CBO analysis confirms that a $15 minimum wage raises earnings of low-wage workers, reduces inequality, and has significant and direct fiscal effects: Large progressive redistribution of income caused by higher minimum wage leads to significant and cross-cutting fiscal effects

This post has been revised slightly as of February 12. Specifically, it refers only to a literature review by Dube (2019) on the employment effects of the minimum wage on the low-wage workforce. It also does not specifically quantify the influence that employment effect assumptions have on the Congressional Budget Office’s estimated budgetary effects, since it is not possible to do that without additional information that is not published in CBO’s report.

Today’s analysis from the Congressional Budget Office (CBO) highlights a number of things that policymakers should keep in mind as they consider minimum wage legislation in the upcoming Congress. First, the benefits of passing a significant increase in the federal minimum wage—like the Raise the Wage Act of 2021—are enormous. Today’s CBO analysis indicates that raising the federal minimum wage to $15 by 2025 would benefit 27 million workers and would lead to a 10-year increase in wages of $333 billion for the low-wage workforce—the same workforce that has borne the brunt of the COVID-19 economic shock and worked in essential jobs that have kept the economy going. In short, given which parts of the workforce have economically suffered the most from the pandemic, it seems more than appropriate to include a minimum wage increase in any relief and rescue package. Second, the federal minimum wage is a powerful policy instrument to redistribute income and bargaining power towards low-wage workers, and as a result it has very large gross fiscal effects on both federal revenue and federal spending.

In our analysis released last week, we highlighted a number of large gross changes to both spending and revenue that were likely to result from the large increase in earnings for low-wage workers if the minimum wage was significantly increased.1 In particular, we estimated that by raising earnings of low-wage workers, a $15 minimum wage by 2025 would significantly reduce spending on Supplemental Nutrition Assistance Program and the Earned Income and Child Tax Credits.2 CBO’s analysis today also estimates outlays would fall for these public assistance programs, as they predict the higher minimum wage would lift nearly 1 million people out of poverty.

CBO also estimates gross changes on the spending and the tax side of the federal budget from both the earnings increase of low-wage workers and assumptions regarding how this earnings increase is “financed.” They find large gross changes that net out to a small increase in budget deficits. These differences in emphasis and bottom-line numbers between independent analyses like ours and the CBO numbers today should not distract from the agreed-upon finding by all analyses of this issue: The effects of a significant increase in the federal minimum wage on the federal budget are large.

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The Biden rescue plan is neither risky nor a distraction from structural issues

Economist Larry Summers raised fears today that the Biden administration’s economic rescue plan might go too far, leading to economic overheating or squandering political and economic space for long-run reforms down the road. Neither of these fears are very compelling.

On the first–the danger of economic overheating–there’s not much more to add to what I and several others have already said on this: The U.S. economy has run far too-cool for decades, and this has stunted growth and deprived millions of potential job opportunities and tens of millions of potential opportunities for faster pay raises. Frequently, those worried about overheating cite current estimates from the Congressional Budget Office (CBO) of the “output gap”—the gap between income generated in today’s economy and what could be generated (or potential output) if there was no downward pressure on spending by households, businesses, and governments (aggregate demand). These current CBO estimates look relatively small compared to the Biden rescue plan’s fiscal support. But, these current estimates are almost certainly too-small. To provide just one piece of evidence—these estimates suggest that the economy was running above potential output in 2019 before COVID-19struck. But there was no evidence of overheating that year—price inflation was tame and wage growth actually decelerated.

If the vaccines take hold and there is a significant relaxation of social distancing measures in the coming year, the economic relief we’ve provided so far through this crisis and the Biden plan could combine to see the economy spring to life and generate a recovery far faster than what we’ve seen in the past few recessions. If this happens, and if the unemployment rate falls far beneath what it was in the pre-COVID period and stays below this for a few years, this will be an affirmatively good thing, not something to fear.Read more

The economy Trump handed off to President Biden: 25.5 million workers—15.0% of the workforce—hit by the coronavirus crisis in January

The official unemployment rate was 6.3% in January—matching the maximum unemployment rate of the early 2000s downturn—and the official number of unemployed workers was 10.1 million, according to the Bureau of Labor Statistics (BLS). However, these official numbers are a vast undercount of the number of workers being harmed by the weak labor market. In fact, 25.5 million workers—15.0% 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:

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The PRO Act is pro-worker: How the act would restore workers’ freedom to form a union

The Protecting the Right to Organize (PRO) Act would strengthen workers’ rights to form a union and negotiate with their employers for better wages and working conditions. Specifically, it would reform our nation’s labor law so that private-sector employers can’t perpetually stall union elections and contract negotiations and coerce and intimidate workers seeking to unionize. The PRO Act:

Gives workers more control

Under the PRO Act, workers and the National Labor Relations Board, not employers, control the timing of union elections and employers can’t force employees to attend anti-union meetings.

