A quarter of a year in, job losses remain at historic levels: More than one in five workers are either on unemployment benefits or are waiting to get on
Last week, 2.2 million workers applied for unemployment benefits. This is the 13th week in a row—a full three months—that initial unemployment claims are more than twice the worst week of the Great Recession.
Of the 2.2 million who applied for unemployment benefits last week, 1.4 million applied for regular state unemployment insurance (UI) on a not-seasonally-adjusted basis, and 0.8 million applied for Pandemic Unemployment Assistance (PUA). PUA is the federal program for workers who are out of work because of the virus but who are not eligible for regular UI (e.g., the self-employed). At this point, only 44 states, D.C., and Puerto Rico are reporting PUA claims.
How is it that we are still seeing large numbers of initial unemployment claims now, when the May jobs report shows we added jobs? The missing piece is hiring. If there are a large number of layoffs, there can still be job growth if there is also a lot of hiring (or rehiring). In today’s gradually reopening coronavirus economy, hires (or rehires) are now outpacing job losses, but we are still seeing a huge number of people losing jobs. This means labor market “churn” is vastly greater than in normal times.
Further, some recent unemployment claims may be from people who lost their job in March or April but didn’t apply right away (perhaps because they couldn’t get through the system).
Many commentators are still reporting the cumulative number of initial regular state UI claims over the last 13 weeks as a measure of how many people are out of work because of the virus. I believe we should abandon that approach because it ignores PUA but overstates things in other ways (for example, some who were laid off and applied for UI in March or April may now be going back to work). Instead, we can calculate the total number of workers who are either on unemployment benefits, or have applied and are waiting to see if they will get benefits, in the following way:
An open letter to economic institutions in the face of #BlackLivesMatter: Addressed to our allies in the economics community
This open letter from The Sadie Collective Community was published on Medium on June 11, 2020. The Sadie Collective is the first American nonprofit organization that aims to increase the representation of Black women in economics and related fields.
This letter is about whether you will choose to stand on the right side of history as your Black colleagues are hurting. Every day we do our best to show up for work, despite understanding that COVID-19 has disproportionately impacted our communities. Additionally, over the past weeks, the proliferation of news highlighting the plight of unjust police brutality plagues us. Many of us attempt to cope with the current reality and still show up for work, an all too familiar lifestyle of double consciousness, coping with the current reality of our broader lives while showing up, always at our “best,” in the workplace. This letter is not a plea for your sympathy, but rather a call to action for allies who understand the systemic violence that has led to dozens of protests across the United States. As demonstrations and the movement at large are being undermined by white supremacists, accelerationism and senior economists, it is necessary that the field take deliberate measures to address the exclusion of Black economists.
Within our nation, systemic racism is an age-old problem, demonstrated most recently by the police killings of Breonna Taylor and George Floyd. The systemic oppression of Black people enables this form of direct violence at the hands of the police, along with countless other varieties throughout society at large. We need a vocal and action-oriented approach which shows you care that your Black colleagues do not walk through the world living in fear of how their lives are disregarded in America. We are reaching out because we are concerned with your immediate acknowledgment, coupled with meaningful action to address this issue.
Here are examples of institutions who have demonstrated a commitment to making or upholding change:
- University of Minnesota: The institution will be scaling back ties with the Minnesota Police Department who is responsible for the death of George Floyd.
- YouTube: Released a statement of concern and donated $1M in support of efforts to address issues of social injustice.
- Glossier: The platform released a statement of concern and will be donating $500K in grants to Black-owned beauty supply companies and donating $500K across organizations that are committed to combating racial injustice.
- Top Tech Companies: The linked companies have issued a statement and are being tracked. Note that the data on Black employees are not disaggregated, so for companies with a high number of Black employees, there is still much work to be done. We do recognize that acknowledgment is a step in the right direction
- National Economic Association: The organization released a statement which condemned the disproportionate use of lethal force on Black people in a way that was not just filled with platitudes but with a denunciation of injustice, maltreatment, and racism is not only policing but in the economic and social structures of the U.S. as a whole.
Updated state unemployment numbers: In 10 states, more than one in six workers are receiving or have filed for regular unemployment
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.
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 perhaps 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.
