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.

Read more

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.

Read more

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.

Read more

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.

Read more

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.

Read more

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.

Read more

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.

Read more

Trump’s war on the Postal Service helps corporate rivals at the expense of working families

Key takeaways:

  • 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.

Read more

What to watch on jobs day: A stalled recovery

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.

Read more

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.

Read more

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.

Read more

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.

Read more

Protecting workers through publicity during the pandemic

The COVID-19 pandemic has been devastating for many low-wage workers and their families. Workers are risking their health and lives, including in meatpacking plants, grocery stores, restaurants, mass transit, and health care. Black workers, in particular, are experiencing retaliation for raising COVID-19 workplace safety concerns. Millions of workers are struggling to make ends meet after being laid off and need unemployment insurance. Other workers have been deemed essential, but their employers have not provided them living wages or critical benefits like paid sick days. While federal and state laws are in place to protect and support workers during the pandemic in various ways, many workers don’t know about these laws or programs. Similarly, employers may not realize their legal obligations. Using media and strategic communication was a critical tool for labor enforcement agencies before the pandemic—and it is of even greater urgency now.

To help agencies with this aspect of their work, the Center for Law and Social Policy (CLASP) and the Harvard Law School Labor and Worklife Program released a toolkit earlier this month, Protecting Workers Through Publicity: Promoting Workplace Law Compliance Through Strategic Communication. The toolkit shares research showing that media coverage and public disclosure improves policy outcomes, in labor and other contexts. The toolkit can be used by labor enforcement agencies, as well as policymakers who care about worker issues, to help them use media effectively. It will also benefit worker advocates, who can share it with enforcers and policymakers as part of an effort to press for greater use of this underutilized vehicle for driving compliance.

Read more

The Senate’s failure to act on federal aid to state and local governments jeopardizes veterans’ jobs

Yesterday, the Republican-controlled Senate and White House rolled out the HEALS Act, which not only guts Pandemic Unemployment Assistance benefits for millions of unemployed workers, but also completely overlooks critical federal aid to state and local governments. This intentional oversight threatens vital public services just when they are needed most and could result in an additional 5.3 million public- and private-sector service workers losing their jobs by the end of 2021. More than one million veterans—13.2% of all veterans—work for state and local governments and could be severely impacted by the Senate’s failure to provide timely federal aid. Because state and local governments are extremely restricted in how they can borrow, congressional authorization for state and local fiscal support is vital to prevent deep cuts in health care and education.

Black workers, who are heavily represented in the overall public-sector workforce, are even more heavily represented in the share of state and local government workers who are veterans. While Black workers make up 12% of the private-sector and 14% of the public-sector workforces, they make up 17% of public-sector workers who are also veterans.

The map in Figure A provides a state-by-state overview of the number of veterans serving in state and local governments around the country. Table 1 provides a list of the top 10 states with the highest numbers of veterans employed by state and local governments. Table 2 provides the list of the top 10 states with the highest shares of veterans employed by state and local governments. California has the largest number of veterans working in state and local governments, while Montana has the largest share.

Read more

Congress has failed to extend additional unemployment benefits as millions of workers across the country file new UI claims

The U.S. Department of Labor (DOL) released the most recent unemployment insurance (UI) claims data last Thursday, showing that another 2.3 million people filed for UI benefits during the week ending July 18. Huge swaths of workers in every state are relying on UI for food, rent, and basic necessities. There are 14 million more unemployed workers than jobs. In the face of this economic crisis, Congress has let the extra $600 in weekly UI benefits expire, and now Senate Republicans are proposing reducing the increase to $200, which would cause such a huge drop in spending that it would cost 3.4 million jobs. These benefit cuts will directly harm the workers and their families who need these benefits to weather the pandemic and will cause further economic harm 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) and Short-Time Compensation (STC). The vast majority of states are reporting that more than one in 10 workers are claiming UI. Thirteen 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

Read more

What can we learn from the CFPB’s Spring 2020 Unified Agenda entries?

The week, Director Kathleen Kraninger of the Consumer Financial Protection Bureau (CFPB) is slated to appear before the Senate Banking Committee and the House Financial Services Committee in connection with the CFPB’s semiannual report. As we go into these hearings, it’s worth reviewing what we know about the CFPB’s current regulatory agenda. As a reminder, the CFPB is the regulator that oversees all of the consumer financial regulations in the marketplace—everything from credit cards to payday loans to mortgages to debt collection to credit reporting. If you have a bank account, a credit card, a student loan, or a mortgage, the CFPB’s rules impact you.

