With millions of workers receiving unemployment benefits and no end in sight for the COVID-19 pandemic, Congress must act

Posted October 1, 2020 at 9:56 am by Heidi Shierholz

With millions of workers receiving unemployment benefits and no end in sight for the COVID-19 pandemic, Congress must act

Another 1.5 million people applied for unemployment insurance (UI) benefits last week. That includes 837,000 people who applied for regular state UI and 650,000 who applied for Pandemic Unemployment Assistance (PUA). PUA is the federal program for workers who are not eligible for regular unemployment insurance, like gig workers. It provides up to 39 weeks of benefits, but it is set to expire at the end of this year. The 1.5 million who applied for UI last week was unchanged from the prior week.

Note: California has shut down all new UI claims while they prepare an updated identity verification system to combat fraud, but the Department of Labor (DOL) adjusted for that in their published numbers. UI fraud is not about individuals filing a one or two fraudulent claims, but sophisticated schemes involving extensive identity theft and the overriding of security systems. That UI systems are vulnerable to these attacks is no great surprise, given that UI agencies are often working on computer systems that are decades old. One take-home message here is that we need to invest heavily in the technology of our UI systems.

Most states provide 26 weeks (six months) of regular benefits—and the coronavirus crisis has now lasted more than six months. That means many workers are exhausting their regular state UI benefits. In the most recent data, continuing claims for regular state UI dropped by almost a million, from 12.75 million to 11.77 million.

The good news is that unless there are administrative glitches, total claims should not yet fall as a result of individuals exhausting regular state UI, because unemployed workers can move onto Pandemic Emergency Unemployment Compensation (PEUC), which provides an additional 13 weeks of benefits to people who have exhausted regular state UI.

DOL data suggest that, right now, 28.0 million workers are either on unemployment benefits or have applied recently and are waiting to get approved (see Figure A). But importantly, that number is a substantial overestimate. For one thing, initial claims for regular state UI and PUA should be nonoverlapping—that is how DOL has directed state agencies to report them—but some individuals are erroneously being counted as being in both programs. Further, some states are including retroactive payments in their continuing PUA claims, which would also lead to double-counting (this story does a great job of explaining this). Finally, as mentioned above, creaky UI systems have also been the target of highly sophisticated fraud, which adds to claims numbers. All this means nobody knows exactly how many people are receiving unemployment insurance benefits right now, which is yet another reminder that we need to invest heavily in our data infrastructure and technology.

Figure A

DOL numbers indicate that 28.0 million workers are either receiving unemployment benefits or have applied and are waiting to see if they will get benefits (as of September 26, 2020): But caution, this is an overestimate due to reporting issues (see below)

	Regular state UI: Continued claims	Regular state UI: Initial claims	PUA: Continued claims	PUA: Initial claims	Other programs (mostly PEUC, STC, and EB)	Total
Cumulative	11,767,000	837,000	11,828,338	1,265,719	2,338,120	0

ChartData Download data

Caution: This is a substantial overestimate. For one thing, initial claims for regular state UI and PUA should be nonoverlapping—that is how DOL has directed agencies to report them—but some individuals are erroneously being counted as being in both programs. Also, some states are including retroactive payments in their continuing PUA claims, which would also lead to double-counting.

Click here for notes.

Source: Department of Labor (DOL) Unemployment Insurance Weekly Claims (News Release), retrieved from DOL, https://www.dol.gov/ui/data.pdf, October 1, 2020.

Figure B shows continuing claims in all programs over time (the latest data are for September 12). Continuing claims are more than 25 million above where they were a year ago. However, the above caveat about continuing PUA claims applies here too, which means the trends over time in PUA claims may be distorted.

Figure B

Continuing unemployment claims in all programs, March 23, 2019–September 12, 2020: Use caution interpreting trends over time because of reporting issues (see below)