Imposes real penalties when employers break the law

Under the PRO Act, employers and corporate executives are penalized for illegally retaliating against workers trying to organize, and workers get monetary damages or other remedies if they are illegally fired or harmed; fired workers must also be reinstated while their cases are pending.

Creates a roadmap to a first contract

Under the PRO Act, employers and workers have a set process to follow to negotiate a first union contract, and if they can’t reach an agreement they go to binding arbitration.

Strengthens strikes

Under the PRO ACT, employers are prohibited from permanently replacing workers when they strike, and workers are no longer banned from engaging in so-called “secondary” activity, such as boycotts, seeking leverage in negotiations.

Cracks down on worker misclassification

Under the PRO Act, workers can’t be wrongly deprived of their organizing and bargaining rights by being misclassified as supervisors or independent contractors.


For more on the comprehensive set of reforms in the PRO Act, see the EPI chart “How the PRO Act Restores Workers’ Right to Unionize.”

What to watch on jobs day: The giant job deficit left by the pandemic

On Friday, the Bureau of Labor Statistics (BLS) will release its latest jobs report on the state of the labor market for January 2021. The pandemic recession has caused immense damage to the health and economic well-being of millions of people for over 10 months. The economic pain easily extends to nearly 27 million workers in the economy today, and that doesn’t include those who had lost their jobs and regained employment but got behind on their bills or those who lost loved ones and providers to illness. It is imperative that policymakers act now at the scale of the problem.

Now that the economic losses have dragged on for this long, it’s important to consider the job deficit in light of an appropriate counterfactual. The employment losses in March and April totaled 22.2 million, while the economy gained 12.5 million jobs between May and November. In the figure below, note the significant slow down in job growth in each successive month since June. Then, in December, the U.S. economy experienced a loss of 140,000 jobs. Given low actual seasonal hiring in the pandemic, seasonal adjustments made the December numbers look worse than they really were and will make the January numbers look better than they were. The average job change in December and January will provide a better sense of current labor market momentum. Setting that issue aside, it’s clear that the labor market was down 9.8 million jobs between February and December.Read more

Unemployment claims topped 1.1 million last week: Congress must pass bold relief measures to keep crucial programs from expiring

Another 1.1 million people applied for unemployment insurance (UI) benefits last week, including 779,000 people who applied for regular state UI and 349,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.1 million who applied for UI last week was a decrease of 88,000 from the prior week, but the four-week moving average of total initial claims ticked up by 51,000—back to where it was in mid-October.

Last week was the 46th 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 still greater than the third-worst week of the Great Recession.) I should note that throughout this post I use seasonally adjusted data where I can, but for comparisons to the Great Recession I use not-seasonally-adjusted data, since the Department of Labor (DOL)’s improved seasonal adjustments aren’t available before the week ending August 29, 2020.

Most states provide just 26 weeks of regular benefits, meaning many workers are exhausting their regular state UI benefits. In the most recent data (the week ending January 23), continuing claims for regular state benefits dropped by 193,000. After a worker exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 24 weeks of regular state UI (the December COVID-19 relief bill increased the number of weeks of PEUC eligibility by 11, from 13 to 24).Read more

Learning during the pandemic: Making social and emotional learning front and center

The prolonged school lockdowns that, starting in early spring of 2020, dismantled children’s routines, including normal school days, also blocked their access to the basic supports that schools provide—including organized recreation, and, of course, the face-to-face contact with teachers and friends that is fundamental to child development. It thus should be no surprise that the pandemic has not only led to reduced student performance, on average, but also stretched to the limit children’s social and emotional wellbeing.

What, in education policy and practice, we call “social and emotional learning” (SEL) has long been known to be important for student development and academic success, but the pandemic has emphasized the need to elevate its importance. Indeed, as the pandemic unfolded, it was clear that SEL, or children’s “patterns of thoughts, feelings, and behaviors,” are at least as critical as other traditional academic competencies. We saw that empathy, resilience, and the ability to cope with anxiety, turned out to have major impacts on children’s daily lives, and must be emphasized along with algebra, history, social sciences, or foreign languages.

