Many workers have exhausted their state’s regular unemployment benefits: The CARES Act provided important UI benefits and Congress must act to extend them
Another 1.5 million people applied for unemployment insurance (UI) benefits last week. That includes 870,000 people who applied for regular state UI and 630,000 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 27th week in a row—more than six months—that 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 third-worst week of the Great Recession.
We’ve hit a grim milestone. Most states provide 26 weeks of regular benefits. That means last week was the first week many workers had exhausted their regular state UI. However, data on continuing claims for regular state UI is delayed a week, so we can’t see the drop yet. The good news is that unless there are administrative glitches, total claims should not fall as a result of individuals exhausting regular state UI, because unemployed workers can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of benefits (and is only available to people who were on regular state UI). Note: PEUC was part of the CARES Act. It 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. With people moving from regular state benefits onto PEUC, I expect PEUC began to spike up dramatically last week. However, because of reporting delays for PEUC, we won’t get PEUC data from last week until October 8.
From President Trump’s first day on the job, his administration has systematically promoted the interests of corporate executives and shareholders over those of working people. The current administration has rolled back worker protections, proposed budgets that slash funding for agencies that safeguard workers’ rights, wages, and safety, and consistently attacked workers’ ability to organize and collectively bargain. The pandemic has provided the administration an opportunity to continue its attack on workers’ rights. We recently published a report that looks at the 50 most egregious actions the Trump administration has taken against workers, but here we take a look at five of the worst actions on that list.
The Trump administration failed to adequately address the coronavirus pandemic
Despite the widespread reach of COVID-19 in the workplace, the Occupational Safety and Health Administration (OSHA) has refused to issue an Emergency Temporary Standard to protect workers during the pandemic. OSHA is also failing to enforce the Occupational Safety and Health Act during the pandemic. Despite nearly 10,000 complaints from workers about unsafe working conditions from COVID-19, the agency has only issued a handful of citations for failure to protect workers. In addition, the Centers for Disease Control issued dangerous guidelines that allowed essential workers to continue to work even if they may have been exposed to the coronavirus—as long as they appear to be asymptomatic and the employer implements additional limited precautions. The lack of these basic protections has led to thousands of essential workers becoming infected with the coronavirus, and many have died as a result.
While Congress passed the Families First Coronavirus Relief Act (FFCRA) and the CARES Act to provide workers with temporary paid sick leave and unemployment insurance (UI) expansion, the Trump administration issued temporary guidance that weakened worker protections under these relief and recovery measures. For example, the Department of Labor (DOL) excluded millions of workers from paid leave provisions under the FFCRA, including 9 million health care workers and 4.4 million first responders, before revising the rule after a federal judge invalidated parts of the original rule in August. Further, the Trump administration has vehemently opposed the extension of the $600 increase of unemployment insurance benefits and additional aid to state and local governments. The lack of fiscal relief will cost millions of jobs, including 5.3 million jobs due to insufficient federal aid to state and local governments and 5.1 million jobs due to the expiration of the $600 boost in UI.
Over 13 million more people would be in poverty without unemployment insurance and stimulus payments: Senate Republicans are blocking legislation proven to reduce poverty
It is often underappreciated how effective public safety net spending and social insurance programs are in reducing poverty. Even in normal years, tens of millions of people are kept out of poverty only because of these programs. As the COVID-19 pandemic hit earlier this year, the importance of public spending in averting poverty became even more evident.
In its annual report on household income and poverty released Tuesday, the Census Bureau estimated that Social Security kept 26.5 million people out of poverty in 2019, and refundable tax credits like the Earned Income Tax Credit and Child Tax Credit reduced the number of people in poverty by 7.5 million. Unemployment insurance (UI) kept about 472,000 people from being in poverty (see Figure A) in 2019. The relatively small poverty reduction is due to the fact that few people received UI in 2019, both because of relatively low unemployment rates and because many low-wage workers are generally ineligible for UI benefits due to restrictive earnings eligibility requirements.
Unemployment insurance and Economic Impact Payments reduced poverty in June 2020: Number of people in poverty and reductions due to specific government programs, in 2019 and in June 2020 (thousands)
|Category||Number of people|
|Total number of people in poverty in 2019||33,984|
|Total number of people in poverty in June 2020||29,264|
|Economic Impact Payments||8,181|
|EIP and UI||13,216|
Notes: All the estimates are based on official poverty rate estimates, except the 2019 estimate of the UI poverty reduction uses the Supplemental Poverty Measure.
Source: The June 2020 estimates use percent changes in poverty from January to June 2020 estimated in Table 3, Panel A, of Han, Meyer, and Sullivan, “Income and Poverty in the COVID-19 Pandemic” (2020), http://www.nber.org/papers/w27729, and apply those estimates to the official 2019 poverty level from the 2020 Current Population Survey Annual Social and Economic Supplement.
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 third-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 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.)
Yesterday’s Census Bureau report on 2019 income levels showed significant gains in median household income in 2019, but it doesn’t necessarily tell the whole story. First, those gains may not be as strong as initially reported given survey nonresponse bias, which we explain below. Second, household incomes in 2019 provide little information on what is currently happening in the U.S. economy because of the COVID-19 pandemic. Third, as a measure of how strong the economy can get, there is still room for improvement in terms of overall growth as well as in narrowing economic inequality and closing racial gaps.
