Decline in Unemployment Claims Provides 'Very Little Solace' for Md.'s Small-Business Owners

COLUMBIA, Md. (May 1, 2020)—The number of new unemployment claims filed in Maryland dropped each week in April but the downward trend is of little comfort to the state's small-business owners as the reopening of the state remains uncertain.

"I think it's very little solace for small-business owners—particularly for those that are self-employed, independent contractors, gig workers that are now newly eligible for unemployment benefits," Mike O'Hallaron, state director of the National Federation of Independent Business told in a phone interview on Friday. "And I know the administration is doing everything they can to rectify the IT issues they've been having with their contractor and with the system. But the fact remains is that even with these lower numbers, this is still the greatest crisis facing the business community since the Great Depression."

"So, while yes, the numbers are trending downward, it's very little solace to our employers that are very anxious to get back to work so they can get their employees off those long waiting lines —just to file their claims."

O'Halloran said the state has treated some small businesses better than others during the pandemic and that that is not fair.

"We still don't understand, why, for instance, a liquor store can offer curbside but your Main Street retail shop cannot. Obviously, the sort of best practices, the safety protocols…those best practices are already being instituted. So, why then, have winners and losers been picked? So, we would suggest that curbside pickup can begin right now."

During the week that ended on April 25, 37,225 initial claims were filed, according to the Maryland Department of Labor. The state introduced a new one-stop filing system called Beacon on April 24 due to complaints related to a backlog in claims and excessive wait times before being able to file. During the week that ended on April 18, 47,545 new claims were filed. During the week that ended on April 11, 61,770 new claims were filed and during the week that ended on April 4, 108,508 claims were filed.

Frederick County Chamber of Commerce President and CEO Rick Weldon said the decline may be due to ongoing technical issues with the department's Division of Unemployment website.

"I'm hopeful that the downward trend continues, but I'm a little worried that reductions in applications might also reflect some level of frustration with the enrollment system itself. The structural issues with the website and software have been widely acknowledged, including a recent honest assessment by Governor Hogan himself."

However, Weldon said the longer Gov. Larry Hogan's stay-at-home order remains in effect, the more claims are likely to be filed.

"The obvious worry is that continuing the shelter requirement into May means more employers face serious cash/income shortages, leading to future layoffs and more enrollments."

Hogan issued executive orders closing bars, restaurants, theaters and gyms effective March 16. He issued a stay-at-home order for Marylanders on March 30. Both orders are still in effect and do not have a projected end date although Hogan has said the state could be ready to begin to reopen in the next few weeks if certain criteria are met. Over 30 million claims were filed in the U.S. during the past six weeks, according to the U.S. Department of Labor.

Maryland Chamber of Commerce President and CEO Christine Ross said the latest unemployment numbers were "largely anticipated and indicative of the massive economic impact of the COVID 19 pandemic."

Ross elaborated on that point.

"There are many variables that may have contributed to the data that was reported. While I am not in a position to comment on the specifics, what I do know is that Maryland's employers are eager to put people back to work. Maryland's business leaders are busy preparing for what reopening our economy will look like so that we can get people back to work as expeditiously as possible once given the go-ahead."

Senate President Bill Ferguson said in a statement on Friday that his office has been "inundated with constituent case work from too many residents who are unable to access the unemployment insurance benefits they are entitled to." Ferguson said the Beacon system has "fallen well-short of what was promised." Ferguson said he will continue to urge the Department of Labor to fix the glitches in the system.

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