President Biden inherits a weak labor market due to inadequate COVID-19 response: Biden and Congress must make stimulus its first priority

Posted January 21, 2021 at 10:10 am by Heidi Shierholz

President Biden inherits a weak labor market due to inadequate COVID-19 response: Biden and Congress must make stimulus its first priority

This morning, the Department of Labor (DOL) released some of the last unemployment insurance (UI) claims data of the Trump era. That means this release helps us understand the economy President Biden just inherited. Here’s what it shows.

Another 1.3 million people applied for UI benefits last week, including 900,000 people who applied for regular state UI and 424,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.3 million who applied for UI last week was an increase of 113,000 from the prior week. The increase underscores that layoffs are increasing as the virus surges. The four-week moving average of total initial claims is now back to where it was in mid-October.

Last week was the 44th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were still greater than the worst week of the Great Recession.) I should note that throughout this post I use seasonally adjusted data where I can, but for comparisons to the Great Recession I use not-seasonally-adjusted data, since DOL’s improved seasonal adjustments aren’t available before the week ending August 29, 2020.

Most states provide just 26 weeks of regular benefits, so many workers are exhausting their regular state UI benefits. In the most recent data (the week ending January 9), continuing claims for regular state benefits dropped by 127,000. After a worker exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 24 weeks of regular state UI (the December COVID-19 relief bill increased the number of weeks of PEUC eligibility by 11, from 13 to 24).

However, in the most recent data available for PEUC, the week ending January 2nd, PEUC claims dropped by 1.1 million. I expect that to reverse in coming weeks. Why? Over 3.5 million people had exhausted the original 13 weeks of PEUC by the end of December (see column C43 in form ETA 5159 for PEUC here). These workers are eligible for the additional 11 weeks, but they need to recertify. PEUC numbers will swell dramatically as this occurs. It’s worth noting that in some states, if workers had exhausted their original 13 weeks of PEUC, they could get on yet another program, Extended Benefits (EB). In the latest data, the number of workers on EB increased by 83,000. Workers on EB will stay on EB until they exhaust their EB benefits before switching back to PEUC for the additional 11 weeks of PEUC eligibility.

Continuing claims for PUA also dropped dramatically—by 1.7 million—in the latest data, the week ending January 2nd. This drop can also be expected to reverse in coming weeks. The December COVID-19 relief bill extended the total weeks of eligibility for PUA by 11, from 39 to 50 weeks. As workers who saw a temporary lapse in PUA get back on the program, we can expect the PUA numbers to swell.

The 11-week extensions of PEUC and PUA just kick the can down the road—they are not long enough. Congress must provide longer extensions, or millions will exhaust benefits in mid-March, when the virus will still be surging and the labor market will still be weak.

Figure A shows continuing claims in all programs over time (the latest data are for January 2nd). Continuing claims are still nearly 14 million above where they were a year ago, even with recent the temporary lapses in PUA and PEUC occurring during the time period covered by this chart.

Figure A

Continuing unemployment claims in all programs, March 23, 2019–January 2, 2020: Use caution interpreting trends over time because of reporting issues (see below)