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 May 30 (these are known as “continued” claims) or filed initial regular UI claims during the weeks of May 30 or June 6. Figure A and Table 2 show the total number of workers who either made it through at least the first round of PUA processing by May 23 or filed initial PUA claims during the weeks of May 23, May 30, or June 6. We do not sum the two totals together because some states have misreported PUA claims in their initial claims data, leading to potential double counting.1
New and cumulative jobless claims by state: Unemployment insurance (UI) claims filed and numbers and shares of workers either receiving unemployment benefits or waiting for approval during the week ending June 6
State | Initial regular UI claims filed in most recent week | Total currently receiving or applied for regular UI | Regular UI as a share of labor force | Total currently receiving or applied for PUA |
---|---|---|---|---|
Alabama | 19,347 | 211,071 | 9.4% | 57,855 |
Alaska | 7,427 | 61,448 | 17.8% | 19,391 |
Arizona | 22,879 | 247,046 | 6.8% | 894,313 |
Arkansas | 9,151 | 128,906 | 9.4% | 0 |
California | 258,060 | 3,341,467 | 17.1% | 1,300,660 |
Colorado | 13,128 | 289,379 | 9.1% | 128,813 |
Connecticut | 15,279 | 300,197 | 15.6% | 54,199 |
Delaware | 2,921 | 62,098 | 12.7% | 0 |
Washington D.C. | 3,291 | 77,133 | 18.6% | 0 |
Florida | 110,520 | 1,254,775 | 12.0% | 0 |
Georgia | 134,711 | 977,160 | 19.0% | 0 |
Hawaii | 6,694 | 133,425 | 19.9% | 120,250 |
Idaho | 3,665 | 53,704 | 6.0% | 2,365 |
Illinois | 44,814 | 834,372 | 13.0% | 109,502 |
Indiana | 23,604 | 273,829 | 8.1% | 256,794 |
Iowa | 10,112 | 176,527 | 10.1% | 21,156 |
Kansas | 8,824 | 124,021 | 8.3% | 48,615 |
Kentucky | 40,536 | 280,346 | 13.5% | 0 |
Louisiana | 22,002 | 341,096 | 16.2% | 201,381 |
Maine | 3,031 | 90,444 | 13.0% | 93,193 |
Maryland | 41,104 | 310,969 | 9.5% | 234,866 |
Massachusetts | 44,732 | 639,945 | 16.7% | 1,105,114 |
Michigan | 28,504 | 910,062 | 18.4% | 1,767,907 |
Minnesota | 29,209 | 461,435 | 14.8% | 73,040 |
Mississippi | 21,021 | 196,782 | 15.4% | 74,600 |
Missouri | 18,587 | 269,277 | 8.7% | 84,860 |
Montana | 2,892 | 50,875 | 9.5% | 70,751 |
Nebraska | 4,729 | 68,801 | 6.6% | 21,238 |
Nevada | 13,200 | 350,953 | 22.5% | 477,579 |
New Hampshire | 6,055 | 114,212 | 14.7% | 0 |
New Jersey | 22,621 | 606,794 | 13.3% | 546,712 |
New Mexico | 5,913 | 119,986 | 12.5% | 51,355 |
New York | 94,348 | 1,881,352 | 19.7% | 1,303,899 |
North Carolina | 33,148 | 600,561 | 11.7% | 186,650 |
North Dakota | 2,527 | 39,418 | 9.7% | 9,014 |
Ohio | 35,474 | 581,932 | 10.0% | 554,102 |
Oklahoma | 50,397 | 260,857 | 14.1% | 4,275 |
Oregon | 23,445 | 501,756 | 23.8% | 0 |
Pennsylvania | 50,088 | 953,018 | 14.5% | 1,272,259 |
Rhode Island | 3,485 | 83,510 | 15.0% | 49,364 |
South Carolina | 22,734 | 251,486 | 10.5% | 121,961 |
South Dakota | 817 | 22,827 | 4.9% | 5,313 |
Tennessee | 21,417 | 347,419 | 10.3% | 99,535 |
Texas | 89,736 | 1,437,877 | 10.1% | 337,388 |
Utah | 5,452 | 88,494 | 5.4% | 16,385 |
Vermont | 1,560 | 47,844 | 14.1% | 12,457 |
Virginia | 30,164 | 457,579 | 10.3% | 219,996 |
Washington | 33,502 | 534,974 | 13.5% | 220,742 |
West Virginia | 4,216 | 99,883 | 12.4% | 0 |
Wisconsin | 25,731 | 306,455 | 9.9% | 16,560 |
Wyoming | 1,610 | 20,886 | 7.1% | 3,833 |
Notes: Initial claims for the week ending June 6 reflect advance state claims, not seasonally adjusted. For comparisons to the size of the labor force, we use February 2020 levels. Totals reflect the number of workers whose have made it through at least the first round of processing or are waiting for their claim to be processed.
