Half a year into the pandemic and millions of people are unemployed: Congress must provide relief

Another 1.5 million people applied for unemployment insurance (UI) benefits last week. That includes 860,000 people who applied for regular state UI and 659,000 who applied for Pandemic Unemployment Assistance (PUA). PUA is the federal program for workers who are not eligible for regular unemployment insurance, like gig workers. It provides up to 39 weeks of benefits, but it is set to expire at the end of this year.

Last week was the 26th week in a row total initial claims were far greater than the worst week of the Great Recession. If you restrict to regular state claims (because we didn’t have PUA in the Great Recession), claims are still greater than the 3rd-worst week of the Great Recession.

Most states provide 26 weeks of regular state benefits. After an individual exhausts those benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of state UI benefits that is available only to people who were on regular state UI. (A reminder: PEUC is different from Pandemic Unemployment Compensation, or PUC, the now-expired $600 additional weekly benefit, which anyone on any UI program had been eligible for.)

Given that continuing claims for regular state benefits have been elevated since the third week in March, we should begin to see PEUC spike up dramatically soon (starting with the week ending September 19th). However, because of reporting delays for PEUC, we won’t actually get PEUC data from this week (the week ending September 19th) until October 8th.

Department of Labor (DOL) data suggest that right now, 31.5 million workers are either on unemployment benefits or have applied recently and are waiting to get approved (see Figure A). But importantly, that number is a substantial overestimate for at least two reasons: (1) Initial claims for regular state UI and PUA should be non-overlapping—that is how DOL has directed state agencies to report them—but some individuals are erroneously being counted as being in both programs; (2) Some states are including retroactive payments in their continuing PUA claims, which would also lead to double counting (this story does a great job of explaining this). The bottom line is that we truly don’t know exactly how many people are receiving unemployment insurance benefits right now. That is both bonkers, and a harsh reminder that we need to invest heavily in our data infrastructure.

Figure A

DOL numbers indicate that 31.5 million workers are either receiving unemployment benefits or have applied and are waiting to see if they will get benefits: But caution, this is an overestimate due to reporting issues (see below), September 12, 2020

Regular state UI: Continued claims Regular state UI: Initial claims PUA: Continued claims PUA: Initial claims Other programs (mostly PEUC, STC, and EB) Total
Cumulative 12,628,000 860,000 14,467,064 1,527,051 2,017,680 0
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Caution: This is a substantial overestimate for at least two reasons: (1) initial claims for regular state UI and PUA should be nonoverlapping—that is how DOL has directed agencies to report them—but some individuals are erroneously being counted as being in both programs; (2) some states are including  retroactive payments in their continuing PUA claims, which would also lead to double counting.

Click here for notes.

Notes: This is a substantial overestimate for at least two reasons: (1) initial claims for regular state UI and PUA should be nonoverlapping—that is how DOL has directed agencies to report them—but some individuals are erroneously being counted as being in both programs; (2) some states are including  retroactive payments in their continuing PUA claims, which would also lead to double counting. Seasonally adjusted data are not available for the other components of the chart. Regular state UI continued claims are for the week ending September 5; regular state UI initial claims are for the week ending September 12. PUA continued claims are for the week ending August 29; PUA initial claims are for the weeks ending September 5 and September 12. "Other programs" are continued claims in other programs for the week ending August 29. Pandemic Unemployment Assistance (PUA) is the federal program for workers who are out of work because of the virus but who are not eligible for regular state unemployment insurance (UI) benefits (e.g. the self-employed). "Other programs" includes PEUC, STC, EB, and others; a full list can be found in the bottom panel of the table on page 4 at this link https://www.dol.gov/ui/data.pdf.

Source: Department of Labor (DOL) Unemployment Insurance Weekly Claims (News Release), retrieved from DOL, https://www.dol.gov/ui/data.pdf, September 17, 2020.

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Figure B shows continuing claims in all programs over time (the latest data are for August 29). Continuing claims are more than 28 million above where they were a year ago. However, the above caveat about continuing PUA claims applies here too, which means the 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.