At the end of June, the CFPB, along with all of the other federal agencies, released its rulemaking agenda on the rulemaking that the agency plans to undertake through April 2021. As we at the Consumer Rights Regulatory Engagement and Advocacy Project (CRREA Project) discuss in Decoding the Unified Agenda, everything is in the Unified Agenda—what an agency is working on, what it plans to do next, and when it anticipates taking that next step. Rules are characterized as significant or nonsignificant, the agency contact for the rule is listed (in the CFPB’s case, this is almost always the attorney designated as the team lead on the rulemaking), and the history of the rulemaking project are all laid out.

Looking at an agency’s Unified Agenda also tells the reader something about the agency’s current priorities and rulemaking philosophy. The CFPB, in addition to its agency rule list, issues a blog post that updates the Unified Agenda to reflect what the CFPB has done between when it submitted its Unified Agenda entries and when the Unified Agenda was released. It also issues a preamble; the CFPB is unique among agencies in doing this twice a year.

Read more

Tagged

Why we still need the $600 unemployment benefit

One of the most crucial provisions of the last coronavirus relief act was to provide an extra $600 weekly increase in unemployment benefits to the tens of millions of Americans who are currently out of work. Now the White House and many Republican policymakers want to let it expire or reduce it dramatically. But that would be a terrible mistake, and here’s why.

Read more

Cutting UI benefits by $400 per week will significantly harm U.S. families, jobs, and growth: 3.4 million fewer jobs will be created over the next year as a result

Last month, we estimated the effect of allowing the $600 supplement to weekly unemployment insurance (UI) benefits to lapse at the end of July, as is currently scheduled. We found that this would strip away enough aggregate demand from the economy to slow growth in gross domestic product (GDP) by 3.7% over the next year. This slower growth would result in 5.1 million fewer jobs created over the next year.

Currently Senate Republicans are offering a proposal to reduce this weekly $600 supplement to closer to $200. This is better than allowing the $600 benefit to go all the way to zero, but this would still lead to GDP that was lower by 2.5% a year from now and would lead to 3.4 million fewer jobs created over the next year.

These are huge numbers—but they are driven by the fact that the support this extra $600 has given tens of millions of working families is huge. The economic shock of COVID-19 was enormous, but the large expansions to the UI system included in the CARES Act of March were incredibly effective in blunting the effect of this shock. The only problem with these expansions was that they begin running out next week—while the job market remains fundamentally damaged.

Read more

Joblessness remains at historic levels and there is no evidence UI is disincentivizing work: Congress must extend the extra $600 in UI benefits

Last week 2.3 million workers applied for unemployment insurance (UI) benefits. This is the 18th week in a row that unemployment claims have been more than twice the worst week of the Great Recession. 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 Pandemic Unemployment Assistance (PUA), the federal program for workers who are not eligible for regular UI, like the self-employed. It also uses seasonally adjusted data for regular state UI, which is distorted right now because of the way the Department of Labor (DOL) does seasonal adjustments.

Of the 2.3 million workers who applied for UI last week, 1.37 million applied for regular state unemployment insurance (not seasonally adjusted), and 975,000 applied for PUA.

A disaster of Congress’s making is looming for those who have lost their livelihoods during the global pandemic and are now depending on UI to provide for their families. If Congress doesn’t act immediately, the across-the-board $600 increase in weekly unemployment benefits will expire at the end of this week. That would not just be cruel, it would be terrible economics. These benefits are supporting a huge amount of spending by people who would otherwise have to cut back dramatically. That spending is supporting more than 5 million jobs. If Congress kills the $600, they kill those jobs. Figure A shows the number of jobs that will be lost in each state if the $600 is allowed to expire.

Read more

Ambitious investments in child and elder care could boost labor supply enough to support 3 million new jobs

Key takeaways:

  • Today, the Biden campaign released a plan calling for $775 billion of investments in child and elder care over the next decade, a large increase over current levels.
  • Based on our research, such an investment would support 3 million new jobs and substantially help stem the erosion of women’s labor force participation in the United States relative to our advanced country peers.
  • These public investments would provide support that makes child and elder care more affordable for families while also providing a needed boost to the pay and training of the care workforce.

