Three months in, the economic pain of the coronavirus pandemic continues: More than one in five workers are either on unemployment benefits or are waiting to get on

by nyljaouadi1
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Last week, 2.2 million workers applied for unemployment benefits. This is the twelfth week in a row that initial unemployment claims are have been more than twice the worst week of the Great Recession.

Of the 2.2 million who applied for unemployment benefits last week, 1.5 million applied for regular state unemployment insurance (UI), and 0.7 million applied for Pandemic Unemployment Assistance (PUA). PUA is the federal program for workers who are out of work because of the virus but who are not eligible for regular UI (e.g., the self-employed). At this point, only 42 states and Puerto Rico are reporting PUA claims. This means PUA claims are still being undercounted.

How is it that we are seeing large numbers of initial unemployment claims now, when the jobs report from last Friday shows we added jobs in May? One key thing is the fact that the unemployment benefits numbers don’t account for changes in hiring. If there are a large number of layoffs, there can still be job growth if there is also a lot of hiring (or rehiring). Further, some unemployment claims since April may be from people who actually lost their job in March or April but didn’t apply right away (perhaps because they couldn’t get through the system).

Many commentators are still reporting the cumulative number of initial regular state UI claims over the last 12 weeks as a measure of how many people are out of work because of the virus. I believe we should abandon that approach because it ignores PUA—and is thus an understatement on that front—but overstates things in other ways (for example, some who were laid off and applied for UI in March or April may now be going back to work). Instead, we can calculate the total number of workers who are either on unemployment benefits, or have applied and are waiting to see if they will get benefits, in the following way:

A total of 18.9 million workers had made it through at least the first round of regular state UI processing as of May 30 (these are known as “continued claims” or “insured unemployment”), and 3.2 million had filed initial UI claims on top of that, but had not yet made it through the first round of processing. And, 9.7 million workers had made it through at least the first round of PUA processing by May 23, and 2.8 million had filed initial PUA claims on top of that but had not yet made it through the first round of processing. Even further, by May 23, another 773,000 workers had made it through at least the first round of processing in one of the other unemployment benefits programs, or had filed initial claims in other programs on top of that. The largest of the other programs are Pandemic Emergency Unemployment Compensation—which is available to workers who have exhausted their regular state benefits—and Short-Time Compensation, which is an alternative to layoffs where employers reduce work hours rather than laying off workers, and workers get partial benefits. Altogether, that’s 35.4 million workers who are either on unemployment benefits or who have applied very recently and are waiting to see if they will get benefits. That is more than one in five U.S. workers.

It’s important to note that of the 35.4 million workers “on” unemployment benefits, more than a third (35.4%) are on PUA. This certainly underscores how enormous the gaps are in our regular state unemployment insurance programs.

DOL reports that 35.4 million workers are either on unemployment benefits or have applied and are waiting to see if they will get benefits: June 6, 2020

Regular state UI: Continued claims Regular state UI: Initial claims PUA: Continued claims PUA: Initial claims Other programs Total
Cumulative 18,919,804 3,157,130 9,715,948 2,812,219 773,148 0
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The data below can be saved or copied directly into Excel.