Date	Regular state UI	PEUC	PUA	Other programs (mostly EB and STC)
2019-03-23	1,905,627			31,510
2019-03-30	1,858,954			31,446
2019-04-06	1,727,261			30,454
2019-04-13	1,700,689			30,404
2019-04-20	1,645,387			28,281
2019-04-27	1,630,382			29,795
2019-05-04	1,536,652			27,937
2019-05-11	1,540,486			28,727
2019-05-18	1,506,501			27,949
2019-05-25	1,519,345			26,263
2019-06-01	1,535,572			26,905
2019-06-08	1,520,520			25,694
2019-06-15	1,556,252			26,057
2019-06-22	1,586,714			25,409
2019-06-29	1,608,769			23,926
2019-07-06	1,700,329			25,630
2019-07-13	1,694,876			27,169
2019-07-20	1,676,883			30,390
2019-07-27	1,662,427			28,319
2019-08-03	1,676,979			27,403
2019-08-10	1,616,985			27,330
2019-08-17	1,613,394			26,234
2019-08-24	1,564,203			27,253
2019-08-31	1,473,997			25,003
2019-09-07	1,462,776			25,909
2019-09-14	1,397,267			26,699
2019-09-21	1,380,668			26,641
2019-09-28	1,390,061			25,460
2019-10-05	1,366,978			26,977
2019-10-12	1,384,208			27,501
2019-10-19	1,416,816			28,088
2019-10-26	1,420,918			28,576
2019-11-02	1,447,411			29,080
2019-11-09	1,457,789			30,024
2019-11-16	1,541,860			31,593
2019-11-23	1,505,742			29,499
2019-11-30	1,752,141			30,315
2019-12-07	1,725,237			32,895
2019-12-14	1,796,247			31,893
2019-12-21	1,773,949			29,888
2019-12-28	2,143,802			32,517
2020-01-04	2,245,684			32,520
2020-01-11	2,137,910			33,882
2020-01-18	2,075,857			32,625
2020-01-25	2,148,764			35,828
2020-02-01	2,084,204			33,884
2020-02-08	2,095,001			35,605
2020-02-15	2,057,774			34,683
2020-02-22	2,101,301			35,440
2020-02-29	2,054,129			33,053
2020-03-07	1,973,560			32,803
2020-03-14	2,071,070			34,149
2020-03-21	3,410,969			36,758
2020-03-28	8,158,043	0	52,494	48,963
2020-04-04	12,444,309	3,802	69,537	64,201
2020-04-11	16,249,334	31,426	216,481	89,915
2020-04-18	17,756,054	63,720	1,172,238	116,162
2020-04-25	21,723,230	91,724	3,629,986	158,031
2020-05-02	20,823,294	173,760	6,361,532	175,289
2020-05-09	22,725,217	252,257	8,120,137	216,576
2020-05-16	18,791,926	252,952	11,281,930	226,164
2020-05-23	19,022,578	546,065	10,010,509	247,595
2020-05-30	18,548,442	1,121,306	9,597,884	259,499
2020-06-06	18,330,293	885,802	11,359,389	325,282
2020-06-13	17,552,371	783,999	13,093,382	336,537
2020-06-20	17,316,689	867,675	14,203,555	392,042
2020-06-27	16,410,059	956,849	12,308,450	373,841
2020-07-04	17,188,908	964,744	13,549,797	495,296
2020-07-11	16,221,070	1,016,882	13,326,206	513,141
2020-07-18	16,691,210	1,122,677	13,259,954	518,584
2020-07-25	15,700,971	1,193,198	10,984,864	609,328
2020-08-01	15,112,240	1,262,021	11,504,089	433,416
2020-08-08	14,098,536	1,376,738	11,221,790	549,603
2020-08-15	13,792,016	1,381,317	13,841,939	469,028
2020-08-22	13,067,660	1,434,638	15,164,498	523,430
2020-08-29	13,283,721	1,547,611	14,786,785	490,514
2020-09-05	12,373,201	1,630,711	11,808,368	529,220
2020-09-12	12,363,489	1,832,754	12,153,925	510,610
2020-09-19	11,561,158	1,989,499	10,686,922	589,652
2020-09-26	10,172,332	2,824,685	10,978,217	579,582
2020-10-03	8,952,580	3,334,878	10,450,384	668,691
2020-10-10	8,038,175	3,711,089	10,622,725	615,066
2020-10-17	7,436,321	3,983,613	9,332,610	778,746
2020-10-24	6,837,941	4,143,389	9,433,127	746,403
2020-10-31	6,452,002	4,376,847	8,681,647	806,430
2020-11-07	6,037,690	4,509,284	9,147,753	757,496
2020-11-14	5,890,220	4,569,016	8,869,502	834,740
2020-11-21	5,213,781	4,532,876	8,555,763	741,078
2020-11-28	5,766,130	4,801,408	9,244,556	834,685
2020-12-05	5,457,941	4,793,230	9,271,112	841,463
2020-12-12	5,393,839	4,810,334	8,453,940	937,972
2020-12-19	5,205,841	4,491,413	8,383,387	1,070,810
2020-12-26	5,347,440	4,166,261	7,442,888	1,450,438
2021-01-02	5,733,436	3,026,952	5,707,397	1,526,734

ChartData Download data

Caution: Trends over time in PUA claims may be distorted because when an individual is owed retroactive payments, some states report all retroactive PUA claims during the week the individual received their payment.

Click here for notes.

Source: U.S. Employment and Training Administration, Initial Claims [ICSA], retrieved from Department of Labor (DOL), https://oui.doleta.gov/unemploy/docs/persons.xls and https://www.dol.gov/ui/data.pdf, January 21, 2021.

There are now 26.8 million workers who are either unemployed, otherwise out of work because of the virus, or have seen a drop in hours and pay because of the pandemic. Further, we started losing jobs again in December; layoffs are rising and the virus is surging. More relief is desperately needed. A key reason more relief is so important is that this crisis is greatly exacerbating racial inequality. Due to the impact of historic and current systemic racism, Black and Latinx workers have seen more job loss in this pandemic, and have less wealth to fall back on. To get the economy back on track in a reasonable timeframe, we need policymakers to pass an additional roughly $2 trillion in fiscal support. In particular, it is crucial that Congress provide substantial aid to state and local governments. Without this aid, austerity by state and local governments will result in cuts to essential public services and the loss of millions of jobs in both the public and private sector.

President Biden announced a relief and recovery package last week that gets the economics right; his proposal is at the scale of the economic challenge we are facing and is a clear break from the mistakes we have made in past recoveries, when we hobbled the economy by not doing enough. And with their new majority in the Senate, Democrats will now be able to get more relief measures through reconciliation. Top priorities are aid to state and local governments, additional weeks of UI, and increased UI benefits.

Posted January 18, 2021 at 12:14 pm by Krista Faries

Martin Luther King called for leaders with ‘sound integrity’

Two weeks ago, the 117th Congress was sworn in. In two days, Joseph R. Biden Jr. will take the oath of office and become the 46th president of the United States. Between these two pivotal moments, with our nation’s leaders entering office during turbulent times, it is fitting to reflect on what Rev. Dr. Martin Luther King Jr.—a leader among leaders, whose legacy we celebrate today—had to say about leadership.