According to the Census Bureau’s latest report, median household incomes rose 6.8% between 2018 and 2019. Ignoring the nonresponse concerns and taking this at face value, this represents a significant step towards reclaiming the lost decade of income growth caused by the Great Recession. The economy continued to grow in 2019 and the unemployment rate averaged 3.7% over the year. Increasing earnings as well as slowing inflation between 2018 and 2019 contributed to significant gains in household incomes.
And yet there’s reason to put a big old asterisk on the data for 2019. Although the data release includes information about 2019 only, the data was collected between February and April of this year, right as the pandemic began to spread rapidly and most of the country was locked down. This Census paper discusses some of the impacts the pandemic had on data collection efforts. Overall, nonresponse increased significantly and was more strongly associated with income than in previous years, with nonresponse decreasing as income increases, meaning that income data could be skewed higher than it actually was. Respondents were also less likely to be Black and more likely to be white or Hispanic. Using that information, researchers at the Census provided new estimates for household income over the last four years, provided as a separate working paper and not adjusted in the official Census report. Figure A provides some perspective on those changes along with other data changes in the last several years. Solid lines are reported CPS ASEC data; dashed lines prior to 2013 denote historical values imputed by applying the redesigned income methodology in 2013 to past trends; and the dotted lines since 2016 represent the new imputed values from the Census working paper on nonresponse rates.
The Census Bureau report on income, poverty, and health insurance coverage in 2019 reveals impressive growth in median household income relative to 2018 across all racial and ethnic groups, but income gaps persist. While the Census cautions that the 2019 income estimates may be overstated due to a decline in response rates for the survey administered in March of this year, real median household income increased 10.6% among Asian households (from $88,774 to $98,174), 8.5% among Black households (from $42,447 to $46,073), 7.1% among Hispanic households (from $52,382 to $56,113), and 5.7% among non-Hispanic white households (from $71,922 to $76,057), as seen in Figure A.
In 2019, the median Black household earned just 61 cents for every dollar of income the median white household earned (up from 59 cents in 2018), while the median Hispanic household earned 74 cents (unchanged from 2018).
Real median household income by race and ethnicity, 2000–2019
Note: Because of a redesign in the CPS ASEC income questions in 2013, we imputed the historical series using the ratio of the old and new method in 2013. Solid lines are actual CPS ASEC data; dashed lines denote historical values imputed by applying the new methodology to past income trends. The break in the series in 2017 represents data from both the legacy CPS ASEC processing system and the updated CPS ASEC processing system. White refers to non-Hispanic whites, Black refers to Blacks alone or in combination, Asian refers to Asians alone, and Hispanic refers to Hispanics of any race. Comparable data are not available prior to 2002 for Asians. Shaded areas denote recessions.
Source: EPI analysis of Current Population Survey Annual Social and Economic Supplement Historical Poverty Tables (Table H-5 and H-9).
State and local governments still desperately need federal fiscal aid to prevent harmful austerity measures
In March and April of this year, the economy lost an unprecedented 22.1 million jobs. From May to August, 10.6 million of these jobs returned. But nobody should take excess comfort in the fast pace of job growth in those months. It was widely expected that the first half of jobs lost due to the COVID-19-driven shutdowns were going to be relatively easy to get back. But even with the jobs gained since April, the economy remains 11.5 million jobs below its pre-pandemic level in February, and the low-hanging fruit have been largely plucked. One of the key factors that will radically slow the pace of job growth in coming months is the looming state and local fiscal crisis. Using data from the recovery from the Great Recession, we simply show how state and local austerity and job loss can be a lagging indicator, putting severe downward pressure on growth even years after the official recession ends. We find:
- From the beginning of the Great Recession in January 2008 to the trough of state and local government employment, 566,000 state and local government jobs were lost.
- The state and local employment trough occurred in July 2013, more than five-and-a-half years after the official start of the Great Recession.
- During the official recession from January 2008 to June 2009, state and local governments actually added 142,000 jobs.
- In the first year of recovery (from June 2009 to June 2010), the state and local sector lost 215,000 jobs. The 73,000 jobs lost between December 2007 and June 2010 constituted just 0.3% of state and local employment. Even a year after the recession officially ended, cuts in the state and local sector were greatly softened by the substantial federal fiscal aid included in the American Relief and Recovery Act (ARRA).
- In the second year of recovery (from June 2010 to June 2011), the state and local sector lost 368,000 jobs. Job losses continued through July 2013, with another 250,000 jobs lost.
- State and local governments have already lost jobs during this contraction and are recovering more slowly than the private sector. Without federal aid now, more jobs—in both the public and private sectors—will be lost down the line.
These data are presented in Figure A. Figure B presents job losses for state and local and private-sector jobs, both indexed to their December 2007 business cycle peak. The upshot of this analysis for today’s policymakers is clear: The severe blow to state and local budgets caused by the coronavirus shock is going to drag on growth for years to come absent bold action from federal policymakers. In the case of the Great Recession, the combined effect of job cuts and cuts to other state and local spending delayed a full recovery to pre–Great Recession unemployment rates by more than four years. The lessons could not be more clear: Without substantial federal aid to state and local governments—and soon—our near-term economic future will be substantially worse.
