Unemployment insurance claims continue to climb: Congress must pass a stimulus package to prevent millions of people from being left with nothing
Another 1.3 million people applied for Unemployment Insurance (UI) benefits last week, including 885,000 people who applied for regular state UI and 455,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.3 million who applied for UI last week was an increase of 63,000 from the prior week. This was the second week in a row of increases, and initial claims are now back to their highest point since September. Layoffs are rising as the COVID-19 virus surges and demand weakens. And, last week was the 39th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were greater than the second-worst week of the Great Recession.)
Most states provide 26 weeks (six months) of regular benefits. Given the length of this crisis, many workers have exhausted their regular state UI benefits. In the most recent data, continuing claims for regular state UI dropped by 273,000. For now, after an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of regular state UI. However, PEUC is not rising as fast as continuing claims for regular state UI are dropping. Why? Many of the roughly 2 million workers who were on UI before the recession began, or who are in states with less than the standard 26 weeks of regular state benefits, are now exhausting PEUC benefits, at the same time others are taking it up. The Department of Labor reports that nearly 2 million workers have exhausted PEUC so far—and that is a vast undercount because many states have not yet reported PEUC exhaustions past October (see column C43 in form ETA 5159 for PEUC here).
In some states, if workers exhaust PEUC, they can get on yet another program, Extended Benefits (EB). However, in the latest data, just 694,000 workers were on EB. That’s likely less than a third of those who have exhausted PEUC. Most are left with nothing.
State attorneys general taking on protection of workers’ rights
State attorneys general (AGs) have been getting more and more involved in defending workers’ rights, including bringing wage theft cases, suing companies such as Uber and Lyft for misclassification, and fighting noncompete and no-poach agreements.
State AGs’ evolving labor-enforcement role was the topic of the “State Attorneys General as Protectors of Workers’ Rights” webinar hosted by the Economic Policy Institute and the Harvard Law School Labor and Worklife Program on December 3, 2020, which included insights from bureau, division, and section chiefs who lead labor rights work in their state attorneys general offices.
The panelists talked about some of their cases and shared thoughts about how state AGs select cases, how they decide whether to proceed civilly or with a criminal prosecution, and how they’ve worked, sometimes behind the scenes, to safeguard workplace safety and health during the pandemic. The webinar followed up on an August report on this topic issued by EPI and the Harvard Labor and Worklife Program.
Top five EPI blog posts of 2020
In 2020, we saw fissures of inequality become chasms, while aging unemployment systems shut workers out. Education was turned upside down—and we gained new respect for teachers.
We also saw unimaginable job losses, and this past spring our blog post predicting tens of millions of workers would be impacted by the pandemic got a lot of reader attention.
Here’s a countdown of the five most-read EPI blog posts in 2020.
The Biden administration can reverse much of Trump’s bad labor policy without Congress
For the last four years, at every turn, the Trump administration systematically promoted the interests of corporations and shareholders over those of working people. Through a series of executive orders and agency regulations, the Trump administration attacked workers’ health and safety, wages, and collective bargaining rights. It is critical that the Biden administration work from day one to reverse these actions and strengthen workers’ rights. Here, we review the Trump administration’s anti-worker executive and regulatory actions and chart a course for the new administration to address these harmful actions.
Top 10 EPI reports of 2020
Staying safe. Educating our children. Having a say in workplace conditions. Fighting for fair wages when systemic racism, consolidated wealth, and corporate power thwart opportunity.
These concerns were top of mind for our readers in 2020, according to our compilation of EPI’s most-read reports.
Unemployment claims hit highest level in months: Millions more jobs will be lost if Congress doesn’t act
Another 1.3 million people applied for UI benefits last week, including 853,000 people who applied for regular state UI and 428,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.3 million who applied for UI last week was an increase of 276,000 from the prior week, bringing initial claims back to their highest point since September. Further, last week’s increase was not just due to week-to-week volatility in the data. The four-week moving average of total initial claims is now at its highest point since October. In other words, layoffs appear to be rising, consistent with the resurgent virus. And, last week was the 38th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were greater than the second-worst week of the Great Recession.)
Most states provide 26 weeks (six months) of regular benefits, but this crisis has gone on for nearly nine months. That means many workers have exhausted their regular state UI benefits. In the most recent data, the four-week moving average of continuing claims for regular state UI dropped by 260,000 (note: the weekly number increased, but that was likely due to week-to-week volatility in the data).
The Job Openings and Labor Turnover Survey continues to show weaker levels of hires than before the recession hit: Any hope for a quick recovery is off the table unless Congress acts now
Last week, the Bureau of Labor Statistics (BLS) reported that, as of the middle of November, the economy was still 9.8 million jobs below where it was in February and job growth slowed considerably in November. Today’s BLS Job Openings and Labor Turnover Survey (JOLTS) reports little change in October, a clear and confirming sign that the recovery is not charging ahead. In fact, hiring and job openings are below where they were before the recession hit, which makes it impossible to recover anytime soon, when we have such a massive hole to fill in the labor market.