Tagged Race and Ethnicity Poor People's Campaign

Posted January 14, 2021 at 7:08 pm by Josh Bivens

The U.S. economy could use some ‘overheating’: Biden’s relief and recovery plan meets the scale of the economic crisis

Key takeaways:

President-elect Biden’s recently announced relief and recovery plan is highly unlikely to cause economic “overheating”—and it would be a sign of its success if it did.
Economic “overheating” generally means large and prolonged increase in inflation and/or interest rates, but the U.S. economy has run far “too cold” for decades, largely due to the enormous rise in income inequality redistributing income to richer households that save most of their income. Unless inequality is substantially reversed, economic overheating is highly unlikely.
Even when the unemployment rate was 3.7% in 2019, there was no sign at all of economic overheating. Any relief and recovery plan would have to push the unemployment far beneath this for an extended period of time before any real overheating could happen.
Common metrics that deficit hawks often point to as evidence of economic overheating are not convincing.
- The debt service burden is actually historically low in recent years due to the too-cold economy of recent decades.
- The overall ratio of federal debt to GDP would actually likely be lower years from now if Congress passed the Biden plan, because such plans would increase GDP.

Recent proposals for large-scale fiscal relief and recovery from the economic effects of COVID-19 have drawn criticism that they could lead to “overheating” of the U.S. economy. These criticisms should be ignored. Proposals under discussion—including Biden’s economic plan introduced tonight—are highly unlikely to lead to any durable uptick in inflation or interest rates (the normal indicators of “overheating”) and even if they did, these higher interest rates and inflation would be a welcome sign of economic healing, not something to worry about.

Tagged Budget, Taxes, and Public Investment Coronavirus

Posted January 14, 2021 at 10:18 am by Heidi Shierholz

Unemployment claims increase as COVID-19 surges

Another 1.2 million people applied for Unemployment Insurance (UI) benefits last week, including 965,000 people who applied for regular state UI and 284,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.2 million who applied for UI last week was an increase of 304,000 from the prior week. The increase was due in part to data volatility during a messy time for UI data—the holidays, the President delaying signing the relief bill until the day after the pandemic programs expired—but the 181,000 rise in seasonally adjusted regular state claims suggests layoffs are increasing as the COVID-19 pandemic surges.

Last week was the 43rd straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were still greater than the worst week of the Great Recession.)

Most states provide just 26 weeks of regular benefits, so many workers are exhausting their regular state UI benefits. In the most recent data, however, continuing claims for regular state UI rose by 199,000, meaning new continuing claims were outpacing exhaustions. After an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 24 weeks of regular state UI (the December COVID-19 relief bill increased the number of weeks of PEUC eligibility by 11, from 13 to 24).

Tagged Unemployment insurance

Posted January 13, 2021 at 5:28 pm by David Cooper and Krista Faries

Twenty states raised their minimum wages on New Year’s Day: Federal action is still needed

On January 1, minimum wages went up in 20 states. The increases range from an $0.08 inflation adjustment in Minnesota to a $1.50 per hour raise in New Mexico, the equivalent of an annual increase ranging from $166 to $3,120 for a full-time, full-year minimum wage worker. The updates can be viewed in EPI’s interactive Minimum Wage Tracker and in Figure A and Table 1 below.

In prior years, we have estimated the number of workers who would directly benefit from these increases, as well as the total dollar amount and average wage increase for affected workers in each state. Unfortunately, current circumstances make it difficult to accurately produce estimates of this year’s increases. The COVID-19 pandemic has devastated labor markets throughout the country, with a large share of the job losses occurring in low-wage sectors, such as leisure and hospitality, where minimum wage hikes typically affect large shares of workers. Because conditions in these industries are so different from what they were in the period reflected in our model’s underlying data, we cannot use it to make estimations about effects happening right at this moment.

Even so, we know that minimum wage increases are as crucial as ever in the current context—to protect low-wage workers from exploitation and continue toward the goal of a living wage for all workers. From a macroeconomic perspective, it’s smart policy: Low-wage households—who disproportionately benefit from increases to the minimum wage—are highly likely to quickly spend the extra dollars they receive, boosting consumer demand as we move into recovery.

Tagged Minimum wage Tipped Minimum Wage

Posted January 13, 2021 at 2:39 pm by Margaret Poydock, Celine McNicholas, and Julia Wolfe

The Trump administration finalizes rule attacking federal workers’ right to union representation in workplace discrimination cases

In his final weeks in office, the Trump administration continues to attack federal workers’ right to union representation. Last week, the Equal Employment Opportunity Commission (EEOC) voted to finalize a rule that prohibits union representatives from using official time—which is paid work time representatives use for union activities—to represent their coworkers in equal employment opportunity (EEO) matters, overturning almost 50 years of precedent. By prohibiting union representatives from using official time during EEO matters, the final rule effectively limits the right of federal workers to choose their representative in the EEO complaint process.

The rule also creates enormous cost burdens for federal workers who want to file a workplace discrimination complaint. By prohibiting the use of official time in discrimination complaints, federal workers are faced with the choice of hiring a private attorney or asking an inexperienced coworker to be their representative on their own free time. The cost of an attorney will be too costly for many vulnerable federal workers, and between the choices of hiring an attorney, asking an inexperienced coworker to be a representative, or not filing at all, many will forgo exercising their rights.

