BOSTON — The state is bracing for a tsunami of unemployment claims from laid-off workers, which is raising questions about the solvency of the state's unemployment trust fund.

Tens of thousands of workers have filed for unemployment benefits as the state forces a wide swath of industries to shut down to prevent the spread of coronavirus.

While the latest numbers won't be available until today, the state received twice as many new jobless claims last week as were filed during the worst month of the Great Recession, according to the Executive Office of Labor and Workforce Development.

Nearly 20,000 unemployment claims were filed in a single day, the agency said.

Experts say the number of people made jobless as a result of state and federal responses to the coronavirus will be unprecedented in American history.

"We're about to get hit with a tsunami," said Greg Sullivan, research director at the Pioneer Institute, a Boston-based think tank. "The number of unemployment claims are going to be twice as high as the previous economic recession, and it's going to overwhelm most states."

The financial firm Goldman Sachs estimates there will be more than 2.5 million new jobless claims filed nationwide as a result of the pandemic.

Gov. Charlie Baker said this week there is enough money in the state's unemployment trust fund "for the time being," but he said his administration is crunching numbers to ensure that it remains solvent.

As of Jan. 31, Massachusetts had about $1.74 billion in the fund, according to the U.S. Department of Labor's unemployment insurance division.

Baker said he expects the numbers of unemployed to skyrocket following a state of emergency and other preventive steps that have shuttered many businesses. He said the actions are crucial to stopping the spread of the deadly virus and preventing the state's health care system from becoming overwhelmed with infected patients.

Staying solvent

Business leaders say the state needs to ensure there is enough money in the trust fund to sustain eligible workers through the crisis.

"The issue of solvency is paramount with the unemployment insurance fund," said Chris Geehern, executive vice president of Associated Industries of Massachusetts, a pro-business trade group. "The breadth of economic disruption at this point is significant, and that points to a heavy demand on the system."

Massachusetts isn't alone when it comes to concerns about the solvency of its unemployment trust fund.

More than half of all state unemployment insurance trust funds don’t have enough money in them to weather a major economic downturn, according to the most recent U.S. Labor Department report on the funds. Unemployment funds in two dozen states, including Massachusetts, don't meet the minimum solvency level recommended by the federal government.

During the last recession, unemployment insurance funds were hammered as a huge number of claims depleted balances. Nationally, payments to the unemployed went from $30.5 billion in 2006 to $75.8 billion in 2009, according to labor statistics, forcing many states to borrow from the federal government or the bond market.

Last week, President Donald Trump signed legislation allowing states to receive zero-interest loans from the federal government to keep unemployment trust funds solvent.

Sullivan said states will be forced to borrow billions of dollars to cover those payments, adding to their debt. He said the federal government should consider making grants to help states weather the fallout from the coronavirus, instead of zero-interest loans. 

"Otherwise, the states, and Massachusetts in particular, are going to be burdened with a gigantic ongoing bill that we will have to pay for ourselves," he said.

Rainy day fund

Sullivan said the Legislature and Baker have been good about building up the state's reserve, or "rainy day" funds, which stands at more than $3.45 billion. That makes the state better prepared to survive a major economic downturn.

The downside is that the Legislature hasn't been putting enough surplus into the unemployment fund, he said.

Massachusetts is "one of the most generous states" when it comes to unemployment benefits, he said, but the trust fund hasn't been fully solvent since 2000.

"About 57% of our employees are eligible for unemployment," Sullivan said. "Our system is based on allowing a large percentage of people to qualify."

As part of its coronavirus response, the Baker administration eased some of the state's unemployment regulations to make it easier for laid-off workers to receive benefits.

Last week, Baker signed a bill that eliminated a one-week waiting period for laid-off workers to file for benefits.

Meanwhile, lawmakers have filed legislation to expand the number of people eligible to claim unemployment and extend the number of weeks they can receive benefits.

Unemployment benefits in Massachusetts are capped at 30 weeks, though most people only qualify for 26 weeks.

Rep. Linda Campbell, D-Methuen, suggests the state may be forced to tap into reserve funds to maintain the solvency of the unemployment trust and cover payments to those out of work.

"Even if the federal government sends us money, it's going to take awhile to get here," she said. "We need to make sure people are getting the help they need."

For more information about filing unemployment claims, visit:

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites.


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