30 weeks into the COVID-19 pandemic and workers desperately need stimulus

by nyljaouadi1
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Another 1.3 million people applied for unemployment insurance (UI) benefits last week. That includes 898,000 people who applied for regular state UI and 373,000 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 1.3 million who applied for UI last week was roughly unchanged (a decline of 38,000) from the prior week’s figures. Last week was the 30th straight week total initial claims were far greater than the worst week of the Great Recession, and if that comparison is restricted to regular state claims—since we didn’t have PUA in the Great Recession—initial claims last week were greater than the second-worst week of the Great Recession. However, trends over time in initial claims should be interpreted with caution right now because California initial claims data are being imputed because they have temporarily paused processing initial claims to address problems in their system.

Republicans in the Senate allowed the across-the-board $600 increase in weekly UI benefits to expire at the end of July, so last week was the 11th week of unemployment in this pandemic for which recipients did not get the extra $600. Hope for another stimulus bill before February is waning. The House passed a $2.2 trillion relief package earlier this month, but Senate Republicans balked at the $1.8 trillion relief package Treasury Secretary Mnuchin offered to Nancy Pelosi. Senate Majority Leader Mitch McConnell announced on Tuesday that the Senate will take up a very small relief bill next week, but it seems clear that getting something done with less than 20 days until the election will be exceedingly difficult. It is looking more and more like stimulus talks will fail, which means the extra $600 is not coming back anytime soon, and the economy will also not be getting other crucial stimulus measures it needs to bounce back, including aid to state and local governments.

Most states provide 26 weeks (six months) of regular benefits, and October is the eighth month of this crisis. That means many workers are exhausting their regular state UI benefits. In the most recent data, continuing claims for regular state UI dropped by 1.2 million, from 11.2 million to 10.0 million.

The good news is that after an individual exhausts regular state benefits, they can move on to Pandemic Emergency Unemployment Compensation (PEUC), which provides an additional 13 weeks of benefits to people who have exhausted regular state UI. In the latest data available for PEUC (the week ending September 26), PEUC rose by 818,000 to 2.8 million, offsetting the 799,000 decline in continuing claims for regular state benefits for the same week. This is what we would expect to see as workers move from regular state benefits to PEUC. That suggests that earlier glitches that were delaying workers getting on to PEUC, including workers not being told about PEUC or not being told that they have to apply for it—even though state agencies are required to notify them—may be getting smoothed out. This is good news. The bad news is that without congressional action, PEUC expires at the end of the year.

DOL data suggest that, right now, 26.3 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. An even bigger issue is that states are including retroactive payments in their continuing PUA claims, which would also lead to double-counting. All this means nobody knows exactly how many people are receiving unemployment insurance benefits right now, which is another reminder that we need to invest heavily in our data infrastructure and technology.

DOL numbers indicate that 26.3 million workers are either receiving unemployment benefits or have applied and are waiting to see if they will get benefits (as of October 10, 2020): *But caution, this is an overestimate due to reporting issues (see below)*

Regular state UI: Continued claims PEUC: Continued claims Regular state UI: Initial claims PUA: Continued claims PUA: Initial claims Other programs (mostly STC and EB) Total
Cumulative  10,018,000
2,778,007  898,000
 11,172,335
 836,788
577,951 0

 

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