This is only one of many ways the Trump administration has attacked federal workers’ unions. During his first year, President Trump issued three executive orders eroding the collective bargaining rights of federal workers. These orders shortened the timeframe expected to complete bargaining and directed agencies not to bargain over certain topics, limited the use of official time for collective bargaining activities, and weakened due process protections for federal workers subject to discipline. In October 2019, Trump signed an executive order revoking an executive order issued by former President Obama that gave employees of federal contractors the right of first refusal for employment on a new contract when a federal service contract changes hand.

Tagged Unions and Labor Standards Black Americans Latinx Americans Asian Americans

Posted January 8, 2021 at 11:51 am by Heidi Shierholz

The economy President-elect Biden is inheriting: 26.8 million workers—15.8% of the workforce—are being directly hurt by the coronavirus crisis

We now have a full year of jobs data for 2020. This is an important moment to take stock of where things stand in the labor market.

The official unemployment rate was 6.7% in December, and the official number of unemployed workers was 10.7 million, according to the Bureau of Labor Statistics (BLS). These official numbers are a vast undercount of the number of workers being harmed by the weak labor market, however. In fact, 26.8 million workers—15.8% of the workforce—are either unemployed, otherwise out of work due to the pandemic, or employed but experiencing a drop in hours and pay. Here are the missing factors:

Some workers are being misclassified as “employed, not at work” instead of unemployed. BLS has discussed at length that there have been many workers who have been misclassified as “employed, not at work” during this pandemic who should be classified as “temporarily unemployed.” In December, there were 1.0 million such workers, a substantial increase from November. (Wonky aside: Some of these workers may not have had the option of being classified as “temporarily unemployed,” meaning they weren’t technically misclassified, but all of them were out of work because of the virus.) Accounting for these workers, the unemployment rate would be 7.3%.

Tagged Unemployment insurance Jobs Unemployment Jobs and Unemployment Coronavirus

Posted January 7, 2021 at 4:28 pm by Kirstyn Flood

How to organize in the anti-union South

Amy Waters, RN, CPN, at Mission Hospital in Asheville, NC, detailed her story of a successful union drive as a member of National Nurses United at EPI’s panel discussion, “Rebuilding Collective Bargaining Back Better.”

“We are now the first private hospital in North Carolina with a union and we are the largest newly formed union in the South, since, I believe, the 1970s,” says Waters.

Tagged Health Unions and Labor Standards Coronavirus

Posted January 7, 2021 at 4:28 pm by Kirstyn Flood

Teaching at the intersection of social-justice activism and education

Jesse Hagopian, teacher and co-adviser of the Black Student Union at Garfield High School in Seattle, WA, spoke about the intersection of social-justice unionism and the Black Lives Matter at School movement at EPI’s book event, “Strike for the Common Good: Fighting for the Future of Public Education.”

“I think the fundamental problem with our education system is this fundamental problem we have with all of our systems and institutions in this country, and that is that they’re a product of an economic and political structure that is built on profit, racism, oppression, and inequality—namely capitalism,” says Hagopian.

Tagged Education Educational inequity Unions and Labor Standards Black Americans

Posted January 7, 2021 at 3:41 pm by Elise Gould

What to watch on jobs day: Little to no improvement in December and huge losses over 2020

Jobs day on Friday will not only give us a read on the labor market for December, but it will also give us a sense of the devastating economy of 2020 and the economy President-elect Biden is walking into. Overall job growth for December will likely continue to trend toward zero, with some chance of employment actually falling. At the same time, rising COVID-19 caseloads, hospitalizations, and deaths means our health and economic woes are far from over. President-elect Biden is inheriting an exceedingly troubled economy with millions of families just trying to stay afloat. Over the Trump administration’s term, more jobs were lost than gained—there are 541,000 fewer jobs in the U.S. economy than when he took office in January 2016. And not only does President-elect Biden enter his first term in a disastrous economy, he also inherits a litany of anti-worker policy decisions from his predecessor who squandered the labor market strength he inherited.

The figure below provides a decent picture of the employment situation over the last year. In January and February, we saw solid job growth with gains of 214,000 and 251,000, respectively. After COVID-19 hit, federal legislation expanded unemployment insurance, increasing both eligibility and weekly payments, making it financially viable for millions of workers to safely stay home while public health officials assessed the situation. However, businesses that were shuttered in the interest of public health received insufficient federal economic support to keep paying their workers even as they remained safely at home. The U.S. economy experienced losses in March and April of 1.4 million and 20.8 million jobs, respectively, losses the likes of which we hadn’t experienced in modern history. Millions were on temporary layoff and once states started opening back up, some of those were rehired. We saw a significant bounce back in May and June with 2.7 million and 4.9 million jobs added, respectively. Unfortunately, over the succeeding five months, job growth has rapidly slowed as federal relief expired and the virus surged: 1.8 million in July down to 1.5 million in August then 711,000, 610,000, and a paltry 245,000 in November. December looks to continue the trend with low (or even negative) job growth expected.