This fact sheet provides key numbers from today’s new Census reports, Income and Poverty in the United States: 2019 and The Supplemental Poverty Measure: 2019. Each section has headline statistics from the reports for 2019, as well as comparisons with the previous year, with 2007 (the final year of the economic expansion that preceded the Great Recession), and with 2000 (the historical high point for many of the statistics in these reports). All dollar values are adjusted for inflation (2019 dollars). Because of a redesign in the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) income questions in 2013, we imputed the historical series using the ratio of the old and new method in 2013. All percentage changes from before 2013 are based on this imputed series. We do not adjust for the break in the series in 2017 due to differences in the legacy CPS ASEC processing system and the updated CPS ASEC processing system, but these differences are small and statistically insignificant in most cases. Also, there are significant concerns about data quality, given the fall in survey response rates. It appears that nonresponse biased income estimates up and poverty statistics down so the actual reported improvement should be taken with a grain of salt.
Median annual earnings for men working full time grew 2.1%, to $57,456, in 2019. Men’s earnings are up 3.0% since 2007, and are 3.6% higher than they were in 2000.
Median annual earnings for women working full time grew 3.0%, to $47,299, in 2019. Women’s earnings are up 9.0% since 2007, and are 15.7% higher than they were in 2000.
Median annual earnings for men working full time in 2019: $57,456
Change over time:
- 2018–2019: 2.1%
- 2007–2019: 3.0%
- 2000–2019: 3.6%
Median annual earnings for women working full time in 2019: $47,299
Change over time:
- 2018–2019: 3.0%
- 2007–2019: 9.0%
- 2000–2019: 15.7%
Former Federal Reserve Chair Alan Greenspan told CNBC last week that his “biggest concern” in regard to the economic outlook included too-high budget deficits. This concern is both completely misplaced and widely expressed.
We have already addressed a number of FAQs about deficits and debt. Besides those FAQs, however, another common question people ask is, “Where is the money the government borrows coming from?” Related to this fear is concern that the source of borrowing (whatever it is) might dry up at any time, and the result could be spiking interest rates that force firms to cut back on investment in productive private-sector investments, which in turn would slow economic growth in the future.
The short answers to these concerns are pretty simple: The money the government is borrowing comes mostly from ourselves, and that’s a key reason why we can be sure that interest rates won’t start rising unless and until we have reached a full recovery.
Below, we’ll explain what it means that federal budget deficits mostly amount to U.S. households borrowing from themselves.
In March and April this year, whole industries in which U.S. consumers spend money were shut down (restaurants, hotels, air travel, gyms, etc.). While there are some substitutes for some of this spending (when restaurants close, people tend to spend more money on groceries, for example), these offsets are nowhere near one-for-one. This means that as the places where people spend lots of money closed, households spent less. Because one person’s spending is another person’s income, as household consumption spending collapsed, market-based incomes collapsed in turn (i.e., workers in COVID-19-shutdown sectors stopped getting paychecks and business owners stopped earning profits).
Absent any policy response, a horrific vicious cycle would have started. Laid-off restaurant and airline workers would have cut back spending on everything—including spending in sectors that COVID-19 had not directly shut down. At that point, workers in non-coronavirus-affected sectors would have seen cuts to their incomes and reduced their own spending—and the downward cycle would continue. The few months of significant economic support provided by the CARES Act starting in April didn’t just provide vital income support to laid-off workers—it also broke this vicious cycle and put up a firewall between the coronavirus-driven shutdowns and the rest of the economy.
Raising the minimum wage to $15 by 2025 will restore bargaining power to workers during the recovery from the pandemic
The 1963 March on Washington for Jobs and Freedom demanded a federal minimum wage that would, as economist Ellora Derenoncourt has observed, be the equivalent in inflation-adjusted terms of almost $15.00 an hour today. While organizing efforts such as the “Fight for $15” have led to many minimum wage increases at the state and local levels, the current $7.25 federal minimum wage stands at less than half of that 57-year-old goal.
In spite of national grassroots efforts, Congress has failed for more than a decade to raise the federal minimum wage. Most recently, opponents have argued that the pandemic means that we still can’t afford to raise the minimum wage to the level sought by the civil rights movement back when John Kennedy was president.
In 1963, the applicable minimum wage varied by industry between $1.00 and $1.25 per hour, and there was no minimum wage at all for agriculture, nursing homes, restaurants, and other service industries that disproportionately employed Black workers. The March on Washington’s demands were for a $2.00 national minimum wage “that will give all Americans a decent standard of living” and to extend its coverage “to include all areas of employment which are presently excluded.” A few years later, Congress expanded the policy’s coverage to some of the previously excluded sectors and significantly raised the minimum wage, to $1.40 in 1967 and then $1.60 in 1968. Derenoncourt and Claire Montialoux demonstrated convincingly that these increases were responsible for more than 20% of the fall in the Black–white income gap during the Civil Rights Era.
