The CARES Act, the $2 trillion-plus package to provide economic relief and recovery from the coronavirus shock in early April was, for many reasons, deeply imperfect. But the modifications the CARES Act made to the nation’s unemployment insurance (UI) system are an utterly crucial lifeline for tens of millions of American workers. Besides temporarily expanding the eligibility criteria for who qualifies for unemployment benefits through the end of the year and providing an additional 13 weeks of state UI benefits, the CARES Act also provided an extra $600 per week in UI payments through the end of July.

This $600 top-up has been fiercely criticized by some since the Act passed—e.g., Senator Lindsey Graham (R-S.C.) stated that it would be extended past July only “over our dead bodies”—but the criticism is either ill-informed or in bad faith. The extra $600 has been by far the most effective part our economic policy response to the coronavirus shock. It is likely improving—not degrading—labor market efficiency, and we should build on this and make the nation’s unemployment insurance system well-resourced and far more generous even in normal times.

The history of how a flat $600 in additional UI benefits was agreed upon by policymakers is straightforward, if depressing. In normal times, these benefits are stingy, typically replacing between one-third and one-half of a typical worker’s weekly wage. For decades, too many economists and policymakers have labored under a number of wrong preconceptions about the labor market, and one of the most damaging was that decent jobs were plentiful and easy to get, and the only thing keeping potential workers out of these jobs for any stretch of time was workers’ own motivation, which could be sapped if benefits were too generous. It was the old and dumb idea that the U.S. social safety net—despite being by far the stingiest in the advanced world—had become a too-comfortable “hammock.” (For what it’s worth, the evidence from the aftermath of the Great Recession reveals that extended UI benefits had little or no effect on whether a worker found a job—meaning it wasn’t UI benefits that were keeping workers out of work—it was a lack of demand for workers.)

The economic shock of the coronavirus was an event so obviously unrelated to the motivations of individual workers that policymakers were willing to substantially (if temporarily) increase the generosity of unemployment benefits. Our preference would have been for a 100% replacement rate up to a quite generous maximum benefit. But decades of disinvestment in the administrative capacity of state UI offices left them incapable of flexibly calculating each new applicant’s benefit amount with a 100% replacement rate. (Case in point: most offices are still using the 1970s-era programming language COBOL to run their computers). State offices are capable of administering a flat-rate increase, however. So, policymakers in Congress came up with a smart and compassionate second-best solution of picking a flat-rate boost to benefits that would leave the average worker (and most workers overall) with 100% of their pre-crisis earnings.

But the necessity of the one-size-fits-all approach means that workers who earned less than the average worker before the crisis will receive benefits that are somewhat higher than 100% of their previous wage. Many conservatives claim this is somehow an economic disaster. They’re wrong—it’s actually great.

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As I awoke today, preparing myself for another workday by listening to music, one of my favorite songs “Foldin Clothes” by J. Cole had me “feeling like best version of me so happy,” just one of the great lyrics from the rap song.

Why was I so happy? I got an email from the D.C. Board of Elections describing voting procedures that were much easier than in my home state of Louisiana, which recently passed an election plan that limits who has access to mail-in ballots. The email invited me, a new resident to Washington, to request a mail-in ballot for the 2020 election cycle which could be done one of six ways: online, email, fax, mail, phone, or in person.

Anyone who knows me knows I love to talk about voting. My dissertation examined the history of voting in America, including how the ghosts of lynchings still suppress the black vote in this country today. With all that’s going on to suppress minorities from voting—most recently the outrage of the Supreme Court’s refusal to extend the deadline for mail-in voting in Wisconsin in the middle of the pandemic—it’s been exhausting to keep beating the voting rights drum.

Every time I mention the importance of updating our voting methods, I am met with opposition. “You want people to vote by mail?! ONLINE?! There is no way it can be done securely,” many say. Regardless of the evidence I’ve provided that it has already been done securely in several states, people still resist the idea of adding more voting options nationally.

Well, turns out it’s not that difficult after all. D.C., which has had its own voting issues, is trying to make the process easier.

So, I’m dedicating “Foldin Clothes” to the D.C. elections leadership because they’re “doing the right thing.” I was able to download the Vote 4 DC app and it “felt so much better than doing the wrong thing” of not using the latest technology to make voting more accessible. To my surprise, this app allowed me to request a mail-in-ballot in less than two minutes! Having several options to request a ballot, including online options, “saved me some time and alleviated stress from my mind” of having to vote in person during a pandemic.