It has been apparent for years that the United States could benefit enormously from a large public investment in care work—including early child care education and elder care. A substantial investment in children would lead to a more productive workforce in the future, spurring large income gains. Investments in seniors would ensure that a decent and dignified retirement is available to all, a commitment that the United States has so far failed to sustain.

Crucially, both sorts of investment would greatly expand the opportunities for working-age adults to seek paid employment. It is well documented by now that the employment rate of prime-age (between 25 and 54 years old) U.S. adults (particularly women) has stagnated relative to our advanced country peers, and it is equally as well documented that the failure to invest in child and elder care is a key reason why.

This morning, the Biden campaign released a plan calling for a broad set of investments in child and elder care. Their plan would invest $775 billion over the next decade, a large increase over current levels. Such an investment would substantially help stem the erosion of women’s labor force participation in the United States relative to our advanced country peers. In 1990, for example, women’s prime-age labor force participation in the United States ranked 7th of 24 among the advanced economies with available data from the Organisation for Economic Co-operation and Development (OECD). By 2000, the United States had slipped to 16th of 35 OECD countries, while in 2019 our ranking was 30th of 35.

Read more

Recovering fully from the coronavirus shock will require large increases in federal debt—and there’s nothing wrong with that

The economic shock of the coronavirus has been as sudden and jarring as any in U.S. history. Even if policymakers did nothing to respond to it, the income losses generated by the shock and the automatic expansion of some safety net programs would have led to large increases in the federal budget deficit. But the correct policy response to a shock like the coronavirus is to push deficits even larger than they would go on their own by providing expansions to relief and recovery efforts.

As always, there are some who seem more concerned about the rise in federal budget deficits and public debt than by the rise in joblessness and losses of income generated by the shock. But prioritizing the restraint of debt in coming years over the restoration of pre-crisis unemployment rates is bad economics.

We must prioritize the restoration of pre-crisis unemployment rates over restraint of debt. Anything else is bad economics.

Joblessness and income losses in the wake of the coronavirus shock really are large enough to spark an economic depression that lasts for years. A rising ratio of debt to gross domestic product (GDP), on the other hand, will be mostly meaningless to living standards in the next few years. If baseless fears about the effects of adding to debt block this effective response, then it will cause catastrophic economic losses and human misery. It is often said that economics is about making optimal decisions in the face of scarcity. But we need to be clear what is and what is not scarce in the U.S. economy. The federal government’s fiscal resources—its ability to spend more and finance the spending with either taxes or debt—are not scarce at all. What is scarce is private demand for spending more on goods and services. We need to use policy to address what is scarce—private spending—with what is not.

In this blog post I attempt to answer a few of the many questions I hear about the deficit and debt in light of the current economic crisis. We have created an ongoing web feature here to answer these questions and new questions that come up. A common root to the answers of many questions about the effects of deficits and debt concerns whether the economy’s growth is demand-constrained or whether it is supply-constrained (i.e., at full employment). Because this distinction is so important to so many questions about deficits and debt, we provide this background first.

Read more

Joblessness remains at historic levels: The extra $600 in UI benefits expires next week—Congress must extend it

Last week, 2.4 million workers applied for unemployment insurance (UI) benefits. This is the 17th week in a row that unemployment claims have been more than twice the worst week of the Great Recession. Of the 2.4 million workers who applied for UI, 1.5 million applied for regular state unemployment insurance (not seasonally adjusted), and 0.9 million applied for Pandemic Unemployment Assistance (PUA).

Many headlines this morning are saying there were 1.3 million UI claims last week, but that’s not the right number to use. For one, it ignores PUA, the federal program for workers who are not eligible for regular UI, like gig workers. It also uses seasonally adjusted data for regular state UI, which is distorted right now because of the way Department of Labor (DOL) does seasonal adjustments.

Before I cover more of the details of today’s UI release, I want to take a moment to note that the across-the-board $600 increase in weekly unemployment benefits is set to expire next week.

Many are talking about the potential work disincentive of the extra $600, since the additional payment means many people have higher income on unemployment insurance than they did in their prior job. The concern about the disincentive effect has been massively overblown. First, it ignores the realities of the labor market for working people, who will be unlikely to turn down a permanent job—particularly in a time of extended high unemployment—for a temporary boost in benefits.

