What to Watch on Jobs Day: Widespread economic pain continues in August
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).
Calling out anti-Blackness in our response to police violence and economic inequality
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.
The Milwaukee Bucks’ strike shows what’s possible when workers band together
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.