Tagged Jobs Jobs and Unemployment Coronavirus

Posted January 7, 2021 at 10:36 am by Heidi Shierholz

First UI claims of 2021 are still higher than the worst of the Great Recession

There was an armed insurrection at the U.S. Capitol yesterday in which the police were complicit in a way that has everything to do with structural racism. Structural racism has also meant that Black and Latinx working people are experiencing a disproportionate health and economic impact of the COVID-19 pandemic. The UI data released this morning show a labor market in turmoil as COVID-19 surges.

Another 948,000 people applied for Unemployment Insurance (UI) benefits last week, including 787,000 people who applied for regular state UI and 161,000 who applied for Pandemic Unemployment Assistance (PUA). The 948,000 who applied for UI last week was a decrease of 152,000 from the prior week. That drop was driven almost entirely by a drop in PUA claims, undoubtedly due to uncertainty over whether PUA would be extended, as Trump delayed signing the relief bill during that week. Now that the program has been extended (more on that below), I expect PUA claims to rise again in coming weeks.

Last week was the 42nd straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were greater than the second-worst week of the Great Recession.)

Tagged Unemployment insurance Jobs and Unemployment Coronavirus

Posted December 17, 2020 at 10:09 am by Heidi Shierholz

Unemployment insurance claims continue to climb: Congress must pass a stimulus package to prevent millions of people from being left with nothing

Another 1.3 million people applied for Unemployment Insurance (UI) benefits last week, including 885,000 people who applied for regular state UI and 455,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.3 million who applied for UI last week was an increase of 63,000 from the prior week. This was the second week in a row of increases, and initial claims are now back to their highest point since September. Layoffs are rising as the COVID-19 virus surges and demand weakens. And, last week was the 39th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were greater than the second-worst week of the Great Recession.)

Most states provide 26 weeks (six months) of regular benefits. Given the length of this crisis, many workers have exhausted their regular state UI benefits. In the most recent data, continuing claims for regular state UI dropped by 273,000. For now, after an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of regular state UI. However, PEUC is not rising as fast as continuing claims for regular state UI are dropping. Why? Many of the roughly 2 million workers who were on UI before the recession began, or who are in states with less than the standard 26 weeks of regular state benefits, are now exhausting PEUC benefits, at the same time others are taking it up. The Department of Labor reports that nearly 2 million workers have exhausted PEUC so far—and that is a vast undercount because many states have not yet reported PEUC exhaustions past October (see column C43 in form ETA 5159 for PEUC here).

In some states, if workers exhaust PEUC, they can get on yet another program, Extended Benefits (EB). However, in the latest data, just 694,000 workers were on EB. That’s likely less than a third of those who have exhausted PEUC. Most are left with nothing.

Tagged Unemployment insurance Coronavirus

Posted December 16, 2020 at 5:23 pm by Terri Gerstein

State attorneys general taking on protection of workers’ rights

State attorneys general (AGs) have been getting more and more involved in defending workers’ rights, including bringing wage theft cases, suing companies such as Uber and Lyft for misclassification, and fighting noncompete and no-poach agreements.

State AGs’ evolving labor-enforcement role was the topic of the “State Attorneys General as Protectors of Workers’ Rights” webinar hosted by the Economic Policy Institute and the Harvard Law School Labor and Worklife Program on December 3, 2020, which included insights from bureau, division, and section chiefs who lead labor rights work in their state attorneys general offices.

The panelists talked about some of their cases and shared thoughts about how state AGs select cases, how they decide whether to proceed civilly or with a criminal prosecution, and how they’ve worked, sometimes behind the scenes, to safeguard workplace safety and health during the pandemic. The webinar followed up on an August report on this topic issued by EPI and the Harvard Labor and Worklife Program.

Tagged Unions and Labor Standards

Posted December 15, 2020 at 8:00 am by Krista Faries

The Biden administration can reverse much of Trump’s bad labor policy without Congress

For the last four years, at every turn, the Trump administration systematically promoted the interests of corporations and shareholders over those of working people. Through a series of executive orders and agency regulations, the Trump administration attacked workers’ health and safety, wages, and collective bargaining rights. It is critical that the Biden administration work from day one to reverse these actions and strengthen workers’ rights. Here, we review the Trump administration’s anti-worker executive and regulatory actions and chart a course for the new administration to address these harmful actions.

Tagged Unions and Labor Standards Coronavirus

Posted December 14, 2020 at 8:00 am by Lora Engdahl

Top 10 EPI reports of 2020

Staying safe. Educating our children. Having a say in workplace conditions. Fighting for fair wages when systemic racism, consolidated wealth, and corporate power thwart opportunity.

These concerns were top of mind for our readers in 2020, according to our compilation of EPI’s most-read reports.

Posted December 10, 2020 at 10:12 am by Heidi Shierholz

Unemployment claims hit highest level in months: Millions more jobs will be lost if Congress doesn’t act

Another 1.3 million people applied for UI benefits last week, including 853,000 people who applied for regular state UI and 428,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.3 million who applied for UI last week was an increase of 276,000 from the prior week, bringing initial claims back to their highest point since September. Further, last week’s increase was not just due to week-to-week volatility in the data. The four-week moving average of total initial claims is now at its highest point since October. In other words, layoffs appear to be rising, consistent with the resurgent virus. And, last week was the 38th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were greater than the second-worst week of the Great Recession.)