There is a threefold explanation—that contains the good, bad, and ugly— as to why and how the pandemic has highlighted that need, and as to which lessons education policy can learn as we move forward.

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1.3 million people applied for unemployment insurance last week: Policymakers must pass crucial relief and recovery measures

This morning the Department of Labor (DOL) released the first official economic data collected during the Biden presidency—initial unemployment insurance claims from last week (well, half of last week was in the Biden presidency). What it shows is that Biden inherited an extremely weak labor market.

Another 1.3 million people applied for unemployment insurance (UI) benefits last week, including 847,000 people who applied for regular state UI and 427,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.3 million who applied for UI last week was a decrease of 87,000 from the prior week, but the four-week moving average of total initial claims ticked up by 45,000. The four-week moving average of total initial claims has risen back to roughly where it was in mid-October.

Last week was the 45th 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 still greater than the second-worst week of the Great Recession.) I should note that throughout this post I use seasonally adjusted data where I can, but for comparisons to the Great Recession I use not-seasonally-adjusted data, since DOL’s improved seasonal adjustments aren’t available before the week ending Aug. 29, 2020.

Most states provide just 26 weeks of regular benefits, meaning many workers are exhausting their regular state UI benefits. In the most recent data (the week ending Jan. 16), continuing claims for regular state benefits dropped by 203,000. After a worker exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 24 weeks of regular state UI (the December COVID-19 relief bill increased the number of weeks of PEUC eligibility by 11, from 13 to 24).

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President Biden inherits a weak labor market due to inadequate COVID-19 response: Biden and Congress must make stimulus its first priority

This morning, the Department of Labor (DOL) released some of the last unemployment insurance (UI) claims data of the Trump era. That means this release helps us understand the economy President Biden just inherited. Here’s what it shows.

Another 1.3 million people applied for UI benefits last week, including 900,000 people who applied for regular state UI and 424,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.3 million who applied for UI last week was an increase of 113,000 from the prior week. The increase underscores that layoffs are increasing as the virus surges. The four-week moving average of total initial claims is now back to where it was in mid-October.

Last week was the 44th 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 still greater than the worst week of the Great Recession.) I should note that throughout this post I use seasonally adjusted data where I can, but for comparisons to the Great Recession I use not-seasonally-adjusted data, since DOL’s improved seasonal adjustments aren’t available before the week ending August 29, 2020.

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Martin Luther King called for leaders with ‘sound integrity’

Two weeks ago, the 117th Congress was sworn in. In two days, Joseph R. Biden Jr. will take the oath of office and become the 46th president of the United States. Between these two pivotal moments, with our nation’s leaders entering office during turbulent times, it is fitting to reflect on what Rev. Dr. Martin Luther King Jr.—a leader among leaders, whose legacy we celebrate today—had to say about leadership.

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The U.S. economy could use some ‘overheating’: Biden’s relief and recovery plan meets the scale of the economic crisis

Key takeaways:

  • President-elect Biden’s recently announced relief and recovery plan is highly unlikely to cause economic “overheating”—and it would be a sign of its success if it did.
  • Economic “overheating” generally means large and prolonged increase in inflation and/or interest rates, but the U.S. economy has run far “too cold” for decades, largely due to the enormous rise in income inequality redistributing income to richer households that save most of their income. Unless inequality is substantially reversed, economic overheating is highly unlikely.
  • Even when the unemployment rate was 3.7% in 2019, there was no sign at all of economic overheating. Any relief and recovery plan would have to push the unemployment far beneath this for an extended period of time before any real overheating could happen.
  • Common metrics that deficit hawks often point to as evidence of economic overheating are not convincing.
    • The debt service burden is actually historically low in recent years due to the too-cold economy of recent decades.
    • The overall ratio of federal debt to GDP would actually likely be lower years from now if Congress passed the Biden plan, because such plans would increase GDP.

Recent proposals for large-scale fiscal relief and recovery from the economic effects of COVID-19 have drawn criticism that they could lead to “overheating” of the U.S. economy. These criticisms should be ignored. Proposals under discussion—including Biden’s economic plan introduced tonight—are highly unlikely to lead to any durable uptick in inflation or interest rates (the normal indicators of “overheating”) and even if they did, these higher interest rates and inflation would be a welcome sign of economic healing, not something to worry about.

