In the aftermath of the Great Recession, unemployment rates skyrocketed. Indiana followed national trends but hit a peak of 11 percent in January 2010, outpacing the national peak of 10 percent in October 2009.

While there have been a couple of hiccups, the unemployment rate, both in the country and in the state have declined steadily since to 3.5 percent and 3.2 percent, respectively.

But now, everything has changed.

COVID-19 has hit the United States hard since the middle of March. Once the virus gained a foothold it began to spread exponentially. With detection scarce and no vaccine available, the best guidance is to avoid contact with other people in an effort to stop the spread of the virus.

Food service, entertainment, tourism and airlines have been hit especially hard. Food service was one of the first affected as governors across the country order a halt to dine-in service. While many restaurants have switched their focus to carry-out and delivery service, business is down and staffing is low. Movie theaters, gyms, salons and many other “non-essential” businesses have been shuttered while states expanded their lock-down policies, including Indiana Governor Eric Holcomb's executive order issued March 23.

While many industries are continuing to operate, some even expanding to meet specific needs, the damage has already been done. In Indiana, weekly unemployment insurance claims have increased dramatically. A small spike of 4,626 claims at the beginning of January as seasonal workers were dismissed settled into the mid-2000s through the rest of the winter. March began with 2,015 and 2,312 the first two weeks before jumping to 53,608 claims for the third week. Claims for the fourth week released March 31 report 120,331, a jump of 6,709 percent over last year’s claims for the same week.

Unemployment agencies across the country have been overwhelmed, including in Indiana. Special policies have been established to deal with job losses resulting from COVID-19. In addition to workers subject to layoffs, workers quarantined based on the directive of their medical professional or employer will be eligible to receive unemployment benefits if they are not receiving benefit pay from their employer, as will workers who are home-caring for children while schools and daycare facilities are closed. 

Things may get worse before they get better. A study released March 19 by Ball State University's Center for Business and Economic Research estimates Indiana's unemployment rate could climb to 10 percent by early May and 14.5 percent by the end of June. CBER director Michael Hicks suggests the need for policies on both the state and federal level to alleviate stress on small businesses and households, including supplemental income such as universal basic income payments. 

On March 27, a $2 trillion dollar stimulus package passed its third and final test when it was approved by the U.S. House of Representatives. The package does include a $1,200 one time payment to most adult citizens. Considering the average total monthly cost for housing in the U.S. is $1,483, according to the U.S. Bureau of Labor Statistics, this one time payment is likely far less than what Hicks had in mind. The stimulus package sets aside $293 billion for these direct payments and $323 billion in administrative costs to execute the payments.

The stimulus package also expands unemployment payments for out of work folks across the country. Weekly payments will increase as will the eligibility for benefits, specifically gig workers, freelancers and independent contractors who are typically excluded from unemployment insurance.

Those payments are also extended with an additional 13 weeks of coverage beyond what is offered by the state and will begin immediately, waiving the standard one-week wait before receiving the first check. These benefits are estimated to account for $250 billion of the package.