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These estimates were updated on May 14, 2020. See the updated estimates.

Since the economic fallout of the coronavirus shock began in early March, the number of workers laid-off or furloughed—as measured by new claims for unemployment insurance (UI)—has skyrocketed. We have used data from states that track UI claims by industry to get a rough estimate of how many workers are at high risk of losing their employer-provided health insurance (EPHI) over this as well.

The methodology is described in this blog post, and the underlying data (which has begun to include more and more states tracking UI claims by industry) can be found here. Table 1 below shows UI claims by industry across states that collect this data, and also shows employer-provided health insurance (EPHI) coverage rates in those industries in 2018. As of April 30, just under 28 million workers had been laid off or furloughed since early March. We find that this translates into likely EPHI losses of 12.7 million.

Because the United States is unique among rich countries in tying health insurance benefits to employment, many of the newly unemployed will suddenly face prohibitively costly insurance options. A comprehensive policy solution would be to extend Medicare and Medicaid to all those suffering job losses during the pandemic period, with the federal government funding this expansion. It has been proposed that the federal government pay for all of COBRA coverage so that workers who are laid off or furloughed may continue their employer-provided coverage. While this policy proposal will help many workers continue coverage, in some states it will not help workers from small businesses with fewer than 20 employees, who are not eligible for COBRA.

The linkage between specific jobs and the availability of health insurance is a prime source of inefficiency and inequity in the U.S. health system. It is especially terrifying for workers to lose their health insurance as a result of, and during, an ongoing pandemic.

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The number of workers applying for unemployment insurance (UI) benefits has risen to never-before-seen levels as a result of the coronavirus shock. In the last six weeks, nearly 28 million workers have applied for unemployment compensation. That is more than one in six workers, and over five times the worst period of the Great Recession.

I should note that the Department of Labor (DOL) reports that 30.3 million workers applied for UI during the last six weeks on a “seasonally adjusted” basis, compared with 27.9 million on an unadjusted basis. Seasonal adjustments are typically helpful—they are used to even out seasonal changes in claims that have nothing to do with the underlying strength or weakness of the labor market, providing a clearer picture of underlying trends. However, the way DOL does seasonal adjustments is distortionary at a time like this, so I focus on unadjusted numbers here.

All else equal, job loss of the magnitude reflected in the UI claims of the last six weeks would translate into an unemployment rate of 20.5%. It’s worth remembering that unemployment hits different racial groups differently as a result of things like occupational segregation, differences in access to educational credentials, discrimination, and other labor market disparities related to race. In our economy, in good times and bad, the white unemployment rate tends to be about 0.9 times the overall unemployment rate, and the black unemployment rate tends to be about 1.8 times the overall unemployment rate. That means that an overall unemployment rate of 20.5% would translate into a white unemployment rate of 18.4% and a black unemployment rate of 36.8%.

However, the official unemployment rates, when they are released, will likely not reflect all coronavirus-related layoffs. This is due to the fact that jobless workers are only counted as unemployed if they are available to work and actively seeking work. That means many workers who lose their job as a result of the virus will be counted as dropping out of the labor force instead of as unemployed, because they are unable to search for work due to the lockdown, or because they are not available to work because they are, for example, caring for children whose day care has closed. March data suggest that roughly half of workers who are out of work as a result of the virus will be counted as unemployed, and half are being counted as dropping out of the labor force.

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In response to the coronavirus, Congress has passed a series of bills allocating more than $2 trillion to relief and recovery programs. However, these measures have been insufficient in scope and magnitude to address the severity of the economic and public health crisis we are experiencing. Further, lawmakers have failed to include key provisions that would address the needs of working families in this crisis. As a result of these policy missteps, the relief and recovery measures have not done nearly enough to mitigate the level of pain working people are experiencing or to ensure that the economy can get back on track after the shutdown period is over. It is critical that Congress correct its failures in future relief packages. The Congressional Budget Office (CBO) projects that without additional relief, the unemployment rate will average 16% in the third quarter of this year. As a point of comparison, the highest the unemployment rate reached in the Great Recession was 10%, and it reached that level for only one month. CBO projects that without additional relief, the unemployment rate will average 10.1% for the entire calendar year 2021.

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