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Unemployment claims increase as COVID-19 surges

Another 1.2 million people applied for Unemployment Insurance (UI) benefits last week, including 965,000 people who applied for regular state UI and 284,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.2 million who applied for UI last week was an increase of 304,000 from the prior week. The increase was due in part to data volatility during a messy time for UI data—the holidays, the President delaying signing the relief bill until the day after the pandemic programs expired—but the 181,000 rise in seasonally adjusted regular state claims suggests layoffs are increasing as the COVID-19 pandemic surges.

Last week was the 43rd 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 still greater than the worst week of the Great Recession.)

Most states provide just 26 weeks of regular benefits, so many workers are exhausting their regular state UI benefits. In the most recent data, however, continuing claims for regular state UI rose by 199,000, meaning new continuing claims were outpacing exhaustions. After an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 24 weeks of regular state UI (the December COVID-19 relief bill increased the number of weeks of PEUC eligibility by 11, from 13 to 24).

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Twenty states raised their minimum wages on New Year’s Day: Federal action is still needed

On January 1, minimum wages went up in 20 states. The increases range from an $0.08 inflation adjustment in Minnesota to a $1.50 per hour raise in New Mexico, the equivalent of an annual increase ranging from $166 to $3,120 for a full-time, full-year minimum wage worker. The updates can be viewed in EPI’s interactive Minimum Wage Tracker and in Figure A and Table 1 below.

In prior years, we have estimated the number of workers who would directly benefit from these increases, as well as the total dollar amount and average wage increase for affected workers in each state. Unfortunately, current circumstances make it difficult to accurately produce estimates of this year’s increases. The COVID-19 pandemic has devastated labor markets throughout the country, with a large share of the job losses occurring in low-wage sectors, such as leisure and hospitality, where minimum wage hikes typically affect large shares of workers. Because conditions in these industries are so different from what they were in the period reflected in our model’s underlying data, we cannot use it to make estimations about effects happening right at this moment.

Even so, we know that minimum wage increases are as crucial as ever in the current context—to protect low-wage workers from exploitation and continue toward the goal of a living wage for all workers. From a macroeconomic perspective, it’s smart policy: Low-wage households—who disproportionately benefit from increases to the minimum wage—are highly likely to quickly spend the extra dollars they receive, boosting consumer demand as we move into recovery.

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The Trump administration finalizes rule attacking federal workers’ right to union representation in workplace discrimination cases

In his final weeks in office, the Trump administration continues to attack federal workers’ right to union representation. Last week, the Equal Employment Opportunity Commission (EEOC) voted to finalize a rule that prohibits union representatives from using official time—which is paid work time representatives use for union activities—to represent their coworkers in equal employment opportunity (EEO) matters, overturning almost 50 years of precedent. By prohibiting union representatives from using official time during EEO matters, the final rule effectively limits the right of federal workers to choose their representative in the EEO complaint process.

The rule also creates enormous cost burdens for federal workers who want to file a workplace discrimination complaint. By prohibiting the use of official time in discrimination complaints, federal workers are faced with the choice of hiring a private attorney or asking an inexperienced coworker to be their representative on their own free time. The cost of an attorney will be too costly for many vulnerable federal workers, and between the choices of hiring an attorney, asking an inexperienced coworker to be a representative, or not filing at all, many will forgo exercising their rights.

This is only one of many ways the Trump administration has attacked federal workers’ unions. During his first year, President Trump issued three executive orders eroding the collective bargaining rights of federal workers. These orders shortened the time frame expected to complete bargaining and directed agencies not to bargain over certain topics, limited the use of official time for collective bargaining activities, and weakened due process protections for federal workers subject to discipline. In October 2019, Trump signed an executive order revoking an executive order issued by former President Obama that gave employees of federal contractors the right of first refusal for employment on a new contract when a federal service contract changes hand.

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The economy President-elect Biden is inheriting: 26.8 million workers—15.8% of the workforce—are being directly hurt by the coronavirus crisis

We now have a full year of jobs data for 2020. This is an important moment to take stock of where things stand in the labor market.

The official unemployment rate was 6.7% in December, and the official number of unemployed workers was 10.7 million, according to the Bureau of Labor Statistics (BLS). These official numbers are a vast undercount of the number of workers being harmed by the weak labor market, however. In fact, 26.8 million workers—15.8% 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 December, there were 1.0 million such workers, a substantial increase from November. (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 of work because of the virus.) Accounting for these workers, the unemployment rate would be 7.3%.