Unless otherwise noted, the numbers in this blog post are the ones reported by the U.S. Department of Labor, which they receive from the state agencies that administer UI. While the DOL is asking states to report regular UI claims and PUA claims separately, many states appear to also be including some or all PUA claimants in their reported regular UI claims. As state agencies work to get these new programs up and running, there will likely continue to be some misreporting. Since the number of UI claims is one of the most up-to-date measures we have of labor market weakness and access to benefits, we will still be analyzing it each week as reported by DOL, but ask that you keep these caveats in mind when interpreting the data.
Source: U.S. Employment and Training Administration, Initial Claims [ICSA], retrieved from Department of Labor (DOL), https://www.dol.gov/ui/data.pdf and https://oui.doleta.gov/unemploy/claims.asp, June 11, 2020.
Three months in, the economic pain of the coronavirus pandemic continues: More than one in five workers are either on unemployment benefits or are waiting to get on
Last week, 2.2 million workers applied for unemployment benefits. This is the twelfth week in a row that initial unemployment claims are have been more than twice the worst week of the Great Recession.
Of the 2.2 million who applied for unemployment benefits last week, 1.5 million applied for regular state unemployment insurance (UI), and 0.7 million applied for Pandemic Unemployment Assistance (PUA). PUA is the federal program for workers who are out of work because of the virus but who are not eligible for regular UI (e.g., the self-employed). At this point, only 42 states and Puerto Rico are reporting PUA claims. This means PUA claims are still being undercounted.
How is it that we are seeing large numbers of initial unemployment claims now, when the jobs report from last Friday shows we added jobs in May? One key thing is the fact that the unemployment benefits numbers don’t account for changes in hiring. If there are a large number of layoffs, there can still be job growth if there is also a lot of hiring (or rehiring). Further, some unemployment claims since April may be from people who actually lost their job in March or April but didn’t apply right away (perhaps because they couldn’t get through the system).
Many commentators are still reporting the cumulative number of initial regular state UI claims over the last 12 weeks as a measure of how many people are out of work because of the virus. I believe we should abandon that approach because it ignores PUA—and is thus an understatement on that front—but overstates things in other ways (for example, some who were laid off and applied for UI in March or April may now be going back to work). Instead, we can calculate the total number of workers who are either on unemployment benefits, or have applied and are waiting to see if they will get benefits, in the following way:
Without federal aid to state and local governments, 5.3 million workers will likely lose their jobs by the end of 2021: See estimated job losses by state
Last week, EPI hosted a bipartisan panel of economists who called upon policymakers to pass significant federal aid for state and local governments in coming months. This panel’s judgement was unanimous that federal aid for subnational governments is crucial for helping the economy mount a rapid recovery from the current crisis. In this post, we highlight that:
- If policymakers do nothing at the federal level to address these shortfalls, the United States could end 2021 with 5.3 million fewer jobs, with losses in every state.
- Further, if Congress passes some level of aid that is insufficient—less than $1 trillion—they will needlessly guarantee a significant job gap by the end of 2021.
- If they pass $500 billion of aid over that time, the jobs gap will likely be roughly 2.6 million. If they pass $300 billion of aid, the jobs gap will likely be roughly 3.7 million.
- While empirical estimates of the shortfall should guide policymakers’ thinking, they can (and actually should) avoid putting a firm sticker price on state and local aid by tying this aid to economic conditions. If the economy recovers faster than the forecasts driving the $1 trillion estimated shortfall indicate will happen, then less aid would be needed. If instead recovery lagged, more would be needed.