In October, job openings rose mildly (6.5 to 6.7 million) while hires softening slightly (5.9 to 5.8 million). Separations increased (4.8 to 5.1 million), largely due to an unfortunate increase in layoffs (1.4 to 1.6 million). On the whole, the U.S. economy is seeing a significantly slower pace of hiring than we experienced in May or June—hiring is roughly where it was before the recession, which is a big problem given that we have only recovered just over half of the job losses from this spring. And job openings are now substantially below where they were before the recession began (6.7 million at the end of October, compared to 7.1 million on average in the year prior to the recession). And today’s data release only covers through October, so it doesn’t even capture November’s slowdown in job growth. With hiring and job openings at these levels, the economy is facing a long slow recovery, unless Congress acts.
COVID-19 relief should extend CARES Act work-sharing provisions
With over a million new unemployment claims still being filed each week, job growth slowing, and millions of workers about to lose emergency jobless benefits created through the CARES Act in March, it is imperative that Congress enact another COVID-19 emergency relief package as quickly as possible. In addition to key provisions such as aid to state and local governments and extending the emergency benefits for unemployed workers, Congress should also extend innovative provisions that helped prevent workers from being laid off in the first place—specifically the CARES Act’s federal subsidies for work-sharing.
Work-sharing provides a way for many businesses to cope with a drop in consumer demand without having to lay off staff. Under work-sharing, workers’ hours are reduced and they receive partial unemployment insurance (UI) benefits to make up a portion of their lost wages. For example, if a business anticipated having to lay off five workers, they might instead cut in half the hours of 10 staff—achieving the same reduction in total work hours—and those 10 workers would all receive partial unemployment benefits from the state to make up some of their lost income.
By keeping workers on the job, work-sharing mitigates the impact of joblessness and reduces unemployment peaks in downturns. Now that coronavirus vaccines appear to be on the horizon, maintaining a connection between more workers and their employers for the first part of next year makes even more sense. As the pandemic is brought under control and regular consumer demand picks up, companies with work-sharing programs won’t have to go through a process of recruiting, hiring, and training new staff; they will be able to quickly ramp back up simply by restoring participants in work-sharing to full time.
The economy President-elect Biden is inheriting: More than 26 million workers—15.5% of the workforce—are being directly hurt by the coronavirus downturn
Today was, perhaps astonishingly, the last jobs report of 2020. It’s a moment to take stock of where things stand after the first 11 months of 2020 and the first 9 months of the COVID-19 economic shock.
The Bureau of Labor Statistics (BLS) reported that the official number of unemployed workers in November was 10.7 million, and the unemployment rate was 6.7%. The official number of unemployed workers, however, is a vast undercount of the number of workers being harmed. In fact, 26.1 million workers—15.5% of the workforce—are either unemployed, otherwise out of work due to the pandemic, or employed but experiencing a drop in hours and pay. Here are the missing factors:
- Some workers are being misclassified as “employed, not at work” instead of unemployed. BLS has discussed at length that there have been many workers who have been misclassified as “employed, not at work” during this pandemic who should be classified as “temporarily unemployed.” In November, there were 0.6 million such workers. (Wonky aside: Some of these workers may not have had the option of being classified as “temporarily unemployed,” meaning they weren’t technically misclassified, but all of them were out at work because of the virus.) Accounting for these workers, the unemployment rate would be 7.1%.
What to watch on jobs day: An unfortunate continued slowing recovery due to the Senate’s inaction
While the U.S. labor market remains 10 million jobs below pre-pandemic levels, job growth has slowed significantly over the last several months. Job deficits remain sharpest in leisure and hospitality, with a 3.5 million job shortfall, followed by education and health services (1.3 million), government employment (1.2 million), and professional and business services (1.1 million). The initial rebound from the 22.2 million jobs lost in March and April began strong when important relief, including vital unemployment insurance (UI) expansions were put in place. By late summer/early fall, job growth slowed significantly, and some forecasters expect it will be even slower in November. The recovery continues to wane because of the removal of important relief measures as well as the fact that the “easy” gains from workers on temporary layoffs continue to dwindle. Without further relief, millions of workers and their families will continue to endure economic hardship as the virus continues to spread in the winter months.
It didn’t have to be this way. If the suite of UI programs were reinstated and extended through 2021, workers would not lose that valuable safety net and it would spur the creation of 5.1 million more jobs in 2021. As of now, the additional UI benefits will expire on December 26, leaving 12 million workers without a safety net, and over 4 million others will have already exhausted their benefits by this cutoff. Relief and recovery efforts need to also include aid to state and local governments, which unfortunately have seen outright losses in jobs over the last couple of months due to revenue shortfalls and costly forced austerity without federal assistance.