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How to organize in the anti-union South

Amy Waters, RN, CPN, at Mission Hospital in Asheville, NC, detailed her story of a successful union drive as a member of National Nurses United at EPI’s panel discussion, “Rebuilding Collective Bargaining Back Better.”

“We are now the first private hospital in North Carolina with a union and we are the largest newly formed union in the South, since, I believe, the 1970s,” says Waters.

Teaching at the intersection of social-justice activism and education

Jesse Hagopian, teacher and co-adviser of the Black Student Union at Garfield High School in Seattle, WA, spoke about the intersection of social-justice unionism and the Black Lives Matter at School movement at EPI’s book event, “Strike for the Common Good: Fighting for the Future of Public Education.”

“I think the fundamental problem with our education system is this fundamental problem we have with all of our systems and institutions in this country, and that is that they’re a product of an economic and political structure that is built on profit, racism, oppression, and inequality—namely capitalism,” says Hagopian.

What to watch on jobs day: Little to no improvement in December and huge losses over 2020

Jobs day on Friday will not only give us a read on the labor market for December, but it will also give us a sense of the devastating economy of 2020 and the economy President-elect Biden is walking into. Overall job growth for December will likely continue to trend toward zero, with some chance of employment actually falling. At the same time, rising COVID-19 caseloads, hospitalizations, and deaths means our health and economic woes are far from over. President-elect Biden is inheriting an exceedingly troubled economy with millions of families just trying to stay afloat. Over the Trump administration’s term, more jobs were lost than gained—there are 541,000 fewer jobs in the U.S. economy than when he took office in January 2016. And not only does President-elect Biden enter his first term in a disastrous economy, he also inherits a litany of anti-worker policy decisions from his predecessor who squandered the labor market strength he inherited.

The figure below provides a decent picture of the employment situation over the last year. In January and February, we saw solid job growth with gains of 214,000 and 251,000, respectively. After COVID-19 hit, federal legislation expanded unemployment insurance, increasing both eligibility and weekly payments, making it financially viable for millions of workers to safely stay home while public health officials assessed the situation. However, businesses that were shuttered in the interest of public health received insufficient federal economic support to keep paying their workers even as they remained safely at home. The U.S. economy experienced losses in March and April of 1.4 million and 20.8 million jobs, respectively, losses the likes of which we hadn’t experienced in modern history. Millions were on temporary layoff and once states started opening back up, some of those were rehired. We saw a significant bounce back in May and June with 2.7 million and 4.9 million jobs added, respectively. Unfortunately, over the succeeding five months, job growth has rapidly slowed as federal relief expired and the virus surged: 1.8 million in July down to 1.5 million in August then 711,000, 610,000, and a paltry 245,000 in November. December looks to continue the trend with low (or even negative) job growth expected.

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First UI claims of 2021 are still higher than the worst of the Great Recession

There was an armed insurrection at the U.S. Capitol yesterday in which the police were complicit in a way that has everything to do with structural racism. Structural racism has also meant that Black and Latinx working people are experiencing a disproportionate health and economic impact of the COVID-19 pandemic. The UI data released this morning show a labor market in turmoil as COVID-19 surges.

Another 948,000 people applied for Unemployment Insurance (UI) benefits last week, including 787,000 people who applied for regular state UI and 161,000 who applied for Pandemic Unemployment Assistance (PUA). The 948,000 who applied for UI last week was a decrease of 152,000 from the prior week. That drop was driven almost entirely by a drop in PUA claims, undoubtedly due to uncertainty over whether PUA would be extended, as Trump delayed signing the relief bill during that week. Now that the program has been extended (more on that below), I expect PUA claims to rise again in coming weeks.

Last week was the 42nd 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.)

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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.

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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.

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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.

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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.

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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.

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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).

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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.

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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.

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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%.

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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.

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One million people applied for unemployment insurance last week: Unless Congress acts, millions of people will soon be left without a safety net

Another 1.0 million people applied for UI benefits last week, including 712,000 people who applied for regular state UI and 289,000 who applied for Pandemic Unemployment Assistance (PUA). After two weeks of increases, the 1.0 million who applied for UI last week was a welcome decline of 105,000 from the prior week. However, last week was the 37th 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 still nearly three times where they were a year ago.)

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, continuing claims for regular state UI dropped by 569,000.

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 set to expire on December 26 (as is PUA—more on these expirations below).

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