Read more

Extending the $600 weekly unemployment boost would support millions of workers: See updated state unemployment data

The U.S. Department of Labor (DOL) released the most recent unemployment insurance (UI) claims data yesterday, showing that another 1.4 million people filed for regular UI benefits last week (not seasonally adjusted) and 1.0 million for Pandemic Unemployment Assistance (PUA), the new program for workers who aren’t eligible for regular UI, such as gig workers. As of last week, more than 35 million people in the workforce are either receiving or have recently applied for unemployment benefits—regular or PUA.

Figure A and Table 1 show the total number of workers who either made it through at least the first round of regular state UI processing as of June 27 (these are known as “continued” claims) or filed initial regular UI claims during the week ending July 4. Three states had more than one million workers either receiving regular UI benefits or waiting for their claim to be approved: California (3.1 million), New York (1.7 million), and Texas (1.4 million). Seven additional states had more than half a million workers receiving or awaiting benefits.

While the largest U.S. states unsurprisingly have the highest numbers of UI claimants, some smaller states have larger shares of the workforce filing for unemployment. Figure A and Table 1 also show the numbers of workers in each state who are receiving or waiting for regular UI benefits as a share of the pre-pandemic labor force in February 2020. In four states and the District of Columbia, more than one in six workers are receiving regular UI benefits or waiting on their claim to be approved: Hawaii (19.7%), Nevada (19.3%), New York (17.8%), District of Columbia (17.6%), and Oregon (17.0%).

Read more

Cuts to the state and local public sector will disproportionately harm women and Black workers

The coronavirus pandemic has created a severe budget crisis for state and local governments, as tax revenue has fallen precipitously at the same time that governments are facing extraordinary demands for public health and welfare supports. Because states are severely limited in how they can borrow, the only way to address this crisis is through Congress authorizing significant additional fiscal support to state and local governments. Without federal aid, many states will likely make devastating cuts to the services and staffing they provide, sending the country into a prolonged depression with 5.3 million jobs both public and private likely lost before the end of next year.

Failing to provide aid to state and local governments would be not only be an act of needless economic self-sabotage, it would also exacerbate racial and gender disparities. If state and local governments are forced to cut personnel, those cuts are likely to fall hardest on women and Black workers.

Historically, the public sector has been a key employer for women and people of color. During the Civil Rights era of the 1960s and 1970s, the federal government—through executive actions and legislation—adopted various anti-discrimination and affirmative action measures that boosted the employment of women and Black workers in government. Now, decades later, all state and local government jobs are subject to the federal regulations requiring equal opportunity, and some states and localities have additional affirmative action programs. Consequently, state and local government has generally achieved a more diverse workplace than the private sector.

Read more

Almost four months in, joblessness remains at historic levels: Congress must extend the extra $600 in UI benefits, which expires in a little more than two weeks

Last week, 2.4 million workers applied for unemployment insurance (UI) benefits. This is the 16th week in a row that unemployment claims have been more than twice the worst week of the Great Recession. Of the 2.4 million workers who applied for UI, 1.4 million applied for regular state unemployment insurance (not seasonally adjusted), and 1.0 million applied for Pandemic Unemployment Assistance (PUA). PUA is the federal program for workers who are not eligible for regular unemployment insurance (UI), like gig workers. It took some time, but all states except New Hampshire and West Virginia are now reporting PUA claims.

It’s important to note that some initial claims from last week are likely from people who got laid off prior to last week but either waited until last week to file a claim, or applied earlier and their application had been caught in an agency backlog. Why do I think that’s likely? In May, there were more than 8 million initial claims in regular state UI programs, but last week’s Job Opening and Labor Turnover Survey (JOLTS) data show there were only 1.8 million layoffs, which is back to pre-virus levels. This suggests many May UI claims were from earlier layoffs, and that dynamic is likely still in play.

Figure A shows continuing claims in all programs over time (the latest data are for June 20). Continuing claims are more than 31 million above where they were a year ago. 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. The number of people on PEUC can be expected to grow dramatically as the crisis drags on and more and more of the nearly 17 million people currently on regular state benefits exhaust their regular benefits and move on to PEUC.

