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The Honolulu Advertiser
Posted on: Friday, April 11, 2008

JOBLESS CLAIMS RISE
Jobless claims jump 132.7%

By Curtis Lum
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Despite a big increase in people filing for unemployment benefits — the result of recent airline layoffs — this Downtown unemployment office is nearly deserted. Most people file for benefits by phone.

JEFF WIDENER | The Honolulu Advertiser

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The state yesterday reported a triple-digit increase in unemployment claims filed last week, fueled primarily by the shutdown of Aloha Airlines and ATA.

For the week ending April 5, 2,669 people filed for unemployment compensation, a 132.7 percent jump from the same period last year, according to the Department of Labor and Industrial Relations. About 1,500 of those claims were filed by former Aloha employees and another 31 by ATA workers, the state said.

Nearly 2,100 people lost their jobs when Aloha ended its operations March 31 and ATA shut down two days later.

Despite the flurry of unemployment insurance claims being filed there were no long lines at the unemployment office because the filing process can be done over the phone.

James Hardway, labor department spokesman, said the number of unemployment claims did not come as a surprise.

"It's generally where we expected it to be, given the size of Aloha Air," he said. "I imagine that there will be a few more that will still be coming in. But we're waiting to see how the results of (Wednesday's) job fair go and how quickly our other industries are able to absorb those laid off from Aloha and ATA."

The large number of laid-off airline employees is expected to affect the state's unemployment rate, which has been creeping up for the past four months and hit a four-year high of 3.2 percent in February on a seasonally adjusted basis. The Department of Business Economic Development and Tourism this week projected that the unemployment rate could reach 3.9 percent as a result of the job losses relating to Aloha and ATA.

The DBEDT report said that the ripple effect of the airlines' closures could lead to another 2,050 indirect job losses. These are air-service positions that are directly affected by the shutdown.

The state also estimates that 1,770 more jobs at companies supported by Aloha and ATA purchases are "at risk."

The sudden increase in unemployment compensation claims also will make a dent in the state's unemployment insurance fund. But Hardway said the fund is capitalized at a "healthy" $560 million and can withstand even the worst-case scenario of all 2,100 claimants collecting the maximum amount in benefits.

Hardway said a claimant can collect up to $523 a week in unemployment benefits for 26 weeks. At that rate, if every former employee claimed the maximum amount, the fund would drop to $391 million, still well above the "adequate reserve" level of $255 million, he said.

"I don't think anyone believes that everyone from Aloha Air is going to collect for 26 weeks," Hardway said. "We know this because the average duration for unemployment is only 14 weeks and the actual average amount that is paid out is $420."

Reach Curtis Lum at culum@honoluluadvertiser.com.