But had policymakers met the original demands of the March on Washington, the minimum wage in 2020 would already be nearly $15 per hour. Concretely, as Figure A shows, if the minimum wage had been raised to $2.00 in 1963, with future increases tied to the cost of living, the minimum wage this year would be $14.79, more than twice its current value of $7.25. Instead, after it rose to the inflation-adjusted high point of $10.43 in 1968, infrequent increases since then have dramatically eroded its value.
On Tuesday, the Census Bureau will release its annual data on earnings, incomes, poverty, and health insurance coverage for 2019. There are a number of important things to know about this data release, including:
- These data report household incomes from 2019, not 2020. In short, this data will be silent on what has happened since the pandemic and ensuing recession hit the United States and resulted in widespread job loss and health devastation. It will, however, provide some insights into the labor market as we entered the current recession, which magnified deeply entrenched economic inequalities and racial and ethnic disparities.
- The data on incomes in 2019 was collected in February, March, and April of 2020. Its collection was likely extremely hampered by the COVID-19 pandemic. This could make it less reliable than previous year’s releases, and biases could be particularly large for low-income households.
- The data will give us insight into how evenly (or unevenly) economic growth has been distributed across U.S. households in 2019. Other data sources that are released more than once a year too often provide only averages or aggregates into what is happening in a particular month—but next week’s Census release gives a comprehensive picture of how the U.S. economy was working for typical households over the full year, including individual-, family-, and household-level data on annual earnings and incomes.
- The data are likely to show strong, relatively widespread income growth in 2019. Policymakers should take heed of this, as the root of this growth was a labor market approaching full employment, with the unemployment rate below 4% for the entire year.
UI claims rising as jobs remain scarce: Senate Republicans must stop blocking the restoration of UI benefits
Last week, total initial unemployment insurance (UI) claims rose for the fourth straight week, from 1.6 million to 1.7 million. Of last week’s 1.7 million, 884,000 applied for regular state UI and 839,000 applied for Pandemic Unemployment Assistance (PUA). A reminder: Pandemic Unemployment Assistance (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 and expires at the end of this year.
Last week was the 25th 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 second-worst week of the Great Recession. (Remember that when looking back farther than two weeks, you must compare not-seasonally-adjusted data, because DOL changed—improved—the way they do seasonal adjustments starting with last week’s release, but they unfortunately did not correct the earlier data.)
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 benefits that is available only to people who were on regular state UI. 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 around the week ending September 19—however, because of reporting delays for PEUC, we won’t actually get PEUC data from September 19 until October 8). 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.
Different economic crisis, same mistake: The Fed cannot make up for the Republican Senate’s inaction
- Following the Great Recession of 2008–2009, Congress did little to help recovery, and we relied almost exclusively on actions from the Federal Reserve to spur recovery. That was a mistake.
- It is Congress that has the tools that could end the economic crisis, and the Senate Republican caucus that is the roadblock to using these tools should be the focus of policy attention today.
- While the Fed has shown better judgement than Congress in the last economic crises, the tools they currently have are too weak to spur the needed recovery. In the end, there is no good substitute for a dysfunctional Congress—and today’s dysfunction is caused by Senate Republicans who refuse to act.
The economic shock of the coronavirus is very different from the housing bubble shock that caused the Great Recession of 2008–2009. Yet six months into the current crisis, we are in danger of repeating a same key mistake: leaning too hard on the Federal Reserve to navigate the crisis while ignoring the much more important role of a bloc in Congress that is blocking needed aid. While it is true that the Fed has shown better judgement over the course of this crisis, the tools it currently has available to address it are weak. The tools Congress has are strong, but their actions have been stymied by the mystifyingly bad judgement of Senate Republicans.
The Fed is an enormously powerful institution in many ways, but their policy tools are actually quite limited for boosting the economy out of a recession or even increasing the rate of growth during recoveries. The Fed can decisively slow economic expansions, and too often in the past they have done this explicitly to weaken workers’ bargaining position and keep wage-driven pressure on prices from forming. In short, the Fed has a powerful brake but a very weak accelerator, and their use of this brake has merited much criticism in the past.
Last week 1.6 million workers applied for unemployment insurance (UI) benefits. Breaking that down: 881,000 applied for regular state unemployment insurance, and 759,000 applied for Pandemic Unemployment Assistance (PUA).
This is the fourth week in a row that total initial claims have risen. Further, last week was the 24th 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 second-worst week of the Great Recession. And remember this: 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.
There was a (mostly) positive methodological development with the release of the UI data this week—DOL changed their seasonal adjustment methodology. The way they had been doing seasonal adjustments was causing major distortions during this recession, and the change is a big improvement. One big problem, however, is that they didn’t revise prior seasonally adjusted data, which means you cannot compare seasonally adjusted numbers over time. So, remember this: It’s OK to use the seasonally adjusted numbers, but if you want to compare UI data over time, use non-seasonally-adjusted numbers.
An example of how to do it wrong: Some are saying regular state UI claims dropped by 130,000 last week (from 1.01 million to 881,000). That’s wrong because it’s comparing two seasonally adjusted numbers that were calculated using two different methods (the old way and the new way). Regular state UI claims actually ticked up by 7,600 last week, from 825,800 to 833,400 (using non-seasonally-adjusted data). Including initial PUA claims, total initial claims rose 159,000 last week, from 1.43 million to 1.59 million.