Figure B

Continuing unemployment claims in all programs. (Use caution interpreting trends over time because of reporting issues, see below): March 23, 2019–August 29, 2020

date Regular state UI PUA Other programs (mostly PEUC, STC, and EB)
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 52,494 48,963
2020-04-04 12,444,309 68,897 68,003
2020-04-11 16,249,334 210,939 121,307
2020-04-18 17,756,054 1,088,281 175,922
2020-04-25 21,723,230 3,498,790 245,003
2020-05-02 20,823,294 6,226,074 346,869
2020-05-09 22,725,217 7,929,418 448,633
2020-05-16 18,791,926 11,095,269 459,452
2020-05-23 19,022,578 9,761,879 782,553
2020-05-30 18,548,442 9,392,718 1,352,837
2020-06-06 18,330,293 11,067,905 1,192,508
2020-06-13 17,552,371 12,853,484 1,105,692
2020-06-20 17,316,689 13,870,617 1,242,503
2020-06-27 16,410,059 12,008,146 1,310,567
2020-07-04 17,188,908 13,179,377 1,435,297
2020-07-11 16,221,070 13,026,272 1,568,919
2020-07-18 16,691,210 12,956,478 1,674,276
2020-07-25 15,700,971 10,723,396 1,832,583
2020-08-01 15,112,240 11,224,774 1,722,541
2020-08-08 14,098,536 10,972,770 1,946,059
2020-08-15 13,792,016 13,570,327 1,862,342
2020-08-22 13,067,660 14,656,297 1,945,913
2020-08-29 13,283,582 14,467,064 2,017,680
ChartData Download data

The data below can be saved or copied directly into Excel.

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.

Notes:  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. Data are not seasonally adjusted. Pandemic Unemployment Assistance (PUA) is the federal program for workers who are out of work because of the virus but who are not eligible for regular state unemployment insurance benefits (e.g. the self-employed). "Other programs" includes PEUC, STC, EB, and others; a full list can be found in the bottom panel of the table on page 4 at this link https://www.dol.gov/ui/data.pdf.

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, September 10, 2020.

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Republicans in the Senate allowed the across-the-board $600 increase in weekly UI benefits to expire at the end of July. Last week was the seventh week of unemployment in this pandemic for which recipients did not get the extra $600. That means most people on UI are now are forced to get by on the meager benefits that are in place without the extra payment, benefits which are typically around 40% of their pre-virus earnings. It goes without saying that most folks can’t exist on 40% of prior earnings without experiencing a sharp drop in living standards and enormous pain. This piece shows that there is nowhere in the country a worker can afford to live on unemployment insurance alone.

In early August, President Trump issued a mockery of an executive memorandum. It was supposed to give recipients an additional $300 or $400 in benefits per week. But in reality, even this drastically reduced benefit will be extremely delayed for most workers, is only available for a few weeks, and is not available at all for many. This chart shows how much less in benefits people are getting under Trump’s executive memorandum than they did under the CARES Act. The executive memorandum’s main impact was to divert attention from the only thing that can provide the needed relief—increasing benefits through legislation. Congress must act, but Republicans in the Senate are blocking progress.

Blocking the extra $600 is terrible not just on humanitarian grounds, but also on economic grounds. The extra $600 was supporting a huge amount of spending by people who now have to make drastic cuts. The spending made possible by the $600 was supporting 5.1 million jobs. Cutting that $600 means cutting those jobs—it means the workers who were providing the goods and services that UI recipients were spending that $600 on lose their jobs. The map in Figure B of this blog post shows many jobs will be lost by state now that the $600 unemployment benefit has been allowed to expire. The labor market is still 11.5 million jobs below where we were before the coronavirus recession. Now is not the time to cut benefits that support jobs.

But what about the supposed work disincentive effect of the extra $600? Rigorous empirical studies show that any theoretical work disincentive effect of the $600 was so minor that it cannot even be detected. For example, a study by Yale economists found no evidence that recipients of more generous benefits were less likely to return to work, which is what we would expect to see if the extra payments really were a disincentive to work. And a case in point: in May/June/July—with the $600 in place—9.2 million people went back to work, and a large share of likely UI recipients who returned to work were making more on UI than their prior wage. The extra benefits did not stop them from going back. A job offer is too important at a time like this to be traded for a temporary increase in benefits, and when commentators ignore that, they are ignoring the realities of the lives of working people. Further, there are 8.5 million more unemployed workers than job openings, meaning millions will remain jobless no matter what they do. Dropping the $600 cannot incentivize people to get jobs that are not there.

Dropping the extra $600 is also exacerbating racial inequality. Due to the impact of historic and current systemic racism, Black and brown communities have seen more job loss in this recession, and have less wealth to fall back on. They are taking a much bigger hit with the expiration of the $600. This is particularly true for Black and brown women and their families, because in this recession, these women have seen the largest job losses of all. It is also important to remember that people haven’t just lost their jobs. An estimated 12 million workers and their family members have lost employer-provided health insurance due to COVID-19. The Senate must extend the UI provisions of the CARES Act, both to provide relief to the jobless and to the bolster the broader economy.