- Finally, filling in the estimated shortfalls would merely return state and local governments to their pre-crisis fiscal status quo. But the unique features of the current economic shock will put greater demands on public services than existed before the crisis. To go beyond macroeconomic stabilization and promote the general welfare, even more federal aid to these governments is likely needed.
Because a weakening economy undercuts state and local tax revenues, and because states operate under balanced budget constraints, the coming months will see intense downward pressure on state and local spending. Reductions in this spending will in turn significantly slow recovery from the current economic crisis. This is not an abstract concern—the historically slow recovery in state and local spending following the Great Recession by itself delayed a recovery in unemployment to pre-crisis levels by four full years.
The U.S. economy remains in an enormous jobs deficit: The labor market was down 15.9 million jobs at the end of April (JOLTS data), and down 19.6 million at the middle of May (jobs data)
Quick reminders about the Job Openings and Labor Turnover Survey (JOLTS):
- JOLTS data provide information on all pieces that go into the net change in the number of jobs. These components include: hires, layoffs, voluntary quits, and other job separations (which includes retirements and worker deaths). Putting those components together reveals the overall (or net) change.
- JOLTS data provide information about the end of one month to the end of the next, whereas the monthly employment numbers provide information from the middle of one month to the middle of the next.
This morning, the Bureau of Labor Statistics (BLS) released Job Openings and Labor Turnover Survey (JOLTS) data for April, showing the second-highest number of job separations on record (March was the highest) and the lowest level of hires on record. One important thing to understand about JOLTS data is the timing. JOLTS data provide information from the end of one month to the end of the next, whereas the monthly employment numbers provide information from the middle of one month to the middle of the next. The JOLTS data showed that 6.4 million jobs were lost from the end of March to the end of April. The monthly employment numbers straddle these numbers, showing that 20.7 million jobs were lost from mid-March to mid-April, and 2.5 million jobs were gained from mid-April to mid-May. Together, the JOLTS data and the monthly employment numbers paint a picture of the peak of job loss in this recession being in late March or early April, and people beginning to go back to work by the beginning of May. But no matter how you measure it, the U.S. economy remains in an enormous jobs deficit—we were down a total of 15.9 million jobs at the end of April (according to the JOLTS data), and down a total of 19.6 million at the middle of May (according to the monthly employment data).
The Fed’s crisis response: Helping corporations, yes, but mostly at the expense of financial predators
A number of recent articles imply that Americans should be mad at the Federal Reserve for bailing out the rich in the coronavirus crisis. This seems wrong to me. We should be mad at nearly every other policymaker—mostly Congress and the president—for failing to do enough to bail out typical working families.
The Fed, conversely, has maximized the weak tools it has available right now for helping these families. Maybe we should give the Fed more and better tools for future recessions—but it’s not useful to get mad at the Fed for failing to do things it can’t do right now.
This is not to say the Fed is a force for good always and everywhere. There really are times when the Fed intervenes on the side of corporate interests in what is essentially a distributive conflict between labor and capital. (By “capital” I’m including the corporate managers who serve as corporate agents and whose rewards trade off pretty sharply against typical workers’ pay.) Usually the Fed’s intervention on behalf of capital occurs when it cuts economic expansions short by raising interest rates in the name of controlling inflation, robbing typical workers of the leverage to secure faster wage growth that really tight labor markets could give them. As we have often written, these actions by the Fed have been hugely consequential, contributing significantly to the disastrously slow wage growth for the bottom 80% of the U.S. workforce for most of the last 40 years.
However, lots of recent evidence suggests that the Fed—now recognizing how distributionally important these past episodes have been—is genuinely concerned about avoiding the kind of prematurely contractionary policies that curtail employment possibilities for traditionally disadvantaged groups and hamstring typical workers’ wage growth. This has been a huge progressive win.
Today’s Fed intervention is not part of a capital–labor conflict
By lending to and buying the debt of private businesses in response to the coronavirus crisis, the Fed is not wading into a capital–labor conflict on the wrong side. Instead, it is wading into a conflict between nonfinancial capital and financial predators.