Rent was due again this week and millions of unemployed workers have now gone five weeks without the enhanced $600 unemployment insurance benefit. This benefit was a vital lifeline, and families across the country now face eviction and hunger in its absence. The drop in benefits will also make it far harder in coming months to claw back the jobs lost during the pandemic. As of the latest data, the labor market remains 12.9 million jobs below where it was in February, before the pandemic spread. And, the job gains we saw this summer slowed down remarkably in July, as a resurgence of the coronavirus re-shuttered part of the country. On Friday, the latest jobs data will tell us about the state of the labor market for August and how workers continue to fare in these difficult times.
Time and time again we learn how the recession has magnified the economic disparities many face in the U.S. labor market, whether it be by race, ethnicity, gender, age, education, or class. Women workers were disproportionately affected at the beginning of the recession with job losses in excess of their share of the workforce. In particular, Latina workers saw their unemployment rates skyrocket, exceeding 20% in March. Black workers also experienced devastating job losses, which they were less able to weather because of historical inequalities in employment, wages, incomes, and, in particular, lower levels of liquid savings to fall back on. Black workers are also more likely to be unemployed. Historically, Black workers have been less likely to receive unemployment benefits after losing a job. However, the expanded eligibility criteria included in the CARES Act has been a great equalizer in the current downturn—though these expanded criteria will cut off at the end of this year. Further, as shown in Figure A, Black men have yet to see much in the way of job gains in the recovery thus far. Young workers are also experiencing unprecedented levels of unemployment, and will likely face significant aftershocks from starting their careers at such a difficult time (more on this in a forthcoming EPI report).
The Black community has faced a long history of racial exclusion, discrimination, and inequality in the United States, causing these families to shoulder unequal economic and health burdens.
We must address anti-Blackness in our society and center Black women and their communities in our policies.
That was the resounding message from a panel of Black and brown women—leading economic and social justice experts—on creating lasting change. These women spoke in June at the Economic Policy Institute’s webinar, Rebuilding the House That Anti-Blackness Built in Our COVID Response, after the police murder of George Floyd.
Their words resonate today, as the nation continues to grapple with its history of systemic racism, inequities, and injustice, following the police shooting of Jacob Blake in Kenosha, Wisconsin.
Typically, workers strike over pay or benefits, or to protest their employer’s violation of labor law. But last week, NBA players for the Milwaukee Bucks refused to take part in a playoff game against the Orlando Magic to protest the police shooting in Kenosha, Wisconsin, of Jacob Blake, an unarmed Black man who was shot multiple times in front of his children and was subsequently handcuffed to his hospital bed. The Milwaukee Bucks players’ actions sparked a movement within the NBA and larger sports community, with athletes from the WNBA, Major League Baseball, and Major League Soccer following suit in solidarity, causing games to be postponed in their respective leagues. On an unprecedented day in sports history, these athletes showed the power of workers’ collective voice in the workplace.
Professional athletes aren’t the only workers who have banded together to make their voices heard. During the coronavirus pandemic, thousands of essential workers have utilized their right to engage in concerted activity by protesting unsafe working conditions. This was most evident in the walkouts organized by Amazon, Instacart, and Target workers, as well as the dozens of strikes organized by fast-food and delivery workers earlier this spring. Even before the pandemic, data from the Bureau of Labor Statistics showed an upsurge in major strike activity in 2018 and 2019, marking a 35-year high for the number of workers involved in a major work stoppage over a two-year period. The resurgence of strike activity in recent years has given over a million workers an active role in demanding improvements in their pay and working conditions.
Updated state unemployment data: Congress has failed to act as jobless claims remain high and workers scrape by on inadequate unemployment benefits
The most recent unemployment insurance (UI) claims data released on Thursday show that another 1.4 million people filed for UI benefits last week. For the past four weeks, workers have gone without the extra $600 in weekly UI benefits—which Senate Republicans allowed to expire—and are instead typically receiving around 40% of their pre-virus earnings. This is far too meager to sustain workers and their families through lengthy periods of joblessness.
In a largely unserious stunt, the Trump administration has issued an executive order that, at best, will slash the benefit in half to $300. On its own, this cut will cause such a huge drop in spending that it will cost 2.6 million jobs over the next year. In addition to being woefully insufficient, this aid will take many weeks to reach jobless workers, it will exclude low-wage workers, and it will only last through September with its current funding. Furthermore, it is distracting from the dire need for congressional action to strengthen UI benefits.
To give a sense of how many workers the Trump administration and Republicans in Congress are leaving behind, Figure A shows the share of workers in each state who either made it through at least the first round of state UI processing (these are known as “continued” claims) or filed initial UI claims in the following weeks. The map includes separate totals for regular UI and Pandemic Unemployment Assistance (PUA), the new program for workers who aren’t eligible for regular UI, such as gig workers.
