’s benefits fund isn’t depleted. The state could borrow up to $10 billion through July from the federal government.

Unemployed workers say they continue to attempt for several hours at a time, every day, night and day, to reach the EDD at as many as four different numbers.

“Thank you for calling,” the EDD recording stated Wednesday at its 800-300-5616 number where expert assistance is available for anyone who manages to reach a real staffer.

“We are sorry we are unable to answer your call at this time.”

A moment later, the phone disconnects.