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A prolonged depression is virtually guaranteed without significant federal aid to state and local governments. (Photo by Olivier Douliery/AFP/Getty Images)

A prolonged depression is virtually guaranteed without significant federal aid to state and local governments. (Photo by Olivier Douliery/AFP/Getty Images)

Congress Must Do Much, Much, Much More to Help Tens of Millions Unemployed

Nearly one in four workers has applied for unemployment benefits.

Last week, 3.3 million workers applied for unemployment benefits. That is an improvement over the 6 million per week we saw in late March/early April, but is an increase from the prior week—and is still well over three times the worst week of the Great Recession.

Of the 3.3 million who applied for unemployment benefits last week, 2.2 million applied for regular state unemployment insurance (UI), and 1.2 million applied for Pandemic Unemployment Assistance (PUA). PUA is the new federal program for workers who are not eligible for regular UI (e.g., gig workers) but are still out of work as a result of the virus. At this point, 15 states and the District of Columbia are not yet reporting PUA data, so PUA claims are being undercounted. Note, the number of PUA claims for Massachusetts was misreported as 1,184,792. It should have been 115,952. I have corrected for that error throughout this blog post.

It is also worth noting that the Department of Labor (DOL) reports that 2.4 million workers applied for regular state unemployment insurance last week on a “seasonally adjusted” basis, compared with 2.2 million on an unadjusted basis. Seasonal adjustments are usually helpful—they are used to even out seasonal changes in claims that have nothing to do with the underlying strength or weakness of the labor market, typically providing a clearer picture of underlying trends. However, the way DOL does seasonal adjustments is distortionary at a time like this, so I focus on unadjusted numbers when looking at regular state UI. PUA claims are available only on an unadjusted basis.

What is the total number of workers on UI or PUA in this recession so far? We can add up various data points to get at that. As of May 9, 22.9 million workers had made it through at least the first round of regular state UI processing (these are known as “continued” claims), and 4.5 million had filed initial UI claims since then. And, as of May 2, 6.1 million workers had made it through at least the first round of PUA processing, and 3.0 million had filed initial PUA claims since then. So altogether, that’s 36.6 million workers—close to one in four people in the U.S. workforce. And the situation is still deteriorating. The most recent Goldman Sachs forecasts imply that the unemployment rate will average more than 30% for May and June. Further, millions are also losing their health insurance, since our health care system ties health insurance to work. It is also worth always keeping in mind that any overall numbers mask the fact that recessions hit different race and gender groups differently, because of things like occupational segregation, discrimination, and other labor market disparities.

Policymakers need to do much, much more. For example, a prolonged depression is virtually guaranteed without significant federal aid to state and local governments. Indeed, we are at a fork in the road as a country right now. As of mid-April, about two-thirds of workers who are out of work as a result of the virus report they expect to be called back to their prior job. Whether they will actually be called back or whether those furloughs will turn into layoffs is in the hands of policymakers. It will hinge on whether policymakers enact an effective plan of testing and contact tracing so that people will feel safe enough to reengage in normal activity as the economy reopens, and whether federal policymakers provide enough aid to individuals, businesses, and state and local governments so that confidence and demand are relatively high as the economy reopens and those furloughed workers are able to get back to work.

© 2021 Economic Policy Institute

Heidi Shierholz

Heidi Shierholz leads the Economic Policy Institutes’ Perkins Project on Worker Rights and Wages, a policy response team that tracks the Trump administration’s wage and employment policies. She also heads EPI’s efforts to advance a worker-centered policy agenda.

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