UI claims remain historically high and the president’s executive memorandum is doing more harm than good: Congress must reinstate the extra $600
Last week 1.4 million workers applied for unemployment insurance (UI) benefits. Breaking that down: 822,000 applied for regular state unemployment insurance (not seasonally adjusted), and 608,000 applied for Pandemic Unemployment Assistance (PUA). Some headlines this morning are saying there were 1.0 million UI claims last week, but that’s not the right number to use. For one thing, it ignores PUA, the federal program that is serving millions of workers who are not eligible for regular UI, like the self-employed. It also uses seasonally adjusted data, which is distorted right now because of the way Department of Labor (DOL) does seasonal adjustments. One bit of good news is that with today’s release, DOL announced that, starting next week, they will be changing the way they do seasonal adjustments. The change should address the issues that have plagued seasonal adjustments during this pandemic.
Republicans in the Senate allowed the across-the-board $600 increase in weekly UI benefits to expire. Last week was the fourth week of unemployment in this pandemic for which recipients did not get the extra $600. That means people on UI are now forced to get by on the meager benefits that are in place without the extra payment, benefits that 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.
Earlier this month, President Trump issued a joke 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, is only available for a few weeks, and is not available at all for many. The executive memorandum is a false promise that actually does more harm than good because it diverts attention from the desperate need for the real relief that can only come through legislation.
The Way Out Through State and Local Aid: Bipartisan group of economists breaks down why local governments need aid now
If a bipartisan group of the nation’s top economists were trapped in an elevator with Republican members of Congress, what would they tell them about the need for state and local aid?
Towns across the country are already hemorrhaging red ink, and substantial federal aid is needed now in order to derail the worsening economic shock brought on by the pandemic.
That was the consensus among economists the Economic Policy Institute brought together recently to discuss the urgent need for state and local aid.
UI claims remain historically high and the president’s sham executive memorandum is doing next to nothing: Congress must reinstate the $600
Last week 1.4 million workers applied for unemployment insurance (UI) benefits. Breaking that down: 892,000 applied for regular state unemployment insurance (not seasonally adjusted), and 543,000 applied for Pandemic Unemployment Assistance (PUA). Some headlines this morning are saying there were 1.1 million UI claims last week, but that’s not the right number to use. For one thing, it ignores PUA, the federal program that is serving millions of workers who are not eligible for regular UI, like the self-employed. It also uses seasonally adjusted data, which is distorted right now because of the way Department of Labor (DOL) does seasonal adjustments.
Republicans in the Senate allowed the across-the-board $600 increase in weekly UI benefits to expire. Last week was the third week of unemployment in this pandemic for which recipients did not get the extra $600. That means people on UI are now forced to get by on the meager benefits which are in place without the extra payment, 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.
Earlier this month, President Trump issued a sham of an executive memorandum. It was purported to give recipients an additional $300 in benefits. But in reality, even this drastically reduced benefit is only available to recipients in a handful of small states, and only for a few weeks. The executive memorandum is a false promise that actually does more harm than good because it diverts attention from the desperate need for the real relief that can only come through legislation.
This is cruel, and terrible economics. 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. We remain 12.9 million jobs below where we were before the virus hit, and the unemployment rate is higher than it ever was during the Great Recession. Now isn’t the time to cut benefits that support jobs.
Cuts to unemployment benefits harm millions of workers across the country: See updated state unemployment data
The most recent unemployment insurance (UI) claims data released on Thursday show that another 1.3 million people filed for UI benefits during the week ending August 8. Huge swaths of workers in every state are relying on UI for food, rent, and basic necessities. In the face of this economic crisis, Senate Republicans let the extra $600 in weekly UI benefits expire, and now the Trump administration, in a largely unserious stunt, is proposing slashing the benefit in half to $300 through executive order. If implemented, this cut would cause such a huge drop in spending that it would cost 2.6 million jobs over the next year.
Figure A shows the share of workers in each state who either made it through at least the first round of state UI processing (these are known as “continued” claims) or filed initial UI claims in the following weeks. The map includes separate totals for regular UI and Pandemic Unemployment Assistance (PUA), the new program for workers who aren’t eligible for regular UI, such as gig workers.
The map also includes an estimated “grand total,” which includes other programs such as Pandemic Emergency Unemployment Compensation (PEUC), Extended Benefits (EB), and Short-Time Compensation (STC). The vast majority of states are reporting that more than one in 10 workers are claiming UI. Ten states and the District of Columbia report that more than one in five of their pre-pandemic labor force is now claiming UI under any of these programs. The components of this total are listed in Table 1.1
Three states had more than 1 million workers either receiving regular UI benefits or waiting for their claim to be approved: California (3.2 million), New York (1.5 million), and Texas (1.3 million). Five additional states had more than half a million workers receiving or awaiting benefits.
Millions of workers are relying on unemployment insurance benefits that are being stalled and slashed
Last week 1.3 million workers applied for unemployment insurance (UI) benefits. More specifically, 832,000 applied for regular state unemployment insurance (not seasonally adjusted), and 489,000 applied for Pandemic Unemployment Assistance (PUA). Some headlines this morning are saying there were 963,000 UI claims last week, but that’s not the right number to use. Instead, our measure includes PUA, the federal program that is supporting millions of workers who are not eligible for regular UI, such as the self-employed. We also use non- seasonally-adjusted data, because the way Department of Labor (DOL) does seasonal adjustments (which is useful in normal times) distorts the data right now.
