More than three months in, job losses remain at historic levels: Over one in five workers are either on unemployment benefits or are waiting to get on

Last week, 2.2 million workers applied for unemployment benefits. This is the 14th week in a row that initial unemployment claims are more than twice the worst week of the Great Recession.

Of the 2.2 million who applied for unemployment benefits last week, 1.5 million applied for regular state unemployment insurance (UI) on a not-seasonally-adjusted basis, and 0.7 million applied for Pandemic Unemployment Assistance (PUA). PUA is the federal program for workers who are out of work because of the virus but who are not eligible for regular UI (e.g., the self-employed). At this point, 46 states, D.C., and Puerto Rico are reporting PUA claims.

Overall, things are not really improving. Figure A shows continuing claims in all programs—these data allow us to see how recipiency levels have changed over time (the latest date continuing claims are available for all programs is June 6). After the peak on May 9, claims declined somewhat, but increased in the latest data—nearly back to the peak—and are more than 29 million above where they were a year ago (which was 1.5 million).

Figure A

Continuing unemployment claims in all programs: January 4, 2020–June 6, 2020

Regular state UI PUA Other programs (mostly PEUC and STC)
2020-01-04 2,245,684 0 32,520
2020-01-11 2,137,910 0 33,882
2020-01-18 2,075,857 0 32,625
2020-01-25 2,148,764 0 35,828
2020-02-01 2,084,204 0 33,884
2020-02-08 2,095,001 0 35,605
2020-02-15 2,057,774 0 34,683
2020-02-22 2,101,301 0 35,440
2020-02-29 2,054,129 0 33,053
2020-03-07 1,973,560 0 32,803
2020-03-14 2,071,070 0 34,149
2020-03-21 3,410,969 0 36,758
2020-03-28 8,158,043 0 48,963
2020-04-04 12,444,309 0 64,201
2020-04-11 16,249,334 136,417 117,331
2020-04-18 17,756,054 994,850 168,467
2020-04-25 21,723,230 3,402,409 237,569
2020-05-02 20,823,141 6,102,381 338,016
2020-05-09 22,725,217 7,793,066 438,839
2020-05-16 18,788,626 10,740,918 435,871
2020-05-23 19,022,578 9,715,948 766,537
2020-05-30 18,548,442 9,374,248 1,336,818
2020-06-06 18,330,151 11,046,401 1,177,265
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Notes: 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 Pandemic Emergency Unemployment Compensation (PEUC), Short-Time Compensation (STC), 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, June 25, 2020.

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The latest figure in “other programs” in Figure A is 1.2 million claims. Most of this (0.9 million) is Pandemic Emergency Unemployment Compensation (PEUC). PEUC is the additional 13 weeks of benefits provided by the CARES Act for people who have exhausted regular state benefits. PEUC declined somewhat in the latest data, but we can expect the number of people on PEUC to grow dramatically as the crisis drags on and more and more of the nearly 18 million people currently on regular state benefits exhaust their regular benefits and move on to PEUC.

“Other programs” in Figure A also includes Short-Time Compensation (STC). STC could be (and should be) being used extensively as an alternative to layoffs where employers reduce work hours rather than lay off workers, and workers get partial UI. But it is being underutilized and just 292,077 workers are receiving STC.

As mentioned, Figure A only covers continuing claims through June 6. However, we can combine the most recent data on both continuing claims and initial claims to get a measure of the total number of people “on” unemployment benefits as of June 20. Figure B presents that calculation, showing that as of June 20, 33.1 million workers are either on unemployment benefits, have been approved and are waiting for benefits, or have applied very recently and are waiting to get approved. That is more than one in five workers.

Figure B

DOL reports that 33.1 million workers are either on unemployment benefits or have applied and are waiting to see if they will get benefits: June 20, 2020

Regular state UI: Continued claims Regular state UI: Initial claims PUA: Continued claims PUA: Initial claims Other programs (mostly PEUC and STC) Total
Cumulative 17,921,282 1,457,373 11,046,401 1,499,040 1,177,265 0
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Notes: Non-seasonally-adjusted data are used throughout. Regular state UI continued claims are for the week ending June 13; regular state UI initial claims are for the week ending June 20. PUA continued claims are for the week ending June 6; PUA initial claims are for the weeks ending June 13 and June 20. “Other programs” are continued claims in other programs for the week ending June 6.

Non-seasonally-adjusted data are used throughout. Regular state UI continued claims are for the week ending June 13; regular state UI initial claims are for the week ending June 20. PUA continued claims are for the week ending June 6; PUA initial claims are for the weeks ending June 13 and June 20. “Other programs” are continued claims in other programs for the week ending June 6. Initial claims are in the first round of processing. Continued claims have made it through at least the first round of processing. 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 Pandemic Emergency Unemployment Compensation (PEUC), Short-Time Compensation (STC), 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. Regular state UI claims are reported for all 50 states, the District of Columbia, the Virgin Islands, and Puerto Rico. PUA claims are currently only being reported for 46 states, D.C., and Puerto Rico. Continued claims for PUA and UI should be non-overlapping, and initial claims for PUA and UI should also be non-overlapping (I say “should” because that is how DOL has directed agencies to report them—but some states may be misreporting).

Source: Department of Labor (DOL) Unemployment Insurance Weekly Claims (News Release), retrieved from DOL, https://www.dol.gov/ui/data.pdf, June 25, 2020.

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It’s important to note that of the 33.1 million workers “on” unemployment benefits, more than a third are on PUA. This is a sobering reminder of how enormous the gaps are in our regular state unemployment insurance programs and how important it is that Congress established the PUA at the start of the pandemic.

Today’s UI data highlight the deep recession we are now in. It’s important to remember that this recession is going to exacerbate existing racial inequalities by causing greater job loss in Black and Hispanic households than in white households.

Policymakers need to act decisively to fight this recession and set our economy up for a strong recovery, which will not happen without substantial additional fiscal aid. For example, the across-the-board $600 increase in weekly unemployment benefits, which was one of the most effective parts of the CARES Act on both humanitarian and economic grounds, should be extended well past its expiration in late July. It’s worth noting that some folks are wrongly saying that the extra $600 in benefits expires July 31. The CARES Act states that the extra $600 applies to weeks of unemployment “ending on or before July 31, 2020,” which is a Friday. Since, in the UI world, weeks typically end on Saturday, the last payment will be for the week ending July 25 (the one exception is New York, which has an end date of July 26). In other words, that extra $600 expires one month from today almost everywhere. Allowing it to expire would be a disaster for its recipients, who would have to drastically cut their spending, and for the macro economy, which is being held afloat by this spending. Letting this $600 expire will hurt all of us.

Federal lawmakers also need to provide massive federal aid to state and local governments. Without it, 5.3 million workers in the public and private sectors will likely lose their jobs by the end of 2021. And importantly, we can’t turn off federal relief too early. Automatic triggers (where provisions phase out as the unemployment rate falls or the employment-to-population ratio rises) would alleviate the very real threat that we turn off federal aid when the economy is still too weak, hamstringing the recovery.

A note on the unemployment benefits data: Claims for UI and PUA should be completely non-overlapping because that is how the Department of Labor has directed state agencies to report them. However, some states may be misreporting claims so there may be some double-counting. Also, I focus on the not-seasonally-adjusted numbers for regular state UI claims because the way DOL does seasonal adjustments of unemployment insurance claims data is distortionary at a time like this. Claims from all other programs, including PUA, are only available on an unadjusted basis.