Most states provide 26 weeks (six months) of regular benefits, but this crisis has gone on for nearly nine months. That means many workers have exhausted their regular state UI benefits. In the most recent data, the four-week moving average of continuing claims for regular state UI dropped by 260,000 (note: the weekly number increased, but that was likely due to week-to-week volatility in the data).

Tagged Unemployment insurance Coronavirus

Posted December 9, 2020 at 11:17 am by Elise Gould

The Job Openings and Labor Turnover Survey continues to show weaker levels of hires than before the recession hit: Any hope for a quick recovery is off the table unless Congress acts now

Last week, the Bureau of Labor Statistics (BLS) reported that, as of the middle of November, the economy was still 9.8 million jobs below where it was in February and job growth slowed considerably in November. Today’s BLS Job Openings and Labor Turnover Survey (JOLTS) reports little change in October, a clear and confirming sign that the recovery is not charging ahead. In fact, hiring and job openings are below where they were before the recession hit, which makes it impossible to recover anytime soon, when we have such a massive hole to fill in the labor market.

In October, job openings rose mildly (6.5 to 6.7 million) while hires softening slightly (5.9 to 5.8 million). Separations increased (4.8 to 5.1 million), largely due to an unfortunate increase in layoffs (1.4 to 1.6 million). On the whole, the U.S. economy is seeing a significantly slower pace of hiring than we experienced in May or June—hiring is roughly where it was before the recession, which is a big problem given that we have only recovered just over half of the job losses from this spring. And job openings are now substantially below where they were before the recession began (6.7 million at the end of October, compared to 7.1 million on average in the year prior to the recession). And today’s data release only covers through October, so it doesn’t even capture November’s slowdown in job growth. With hiring and job openings at these levels, the economy is facing a long slow recovery, unless Congress acts.

Tagged Jobs and Unemployment Coronavirus

December 7, 2020 at 10:19 am by Stephen Herzenberg and Claire Kovach

COVID-19 relief should extend CARES Act work-sharing provisions

With over a million new unemployment claims still being filed each week, job growth slowing, and millions of workers about to lose emergency jobless benefits created through the CARES Act in March, it is imperative that Congress enact another COVID-19 emergency relief package as quickly as possible. In addition to key provisions such as aid to state and local governments and extending the emergency benefits for unemployed workers, Congress should also extend innovative provisions that helped prevent workers from being laid off in the first place—specifically the CARES Act’s federal subsidies for work-sharing.

Work-sharing provides a way for many businesses to cope with a drop in consumer demand without having to lay off staff. Under work-sharing, workers’ hours are reduced and they receive partial unemployment insurance (UI) benefits to make up a portion of their lost wages. For example, if a business anticipated having to lay off five workers, they might instead cut in half the hours of 10 staff—achieving the same reduction in total work hours—and those 10 workers would all receive partial unemployment benefits from the state to make up some of their lost income.

By keeping workers on the job, work-sharing mitigates the impact of joblessness and reduces unemployment peaks in downturns. Now that coronavirus vaccines appear to be on the horizon, maintaining a connection between more workers and their employers for the first part of next year makes even more sense. As the pandemic is brought under control and regular consumer demand picks up, companies with work-sharing programs won’t have to go through a process of recruiting, hiring, and training new staff; they will be able to quickly ramp back up simply by restoring participants in work-sharing to full time.

Tagged Unemployment insurance Unemployment Jobs and Unemployment Coronavirus

Posted December 4, 2020 at 2:05 pm by Heidi Shierholz

The economy President-elect Biden is inheriting: More than 26 million workers—15.5% of the workforce—are being directly hurt by the coronavirus downturn

Today was, perhaps astonishingly, the last jobs report of 2020. It’s a moment to take stock of where things stand after the first 11 months of 2020 and the first 9 months of the COVID-19 economic shock.

The Bureau of Labor Statistics (BLS) reported that the official number of unemployed workers in November was 10.7 million, and the unemployment rate was 6.7%. The official number of unemployed workers, however, is a vast undercount of the number of workers being harmed. In fact, 26.1 million workers—15.5% of the workforce—are either unemployed, otherwise out of work due to the pandemic, or employed but experiencing a drop in hours and pay. Here are the missing factors:

Some workers are being misclassified as “employed, not at work” instead of unemployed. BLS has discussed at length that there have been many workers who have been misclassified as “employed, not at work” during this pandemic who should be classified as “temporarily unemployed.” In November, there were 0.6 million such workers. (Wonky aside: Some of these workers may not have had the option of being classified as “temporarily unemployed,” meaning they weren’t technically misclassified, but all of them were out at work because of the virus.) Accounting for these workers, the unemployment rate would be 7.1%.

Tagged Unemployment insurance Unemployment Jobs and Unemployment Coronavirus

Posted December 3, 2020 at 2:08 pm by Elise Gould

What to watch on jobs day: An unfortunate continued slowing recovery due to the Senate’s inaction

While the U.S. labor market remains 10 million jobs below pre-pandemic levels, job growth has slowed significantly over the last several months. Job deficits remain sharpest in leisure and hospitality, with a 3.5 million job shortfall, followed by education and health services (1.3 million), government employment (1.2 million), and professional and business services (1.1 million). The initial rebound from the 22.2 million jobs lost in March and April began strong when important relief, including vital unemployment insurance (UI) expansions were put in place. By late summer/early fall, job growth slowed significantly, and some forecasters expect it will be even slower in November. The recovery continues to wane because of the removal of important relief measures as well as the fact that the “easy” gains from workers on temporary layoffs continue to dwindle. Without further relief, millions of workers and their families will continue to endure economic hardship as the virus continues to spread in the winter months.