Astonishingly high numbers of workers continue to claim UI, and we are still 12.9 million jobs short of February employment levels. And yet Senate Republicans allowed the across-the-board $600 increase in weekly UI benefits—the most effective economic policy crisis response so far—to expire.
In an unserious move of political theater, the Trump administration has proposed starting up an entirely new system of restoring wages to laid-off workers through executive order (EO). But even in its EO wish list, the Trump administration would slash the federal contribution to enhanced unemployment benefits in half, to $300. This inaction and ongoing uncertainty is causing significant economic pain for workers who have lost their jobs during the pandemic, and for their families. It also causes an administrative hassle for state agencies that have already struggled immensely to process the huge number of claims early in the pandemic and implement the new UI protections in the CARES Act. Since the states with the least stable UI systems also have the highest populations of Black and Latinx people, existing inequalities will likely deepen even further by both the cutoff of supplementary benefits and the increased chaos introduced by having presidential EOs pretend to stand in for the legislative action that is needed.
Black women workers are essential during the crisis and for the recovery but still are greatly underpaid
Black Women’s Equal Pay Day, August 13, is a day to call attention to the fact that Black women deserve equal pay but are still severely underpaid. It marks how far into 2020—seven and a half months—the average Black woman must work to make the same amount as the average non-Hispanic white man was paid in 2019. On an average hourly basis, Black women are paid just 66 cents on the dollar relative to non-Hispanic white men with the same level of education, age (a proxy for work experience), and geographic location.
While this large pay gap has always been unjust and offensive to the millions of working Black women in this country, it is especially so under the current health and economic crisis. The infographics below take a closer look at average hourly earnings of Black women and non-Hispanic white men employed in major occupations at the center of national efforts to address the public health and economic effects of COVID-19. These occupations include front-line workers in health care and essential businesses like grocery and drug stores, those who have borne the brunt of job losses in the restaurant industry, and the teachers and child care workers who are critical as the economy struggles to reopen and essential to fully reopening the economy when it is safe to do so.
- Postal workers are twice as likely to be military veterans as nonpostal workers, because veterans benefit from preferential hiring in federal jobs and many have skills sought by the Postal Service. One in five postal workers is Black, nearly double Black workers’ share of the nonpostal workforce.
- Postmaster Louis DeJoy’s recent service cuts, such as eliminating overtime and late trips, leaving mail to be delivered the next day, could harm the integrity of the November elections, which will rely heavily on mail voting.
- Rival private services like FedEx and UPS will likely gain customers from these cuts, which affect service. The beneficiaries of DeJoy’s actions will likely include low-wage “worksharing” companies that do work outsourced by the Postal Service, such as presorting and transporting bulk mail closer to its destination.
- Whereas federal law requires federal contractors in the construction and related industries to pay workers the prevailing wage—usually the area’s union wage—nothing prevents the Postal Service from contracting with companies whose only competitive advantage is paying low wages—often as a result of union-busting.
- Since the Postal Service is required to rebate the full cost savings from outsourcing to the companies doing the work, “worksharing” doesn’t even benefit the Postal Service—but workers definitely lose out.
On June 15, Trump appointed Louis DeJoy, a North Carolina businessman and Republican fundraiser, as the new Postmaster General. DeJoy has wasted no time in ordering major changes to how the United States Postal Service operates. Many have noted that the service cuts he has implemented, such as eliminating overtime and late trips, leaving mail to be delivered the next day, could harm the integrity of the November elections, which will rely heavily on mail voting, due to the pandemic. The slowdown also seems aimed at pleasing President Trump, who makes no secret of his dislike of the Postal Service, which he believes is undercharging Amazon for deliveries. Trump has also lashed out at the Washington Post, owned by Amazon CEO Jeff Bezos, for its news coverage of his administration.
DeJoy, of course, denies that he’s deliberately sabotaging the Postal Service at the behest of the president, claiming service cuts are necessary to keep the Postal Service afloat. Though social distancing measures have boosted online orders during the pandemic, the crisis has reduced the volume of paper mail, which still accounts for about two-thirds of Postal Service revenues. Since the Postal Service is self-funded and has high fixed costs associated with daily delivery and maintaining post offices, it’s an obvious candidate for the same pandemic relief offered to airlines and other businesses affected by the suspension of much economic activity. But the president and Republican-controlled Senate have resisted helping the Postal Service, not just refusing to agree to relief funds included in a House-passed bill, but even holding hostage a loan to the Postal Service in the CARES Act that was signed into law by the president.
After historically fast job growth in May and June, the jobs report for July is sure to disappoint. Because so many jobs were lost in March and April, the economy remains 14.7 million jobs short of where it was in February, and a full recovery—even with rapid growth—is many months away. As COVID-19 has spread rapidly throughout the country, various other data released since the reference period in mid-June suggest—at best—a stalled recovery. At worst, we could see job losses in July. Whichever is the case, it is clear that the bounceback in May and June is over and that the mammoth jobs gap will take years to claw back unless policy becomes much better on both the public health and economic fronts.
