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

by nyljaouadi1
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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 (6 months) of regular benefits—and the coronavirus crisis has now lasted more than 6 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 is an additional 13 weeks of regular state UI (and is only available to people who 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 non-overlapping—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.

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: But caution, this is an overestimate due to reporting issues (see below), September 26, 2020

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

 

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