It didn’t have to be this way. If the suite of UI programs were reinstated and extended through 2021, workers would not lose that valuable safety net and it would spur the creation of 5.1 million more jobs in 2021. As of now, the additional UI benefits will expire on December 26, leaving 12 million workers without a safety net, and over 4 million others will have already exhausted their benefits by this cutoff. Relief and recovery efforts need to also include aid to state and local governments, which unfortunately have seen outright losses in jobs over the last couple of months due to revenue shortfalls and costly forced austerity without federal assistance.

Tagged Unemployment Jobs and Unemployment Coronavirus

Posted December 3, 2020 at 10:06 am by Heidi Shierholz

One million people applied for unemployment insurance last week: Unless Congress acts, millions of people will soon be left without a safety net

Another 1.0 million people applied for UI benefits last week, including 712,000 people who applied for regular state UI and 289,000 who applied for Pandemic Unemployment Assistance (PUA). After two weeks of increases, the 1.0 million who applied for UI last week was a welcome decline of 105,000 from the prior week. However, last week was the 37th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were still nearly three times where they were a year ago.)

For now, after an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of regular state UI. However, PEUC is set to expire on December 26 (as is PUA—more on these expirations below).

Tagged Unemployment insurance Coronavirus

Posted December 2, 2020 at 3:16 pm by Elise Gould and Josh Bivens

Reinstating and extending the pandemic unemployment insurance programs through 2021 could create or save 5.1 million jobs

Key takeaways:

While the economy remains 10 million jobs below pre-pandemic levels and job growth is slowing significantly as the pandemic surges, the remaining suite of pandemic unemployment insurance (UI) programs are set to expire on December 26, even as one of the most important—the extra $600 per week—has already expired and millions of workers have already exhausted benefits or had them significantly slashed.
The economic shock from COVID-19 has been ongoing long enough that roughly one-third of unemployed workers have been unemployed for 27 weeks or longer. Unemployment insurance benefits should not just be made much more generous, they should also have their durations extended substantially. Once again, this highlights that UI benefit generosity and duration should never be tied to arbitrary dates but should rather be dictated by economic conditions (preferably tied to employment rates).
If these programs—including the extra $600—are reinstated and extended through 2021, and if the virus is brought under control so that economic growth for 2021 returns to being simply a function of aggregate demand growth, the economy would be boosted by 3.5% and 5.1 million more jobs would be added in 2021.

Tagged Unemployment insurance Recession/stimulus Job creation Unemployment GDP Economic Growth Congress Coronavirus

Posted December 1, 2020 at 5:23 pm by Lawrence Mishel and Jori Kandra

Wages for the top 1% skyrocketed 160% since 1979 while the share of wages for the bottom 90% shrunk: Time to remake wage pattern with economic policies that generate robust wage-growth for vast majority

Newly available wage data tell a familiar story: In every period since 1979, wages for the bottom 90% were continuously redistributed upward to the top 10% and frequently to the very highest 1.0% and 0.1%. This unceasing growth of wage inequality that undercuts wage growth for the bottom 90% reaffirms the need to place generating robust wage growth for the vast majority and worker power at the center of economic policymaking.

For last year, 2019, the data show a continuation of the trend of annual wages rising fastest for those in the top 10% while those in the bottom 90% saw below-average wage growth. However, within the top 10%, wages rose faster for those in the 90th–99th percentiles than for those in the top 1%.

A similar pattern as in 2019 prevailed over the entire 2007–2019 business cycle as wages were redistributed in two ways, up from the bottom 90% to the top 10% and within the top 10% downward from the top 1% to those in the 90th–99th percentiles. Still, the top 1% has done far better in the 2009–2019 recovery (wages rose 20.4%) than did those in the bottom 90% (wages rose only 8.7%).

Tagged Income and wages Wages

Posted November 25, 2020 at 9:59 am by Heidi Shierholz

Unemployment claims rise for second week in a row: Millions will lose federal unemployment benefits in December unless Senate Republicans act

Because of the Thanksgiving holiday this week, data on unemployment insurance (UI) claims—usually released on Thursdays—were released today. The data show that another 1.1 million people applied for UI benefits last week, including 778,000 people who applied for regular state UI and 312,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.1 million who applied for UI last week was an increase of 22,000 from the prior week’s figures—the second week in a row that initial claims have risen. Further, last week was the 36th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were still greater than the second-worst week of the Great Recession.)

Most states provide 26 weeks of regular benefits, but this crisis has gone on much longer than that. That means many workers are exhausting their regular state UI benefits. In the most recent data, continuing claims for regular state UI dropped by 299,000, from 6.4 million to 6.1 million.

Tagged Unemployment insurance Coronavirus

Posted November 21, 2020 at 8:25 am by Valerie Wilson

Racism and the Economy: Focus on Employment

Valerie Wilson, director of the Economic Policy Institute Program on Race, Ethnicity, and the Economy, gave the keynote address at the Federal Reserve Symposium on Racism and the Economy. These are her remarks.