In this preview post, I’m going to take you on a brief foray into the data that predict a very disappointing economic performance for this week’s jobs report. First, let’s start with the weekly unemployment insurance data. As of mid-July, 34.3 million workers—or about 20% of the pre-pandemic workforce—were either on unemployment benefits or had applied and were waiting to see if they would get benefits. Although the continuation of record high levels of unemployment insurance may include some pent-up demand from the difficulty of accessing the system, there has been no measurable improvement in these unemployment insurance numbers in weeks.
Unemployment insurance claims remain historically high: Congress must reinstate the extra $600 immediately
Last week 1.6 million workers applied for unemployment insurance (UI) benefits. Breaking that down: 984,000 applied for regular state unemployment insurance (not seasonally adjusted), and 656,000 applied for Pandemic Unemployment Assistance (PUA). Some headlines this morning are saying there were 1.2 million UI claims last week, but that’s not the right number to use. For one, it ignores PUA, the federal program that is serving millions of workers who are not eligible for regular UI, like the self-employed. It also uses seasonally adjusted data, which is distorted right now because of the way Department of Labor (DOL) does seasonal adjustments.
Republicans in the Senate allowed the across-the-board $600 increase in weekly UI benefits to expire. Last week is the first week of unemployment in this pandemic that recipients will not get the extra $600 payment. That means people on UI benefits who lost their job during a global pandemic are now are forced to get by on around 40% of their pre-virus earnings, causing enormous pain.
Republicans in the Senate are proposing to (essentially) replace the $600 with a $200 weekly payment. That $400 cut in benefits is not just cruel, it’s terrible economics. These benefits are supporting a huge amount of spending by people who would otherwise have to cut back dramatically. The spending made possible by the $400 that the Senate wants to cut is supporting 3.4 million jobs. If you cut the $400, you cut those jobs. The map in Figure A shows the number of jobs that will be lost in each state if the extra $600 unemployment benefit is cut to $200.
UI claims and GDP growth are historically bad: Now is not the time to cut benefits that are supporting jobs
Last week 2 million workers applied for unemployment insurance (UI) benefits. Breaking that down: 1.2 million applied for regular state unemployment insurance (not seasonally adjusted) and 830,000 applied for Pandemic Unemployment Assistance (PUA). Many headlines this morning are saying there were 1.4 million UI claims last week, but that’s not the right number to use. For one, it ignores PUA, the federal program that is serving millions of workers who are not eligible for regular UI, like the self-employed. It also uses seasonally adjusted data, which is distorted right now because of the way the Department of Labor (DOL) does seasonal adjustments.
Last week was the 19th week in a row that unemployment claims have been more than twice the worst week of the Great Recession. If you restrict this comparison just to regular state claims—because we didn’t have PUA during the Great Recession—this is the 19th week in a row that claims are more than 1.25 times the worst week of the Great Recession.
Republicans in the Senate just allowed the across-the-board $600 increase in weekly UI benefits to expire. They are proposing to (essentially) replace it with a $200 weekly payment. That $400 cut in benefits is not just cruel, it’s terrible economics. These benefits are supporting a huge amount of spending by people who would otherwise have to cut back dramatically. The spending made possible by the $400 that the Senate wants to cut is supporting 3.4 million jobs. If you cut the $400, you cut those jobs. This map shows the number of jobs that will be lost in each state if the extra $600 unemployment benefit is cut to $200.
State and local governments have lost 1.5 million jobs since February: Federal aid to states and localities is necessary for a strong economic recovery
June’s national jobs report from the Bureau of Labor Statistics (BLS) showed that there was a 4.8 million increase in jobs, after many states reopened their economies prematurely and accelerated the spread of COVID-19. Despite this uptick in employment, there are still 14.7 million fewer jobs than before the pandemic hit. Of these losses, 1.5 million were in state and local government—a sector that disproportionately employs women and Black workers. In mid-July, BLS released their June state-level jobs report, allowing us to take a closer look at these public-sector losses across the country.
Figure A displays the percent and level change in state and local government employment and private-sector jobs over the course of this recession. In every state and the District of Columbia, with the exception of Tennessee, state and local government employment has fallen since the pandemic took hold. In nine states, more than one in 10 state and local government jobs have been lost since February: Wisconsin (-12.3%), Massachusetts (-11.9%), Connecticut (-11.4%), South Dakota (-11.3%), Hawaii (-10.8%), Minnesota (-10.6%), Illinois (-10.5%), Maine (-10.5%), and Kentucky (-10.2%). Meanwhile, California and Texas have experienced the most public-sector job losses since February: 229,000 (-9.6%) and 112,100 (-6.3%), respectively. Table 1, at the end of this post, displays the state and local employment changes from this map as well as the employment levels in February and June 2020.
These devastating job losses follow a slow and weak recovery for the state and local public sector in the aftermath of the Great Recession. Because of the pursuit of austerity at all levels of government, state and local government employment at the national level only reached its July 2008 level (the prior peak) in November 2019. Just before the pandemic, 21 states and the District of Columbia still had fewer state and local government jobs than in July 2008.