Black deaths at the hands of law enforcement are linked to historical lynchings: U.S. counties where lynchings were more prevalent from 1877 to 1950 have more officer-involved killings
“A lynching is much more than just a murder. A murder may occur in private. A lynching is a public spectacle; it demands an audience… A lynching is a majority’s way of telling a minority population that the law cannot protect it.” — Aatish Taseer, British journalist
George Floyd’s death was more than just a murder, it was a modern-day lynching.
The agonizing similarity in the death of Floyd, Ahmaud Arbery, and Breonna Taylor, is that current and former police officers participated in their lynching. From 1877 to 1950, nearly 4,000 individuals were the victims of lynchings. Some have speculated that as many as 75% of historical lynchings “were perpetrated with the direct or indirect assistance of law enforcement personnel.” Despite drawing attention from large crowds, many perpetrators of historical lynchings were never charged with a crime—a fact seen in many modern-day officer-involved shootings.
While historical lynchings peaked more than a century ago, these racist acts can be linked to officer-involved shootings today.
Using county-level data on historical lynchings and present-day officer-involved shootings, Figure A shows that historical lynchings are positively associated with officer-involved shootings for Blacks. That is, counties that experienced a higher number of historical lynchings have larger shares of officer-involved shootings of Blacks in the last five years.
What to watch on jobs day: The unemployment rate continues to climb but not equally for all demographic groups
In April, the Bureau of Labor Statistics (BLS) reported that 20.5 million jobs were lost and the unemployment rate rose faster than ever before, hitting 14.7%, the highest unemployment rate since the Great Depression. May’s unemployment rate is expected to be far higher. Initial unemployment insurance claims suggest an excess of 10 million more people lost their jobs between mid-April and mid-May, the reference period for tomorrow’s report.
In advance of tomorrow’s jobs data from BLS, let’s take a minute to look more closely at the unemployment rate across various demographic groups and consider the extent of economic pain missed in the official count of the unemployed. Because of the use of the microdata in our calculations, the numbers in the figure below are not seasonally adjusted and therefore do not match the topline seasonally adjusted data released by BLS. The microdata, however, allow us to measure the unemployment rate and calculate the adjusted unemployment rate across a variety of groups not reported by the BLS.
The official unemployment rate is in dark blue in Figure A below. As you can see, the unemployment rate is incredibly high across the board. Except for those with an advanced degree, the unemployment rate of all groups has exceeded the highest level the overall unemployment rate hit at the height of the Great Recession, when it reached 10.0% in 2009 (and all groups have exceeded their group’s highest unemployment of the Great Recession). Even though jobs were lost across the board, the data indicate that job losses were particularly stark for black and brown workers, those who are less likely to be able to economically weather the storm. Historically higher unemployment rates and lower liquid savings make job losses even more devastating for African American workers and their families.
Release incarcerated Ohioans to flatten the coronavirus curve
Ohio Governor Mike DeWine acted quickly and decisively in March to flatten the curve of COVID-19 infections in this Midwestern state, closing schools, restaurants, and other gathering places. He also took action by postponing the March primary to slow the spread of the virus, protect vulnerable populations, and keep hospitals from being overwhelmed.
Although not without controversy, these steps appear to have kept hospitals from being overwhelmed in the early months of the pandemic. And while the death toll is still rising, its climb has not been as steep as some models had predicted.
Gov. DeWine has not given the same attention to protecting incarcerated Ohioans and the workers who guard and serve them. At the end of May, the Marshall Project reported that Ohio’s state prison system has reported more deaths of incarcerated people than any other state system in the United States and more than the federal prison system. Ohio’s system has the third-highest per capita death rate among incarcerated people, behind Michigan and New Jersey.
No matter where we live or what we look like, we all want to make sure our loved ones are safe and healthy.
That’s why it’s important to call out the governor’s lack of action to save lives in Ohio prisons, which has a potentially disproportionate impact on black Ohioans. Of the nearly 48,000 people in Ohio prisons, approximately 47% of the men and 74% of the women are black; in contrast, 12% of the state’s total population is black. Black people are disproportionately represented among corrections officers as well, making up 18% of Ohio Department of Rehabilitation and Correction (ODRC) staff in that role.