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Jobless Claims Spike Throughout Country As Coronavirus Pauses Business

ARI SHAPIRO, HOST:

There's been a sharp spike in the number of companies laying workers off. A lot of states say they're suddenly flooded with unemployment claims. And as NPR's Jim Zarroli reports, some are not prepared for the onslaught.

JIM ZARROLI, BYLINE: Lauren Egypt (ph) lost her job last month at a company that arranges freight shipments from China. She wasn't surprised. The coronavirus had cut a swath through her business. She didn't despair. She decided to concentrate on her side gig as an event planner, only that work has disappeared, too.

LAUREN EGYPT: And kind of in a 48-hour period, many of those contracts just kind of were eliminated, and people just started canceling events.

ZARROLI: So now she'll probably apply for unemployment insurance, joining the swelling ranks of workers who've watched a very strong job market buckle almost overnight. Eighteen percent of the people answering an NPR/Marist poll last week said someone in their household has lost a job or had their hours reduced. Joe Barela is executive director of the Colorado Department of Labor and Employment. He says with travel at a standstill, the skiing and tourism business in his state is hemorrhaging workers.

JOE BARELA: In a matter of five days, we now have these hundreds of thousands of people that - their lives were upended because their employment situation changed.

ZARROLI: Barela says there are plenty of warehouse and delivery jobs available for those who want them, and the state tries to steer unemployed people toward them. Still, many people have chosen to go online to file unemployment claims.

BARELA: Last Monday, the 9 of March, we know we had about 400 people initiate claims in the system. Yesterday morning, by 10 a.m., there were approximately 6,800 people trying to enter claims into the system.

ZARROLI: Barela says two weeks ago, it took maybe 10 minutes for callers to get through to the employment office. Now it takes an hour, and the same thing is happening all over the country. Ohio has had 78,000 people file for unemployment during the first three days of this week alone. All last week saw less than 10% of that. So many people were applying for unemployment that computers went down in New York, New Jersey and other states. Here is New Jersey Gov. Phil Murphy.

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PHIL MURPHY: We saw a record number of unemployment insurance applications; so many, in fact, that the state's system crashed.

ZARROLI: One big reason so many states are unprepared is the unprecedented nature of the downturn. Heather Boushey, president of the Washington Center for Equitable Growth, says a lot of people are able to wait out the virus by doing their jobs from home. But that's not possible for everyone.

HEATHER BOUSHEY: All those folks who have jobs that require a face-to-face contact - many jobs and services - there's no demand for that work right now. And quite frankly, it can be dangerous for folks to do those jobs.

ZARROLI: In many cities now, restaurants, schools, theaters and bars have been closed altogether. And the people who work there are suddenly finding themselves out of a job. In an interview with CNN, celebrity chef Tom Colicchio said the restaurant business is suffering.

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TOM COLICCHIO: If 75% of the restaurants get back open after this, I'd be surprised. We're looking at a massive, massive problem. This is our generation's World War II moment, and we need to rise to it.

ZARROLI: And that's only a fraction of the damage taking place right now. Every day, more and more businesses are deciding to close their doors. Today Ford and General Motors said they were suspending production throughout North America until March 30 at the earliest.

Jim Zarroli, NPR News, New York.

(SOUNDBITE OF TOSCA'S "BUSENFREUND" Transcript provided by NPR, Copyright NPR.