According to the Center for Assessment and Policy Development, racial equity is the condition that would be achieved if one’s racial identity no longer predicted, in a statistical sense, how one fares.

In reality, statistical analysis often reveals that racial identity is a measurable, significant, and persistent predictor of labor market outcomes. Let’s pause and think about that for a moment. Why should racial identity—something as arbitrary and superficial as physical appearance (skin color)—be statistically correlated with one’s likelihood of being employed or how much they are paid for their labor?

Tagged Race and Ethnicity Black Americans

Posted November 19, 2020 at 9:57 am by Heidi Shierholz

No improvement in initial unemployment claims as labor market gains falter

Another 1.1 million people applied for unemployment insurance (UI) benefits last week, including 742,000 people who applied for regular state UI and 320,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.1 million who applied for UI last week was an increase of 55,000 from the prior week’s figures. Last week was the 35th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were still 3.3 times where they were a year ago.)

For now, after an individual exhausts regular state benefits, they can move on to Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of regular state UI. However, PEUC is set to expire on December 26 (as is PUA).

In the latest data available for PEUC (the week ending October 31), PEUC rose by 233,000, from 4.1 million to 4.4 million, offsetting only about 60% of the 383,000 decline in continuing claims for regular state benefits for the same week. This is likely due in large part to the fact that many of the roughly 2 million workers who were on UI before the recession began, or who are in states with less than the standard 26 weeks of regular state benefits, are exhausting PEUC benefits at the same time others are taking it up. More than 1.5 million workers have exhausted PEUC so far (see column C43 in form ETA 5159 for PEUC here). Last week, 634,000 workers were on Extended Benefits (EB), which is a program that eligible unemployed workers in some states can get on if they’ve exhausted PEUC.

Tagged Unemployment insurance Coronavirus

Posted November 18, 2020 at 12:12 pm by Emma García and Elaine Weiss

Learning during a pandemic: What decreased learning time in school means for student learning

One reflection of how much students have learned and developed since schools closed in March can be found in late Argentinian cartoonist Quino’s 2007 comic strip, in Manolito and his peers’ self-assessments of what they learned in school. When Manolito’s teacher asks, he replies: “From March to today, nothing.” (The implied message is: Others are learning, while he is stuck.)

Lavado, Joaquín Salvador, Quino. 2007. Toda Mafalda. Buenos Aires, Ediciones de la Flor.

As many parents and teachers have seen, these are the likely realities for students in 2020. Because learning time in school matters, and students’ learning and development tend to vary greatly even when schools operate in normal circumstances, challenges to learning were magnified when schools closed—due to prolonged cuts to learning time in school, the access to some “substitute” educational opportunities during the pandemic, and the many factors that influence out-of-school learning.

In this blog post, we review the consequences of reduced learning time in school settings during the pandemic, and what the evidence tells us to do about it when we begin to control the spread of the virus. (For a detailed review of the challenges COVID-19 brought to education and our policy recommendations, see “COVID-19 and student performance, equity, and U.S. education policy: Lessons from pre-pandemic research to inform relief, recovery, and rebuilding.”)

Tagged Education Coronavirus

Posted November 12, 2020 at 10:08 am by Heidi Shierholz

With unemployment benefits for millions of workers set to expire in December, Senate Republicans must stop blocking aid

More than 1.0 million people applied for unemployment insurance (UI) benefits again last week, including 709,000 people who applied for regular state UI and 298,000 who applied for Pandemic Unemployment Assistance (PUA). PUA is the federal program that provides up to 39 weeks of benefits for workers who are not eligible for regular unemployment insurance, like the self-employed. Without congressional action, PUA will expire on December 26 (more on that below).

The 1.0 million who applied for UI last week was a decline of 112,000 from the prior week’s figures. Last week was the 34th straight week total initial claims were far greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were still more than 3.0 times where they were a year ago.)

For now, after an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of regular state UI. However, like PUA, PEUC is set to expire on December 26 (more on that below).

Tagged Unemployment insurance Coronavirus

Posted November 10, 2020 at 2:23 pm by Anu Kumar, David Cooper, and Jaimie Worker

Voters chose more than just the president: A review of important state ballot initiative outcomes

With enormous attention focused—understandably—on the outcome of the presidential and congressional races on November 3, it’s easy to forget that voters also decided on nearly 6,000 state legislative races and a host of ballot measures in states and localities, including many with important implications for workers, economic justice, racial equity, and the fight against climate change.

There were 120 statewide measures considered by voters across the country. In this post, we briefly highlight some of the notable measures that would have a meaningful impact on the welfare of workers, families, and communities; the power of workers and communities to have a voice in economic policy decisions; and the ability of all people to achieve economic security, regardless of race, ethnicity, or gender. We also call attention to the advocacy and research of Economic Analysis and Research Network (EARN) members in these states, whose work in many cases was critical in explaining the implications of the measures for workers, families, and communities.

Tagged Minimum wage Infrastructure Taxes Economic inequality Paid sick leave Budget, Taxes, and Public Investment Housing Public Investment Gig economy Voting access