Unless Congress Acts, Millions of Americans Will Soon Be Left With No Safety Net

Another 1.0 million people applied for UI benefits last week, including 712,000 people who applied for regular state UI and 289,000 who applied for Pandemic Unemployment Assistance (PUA). After two weeks of increases, the 1.0 million who applied for UI last week was a welcome decline of 105,000 from the prior week. However, last week was the 37th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims--because we didn't have PUA in the Great Recession--initial claims last week were still nearly three times where they were a year ago.)

Most states provide 26 weeks (six months) of regular benefits, but this crisis has gone on for nearly nine months. That means many workers have exhausted their regular state UI benefits. In the most recent data, continuing claims for regular state UI dropped by 569,000.

For now, after an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of regular state UI. However, PEUC is set to expire on December 26 (as is PUA--more on these expirations below).

In the latest data available for PEUC (the week ending November 14), PEUC rose by 60,000, offsetting only about 40% of the 148,000 decline in continuing claims for regular state benefits for the same week. Why didn't PEUC rise more? Many of the roughly 2 million workers who were on UI before the recession began, or who are in states with less than the standard 26 weeks of regular state benefits, are now exhausting PEUC benefits, at the same time others are taking it up. More than 1.5 million workers had exhausted PEUC by the end of October, and that figure will be substantially higher now (see column C43 in form ETA 5159 for PEUC here).

In some states, if workers exhaust PEUC, they can get on yet another program, Extended Benefits (EB). However, in the latest data, just 681,000 workers were on EB. That's far less than half of those who have exhausted PEUC. Most are left with nothing.

Figure A shows continuing claims in all programs over time (the latest data are for November 14). Continuing claims are still more than 18 million above where they were a year ago, even with the exhaustions we've seen so far.

A Government Accountability Office (GAO) report released earlier this week documents key problems with UI data since COVID-19 hit. This is important--quality data is crucial for policymaking and we need to know exactly what happened to severely erode the quality of the data in this crisis so that we can make the necessary investments to ensure that we have good data in the next crisis. The GAO report also sheds light on the issue of widespread underpayment of PUA, and gives the clear recommendation that where underpayment occurred, states should recalculate benefits and make up the difference.

Senate Republicans allowed the across-the-board $600 increase in weekly UI benefits to expire at the end of July, so last week was the 18th week of unemployment in this pandemic for which recipients did not get the extra $600. And, as mentioned above, PUA and PEUC will expire on December 26--unless Congress acts. Millions of workers are now depending on these programs. The Department of Labor (DOL) reports that a total of 13.4 million workers were on PUA (8.9 million) or PEUC (4.6 million) during the week ending November 14. When these programs expire, millions of these workers and their families will be financially devastated. A paper from The Century Foundation finds that 12 million workers will lose PUA or PEUC benefits when they expire on December 26--on top of the 4.4 million who will have exhausted them before then. It also finds that only 2.9 million will then be eligible for Extended Benefits. That means a total of 13.5 million workers (12.0 million + 4.4 million - 2.9 million) will have lost CARES Act unemployment benefits by the end of the year with nothing to fill in the gap.

The House of Representatives passed a $3 trillion relief package in May, then a $2.2 trillion relief package in October, and yesterday House Speaker Nancy Pelosi and Senate minority leader Chuck Schumer announced they backed a $908 billion bipartisan bill as a basis for negotiations. But so far--throughout all that--Senate Majority Leader Mitch McConnell has blocked meaningful additional COVID-19 relief, knowing full well that millions will see their benefits disappear on December 26 if he doesn't act. The cruelty is beyond belief.

Further, UI is great stimulus. Reinstating and extending pandemic UI provisions would create or save more than five million jobs. We will get November jobs data tomorrow morning, but as of October, there were 25.7 million workers who were officially unemployed or otherwise out of work because of the virus, or who have seen a drop in hours and pay because of the pandemic. And job growth is slowing. Stimulus is desperately needed.

Blocking stimulus is also exacerbating racial inequality. Due to the impact of historic and current systemic racism, Black and Latinx communities have seen more job loss in this recession and have less wealth to fall back on. The lack of stimulus hits these workers the hardest. Further, workers in this pandemic aren't just losing their jobs--millions of workers and their family members have lost employer-provided health insurance due to losing their jobs in the COVID-19 downturn. To get the economy back on track in a reasonable timeframe, we need policymakers to pass roughly $3 trillion in fiscal support now, with the first $2 trillion hitting the economy between now and mid-2022.