Read more

Hires up, layoffs down but more economic pain is on the horizon: Policymakers must act in order to protect workers’ health and economic well-being

Last week, the Bureau of Labor Statistics (BLS) reported that, as of the middle of June, the economy was still 14.7 million jobs below where it was in February. Today’s BLS Job Openings and Labor Turnover Survey (JOLTS) reports that the labor market was down 13.1 million jobs at the end of May. The labor market began picking up in May, and more so in June, as states began relaxing their stay-at-home orders. Congress’s aid to workers and households also helped to boost demand and spending. Unfortunately, what’s clear from the latest coronavirus data is that the relaxed restrictions on social distancing also had the effect of increased cases and subsequent re-shuttering in certain parts of the country.

Today’s data show that at the end of May, the number of hires increased by 2.4 million to a series high of 6.5 million—the largest monthly increase and largest number of hires on record (series began in 2000). The hires rate also rebounded significantly to 4.9%, the highest rate on record. At the same time, layoffs dropped considerably to 1.8 million, consistent with the average number of layoffs in the pre-coronavirus period. This is a significant fall off from previous months. In April and May, layoffs totaled 19.2 million. Further, 1.8 million layoffs is much lower than the initial unemployment insurance (UI) claims we saw in May. In May, there were more than 8 million initial UI claims in regular state programs. This suggests that a significant share of the initial UI claims in May were from layoffs in March or April—people either waited until May to file claims, or state agencies were working through backlogs of claims.

Unfortunately, there are more recent indicators that layoffs are going to pick up again as people are being laid off for the second time, and hires will likely slow as well.

Read more

What to watch on jobs day: A false start to the recovery

The latest jobs data for June released this Thursday will likely show some improvements in the labor market. We should remember that these improvements come at a cost: increased spread of COVID-19. In the states that have lifted restrictions ahead of others, there are measurable increases in coronavirus cases. Given the likelihood that states may have to re-shutter parts of their economies with the rise in cases, the job gains we saw last month may not last. So even if we continue to see job gains in this week’s jobs report, the losses this spring were mammoth and, given recent trends on the health front plus the upcoming fiscal cliff, the economic pain will certainly be long lasting.

On Thursday morning, we will also get the latest data on unemployment insurance claims for the week ending June 27. Later that day the Congressional Budget Office will be releasing their economic forecasts, which provide their estimates of future economic growth and the unemployment rate, among other key economic indicators. (At the end of the blog post, I list reminders on what information we get from each labor market data release.) Unfortunately, these releases will show enormous economic hardship that will last for a long time.

As I see it, policymakers have three primary objectives with regard to the labor market: First, make sure those who have to go to work are given adequate compensation and a safe work environment, which means, at a minimum, guaranteeing health and safety protections for workers so that they are able to protect themselves and members of their families from contracting COVID. Second, make it possible for workers who are unable to find a safe job to stay home without becoming financially devastated by delivering sufficient earnings replacement through the unemployment insurance system. Third, ensure the economy can fully recover when we get on the other side of the pandemic.

Read more

Nearly 11% of the workforce is out of work with no reasonable chance of getting called back to a prior job

Key takeaways:

  • In May, the official unemployment rate was 13.3%. However, the unemployment rate that takes into account all those who are out of work as a result of the virus was 19.7%, and the unemployment rate that includes only those who are out of work and don’t have a reasonable chance of being called back to a prior job was 10.7%.
    • The official unemployment rate was 13.3% in May. However, if you consider not just the 21.0 million officially unemployed, but all 32.5 million workers who are either officially unemployed or otherwise out of work as a result of the virus, that jumps to 19.7%. That is nearly one in five workers.
    • Of the 32.5 million workers who are either officially unemployed or otherwise out of work because of the virus, 11.9 million workers, or 7.2% of the workforce, are out of work with no hope of being called back to a prior job; 5.7 million workers, or 3.5% of the workforce, are out of work and expect to get called back to a prior job but likely will not; and 14.8 million workers, or 9.0% of the workforce, are out of work and can reasonably expect to be called back. That means the share of the workforce that is out of work and has no reasonable chance of being called back to a prior job is 10.7% (7.2% + 3.5%).
  • All three of these unemployment rates are extremely elevated across all demographic groups. However, the highest rates are found among Black and brown workers, women, and particularly Hispanic, Asian, and Black women. Young workers and workers with lower levels of education have also been hit disproportionately hard.
  • It is important to note that the prospect of even those who can reasonably expect to be called back to a prior job actually getting called back will require Congress to act. For example, if Congress doesn’t extend the extra $600 in weekly unemployment insurance payments, that will cost us 5.1 million jobs over the next year, and if it doesn’t provide fiscal aid to state and local governments to fill in their budget shortfalls, it will cost another 5.3 million jobs by the end of 2021.