Date	Regular state UI	PEUC	PUA	Other programs (mostly STC and EB)
2019-03-23	1,905,627	–	–	31,510
2019-03-30	1,858,954	–	–	31,446
2019-04-06	1,727,261	–	–	30,454
2019-04-13	1,700,689	–	–	30,404
2019-04-20	1,645,387	–	–	28,281
2019-04-27	1,630,382	–	–	29,795
2019-05-04	1,536,652	–	–	27,937
2019-05-11	1,540,486	–	–	28,727
2019-05-18	1,506,501	–	–	27,949
2019-05-25	1,519,345	–	–	26,263
2019-06-01	1,535,572	–	–	26,905
2019-06-08	1,520,520	–	–	25,694
2019-06-15	1,556,252	–	–	26,057
2019-06-22	1,586,714	–	–	25,409
2019-06-29	1,608,769	–	–	23,926
2019-07-06	1,700,329	–	–	25,630
2019-07-13	1,694,876	–	–	27,169
2019-07-20	1,676,883	–	–	30,390
2019-07-27	1,662,427	–	–	28,319
2019-08-03	1,676,979	–	–	27,403
2019-08-10	1,616,985	–	–	27,330
2019-08-17	1,613,394	–	–	26,234
2019-08-24	1,564,203	–	–	27,253
2019-08-31	1,473,997	–	–	25,003
2019-09-07	1,462,776	–	–	25,909
2019-09-14	1,397,267	–	–	26,699
2019-09-21	1,380,668	–	–	26,641
2019-09-28	1,390,061	–	–	25,460
2019-10-05	1,366,978	–	–	26,977
2019-10-12	1,384,208	–	–	27,501
2019-10-19	1,416,816	–	–	28,088
2019-10-26	1,420,918	–	–	28,576
2019-11-02	1,447,411	–	–	29,080
2019-11-09	1,457,789	–	–	30,024
2019-11-16	1,541,860	–	–	31,593
2019-11-23	1,505,742	–	–	29,499
2019-11-30	1,752,141	–	–	30,315
2019-12-07	1,725,237	–	–	32,895
2019-12-14	1,796,247	–	–	31,893
2019-12-21	1,773,949	–	–	29,888
2019-12-28	2,143,802	–	–	32,517
2020-01-04	2,245,684	–	–	32,520
2020-01-11	2,137,910	–	–	33,882
2020-01-18	2,075,857	–	–	32,625
2020-01-25	2,148,764	–	–	35,828
2020-02-01	2,084,204	–	–	33,884
2020-02-08	2,095,001	–	–	35,605
2020-02-15	2,057,774	–	–	34,683
2020-02-22	2,101,301	–	–	35,440
2020-02-29	2,054,129	–	–	33,053
2020-03-07	1,973,560	–	–	32,803
2020-03-14	2,071,070	–	–	34,149
2020-03-21	3,410,969	–	–	36,758
2020-03-28	8,158,043	–	52,494	48,963
2020-04-04	12,444,309	3,802	68,897	64,201
2020-04-11	16,249,334	31,392	210,939	89,915
2020-04-18	17,756,054	59,760	1,088,281	116,162
2020-04-25	21,723,230	86,972	3,498,790	158,031
2020-05-02	20,823,294	171,580	6,226,074	175,289
2020-05-09	22,725,217	232,057	7,929,418	216,576
2020-05-16	18,791,926	233,288	11,095,269	226,164
2020-05-23	19,022,578	534,958	9,761,879	247,595
2020-05-30	18,548,442	1,093,338	9,392,718	259,499
2020-06-06	18,330,293	867,226	11,067,905	325,282
2020-06-13	17,552,371	769,155	12,853,484	336,537
2020-06-20	17,316,689	850,461	13,870,617	392,042
2020-06-27	16,410,059	936,726	12,008,146	373,841
2020-07-04	17,188,908	940,001	13,179,377	495,296
2020-07-11	16,221,070	1,055,778	13,008,659	513,141
2020-07-18	16,691,210	1,155,692	12,956,006	518,584
2020-07-25	15,700,971	1,223,255	10,717,042	609,328
2020-08-01	15,112,240	1,289,125	11,212,827	433,416
2020-08-08	14,098,536	1,407,802	10,957,527	549,603
2020-08-15	13,792,016	1,393,314	13,550,916	469,028
2020-08-22	13,067,660	1,422,483	14,656,297	523,430
2020-08-29	13,283,721	1,527,166	14,467,064	490,514
2020-09-05	12,373,201	1,631,645	11,510,888	529,220
2020-09-12	12,363,352	1,828,370	11,828,370	509,750

ChartData Download data

Caution: Trends over time in PUA claims may be distorted because when an individual is owed retroactive payments, some states report all retroactive PUA claims during the week the individual received their payment.

Click here for notes.

Source: U.S. Employment and Training Administration, Initial Claims [ICSA], retrieved from Department of Labor (DOL), https://oui.doleta.gov/unemploy/docs/persons.xls and https://www.dol.gov/ui/data.pdf, October 1, 2020.

Republicans in the Senate allowed the across-the-board $600 increase in weekly UI benefits to expire at the end of July. Last week was the ninth week of unemployment in this pandemic for which recipients did not get the extra $600. That means most people on UI are now are forced to get by on the meager benefits that are in place without the extra payment, benefits which are typically around 40% of their pre-virus earnings. It goes without saying that most folks can’t exist on 40% of prior earnings without experiencing a sharp drop in living standards and enormous pain. This piece shows that there is nowhere in the country a worker can afford to live on unemployment insurance alone.

In early August, President Trump issued an executive memorandum that was supposed to give recipients an additional $300 or $400 in benefits per week. But in reality, even this drastically reduced benefit has been extremely delayed for most workers, is only available for a few weeks, and is not available at all for many. This chart shows how much less in benefits people are getting under Trump’s executive memorandum than they did under the CARES Act.

Blocking the extra $600 in weekly UI benefits is terrible economics. The extra $600 was supporting a huge amount of spending by people who now have to make drastic cuts. The spending made possible by the $600 was supporting 5.1 million jobs. Cutting that $600 means cutting those jobs—it means the workers who were providing the goods and services that UI recipients were spending that $600 on lose their jobs. The map in Figure B of this blog post shows how many jobs will be lost by state now that the $600 unemployment benefit has been allowed to expire. The labor market is still 12.7 million jobs below where we would be if the recession hadn’t happened. Now is not the time to cut benefits that support jobs.

But what about the supposed work disincentive effect of the extra $600? Rigorous empirical studies show that any theoretical work disincentive effect of the $600 was so minor that it cannot even be detected. And more simply: In May/June/July—with the $600 in place—9.2 million people went back to work, and a large share of likely UI recipients who returned to work were making more on UI than their prior wage. The extra benefits did not stop them from going back; a job offer is too valuable. Further, there are 8.3 million more unemployed workers than job openings, meaning millions will remain jobless no matter what they do. Dropping the $600 cannot incentivize people to get jobs that are not there.

Failing to renew the extra $600 is also exacerbating racial inequality. Due to the impact of historic and current systemic racism, Black and brown communities have seen more job loss in this recession and have less wealth to fall back on. They are taking a much bigger hit with the expiration of the $600. Further, workers in this pandemic aren’t just losing their jobs—an estimated 12 million workers and their family members have lost employer-provided health insurance due to COVID-19. The Senate must extend the UI provisions of the CARES Act, both to provide relief to the jobless and to the bolster the broader economy.