Read more

Expanded unemployment insurance continues to be a crucial lifeline for millions of workers: See updated state unemployment data

The U.S. Department of Labor (DOL) released the most recent unemployment insurance (UI) claims data yesterday, showing that another 1.5 million people filed for regular UI benefits last week (not seasonally adjusted) and 0.7 million for Pandemic Unemployment Assistance (PUA), the new program for workers who aren’t eligible for regular UI, such as gig workers. As we look at the aggregate measures of economic harm, it is important to remember that this recession is deepening racial inequalities. Black communities are suffering more from this pandemic—both physically and economically—as a result of, and in addition to, systemic racism and violence. Both Black and Hispanic workers are more likely than white workers to be worried about exposure to coronavirus at work and bringing it home to their families. These communities, and Black women in particular, should be centered in policy solutions.

As of last week, more than one in five people in the workforce are either receiving or have recently applied for unemployment benefits—regular or PUA. These benefits are a critical lifeline that help workers make ends meet while practicing the necessary social distancing to stop the spread of coronavirus. In fact, the $600 increase in weekly UI benefits was likely the most effective measure in the CARES Act for insulating workers from economic harm and jump-starting an eventual economic rebound, and it should be extended past July.

To be clear, our top priority right now should be protecting the health and safety of workers and our broader communities. To accomplish this, we should be paying workers to stay home when possible, whether that means working from home some or all of the time, using paid leave, or claiming UI benefits. When workers are providing absolutely essential services, they must have access to adequate personal protective equipment (PPE) and paid sick leave.

Read more

Cutting off the $600 boost to unemployment benefits would be both cruel and bad economics: New personal income data show just how steep the coming fiscal cliff will be

Key takeaways:

  • The Bureau of Economic Analysis (BEA) released data today on personal income showing that the extra $600 in weekly unemployment insurance (UI) benefits—set to expire at the end of July—boosted incomes by $842 billion in May (expressed at an annualized rate).
  • We estimate that extending the $600 UI benefits through the middle of 2021 would provide an average quarterly boost to gross domestic product (GDP) of 3.7% and employment of 5.1 million workers.
  • The economy’s growth will continue to be tightly constrained by insufficient demand for goods and services, and cutting off a policy support that helps households maintain spending is a terrible idea, both for these households’ welfare and for macroeconomic stabilization.

Congress passed the CARES Act in March to provide relief and recovery from the economic effects of the coronavirus. By far the best part of the CARES Act was a significant expansion of the unemployment insurance (UI) system, which included a $600 per week boost to UI benefits. Congress settled on a flat $600 top-up to weekly benefits because the antiquated state UI administrative capacity could not handle more tailored ways to increase UI benefit generosity, and giving everybody an extra $600 guaranteed that most workers would receive at least as much in UI benefits as they did from their previous employment.

In normal times, economists and policymakers have focused a lot of attention (almost surely too much) on the incentive effects of UI benefits. If these benefits were too generous, the worry was that this would blunt workers’ incentives to actively search for new jobs. The negative economic impacts of these incentive effects have always been exaggerated, but these effects become truly trivial during times when the economy’s growth is clearly constrained by insufficient aggregate demand (spending by households, businesses, and governments).

When growth is demand-constrained, there are more potential workers than available jobs, so hounding these potential workers into more intense job-searching by making UI benefits less generous doesn’t result in more jobs being created, it just results in more frustrated job searches. This logic became even more compelling during the first phase of the economic collapse caused by the coronavirus. Not only were there not enough jobs to employ willing workers, for public health reasons we didn’t want enough jobs to employ these workers, as the shutdown in economic activity and employment was the point of lockdown measures. Even as official lockdowns ease in coming months (often prematurely), jobs will be sharply constrained by demand, not workers’ incentives.

Read more