COVID & Unemployment

Continuing unemployment claims are down, but that doesn’t tell the whole story

Andy Uhler Nov 5, 2020
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Unemployment benefits are running out for people who have been out of work for six months. Spencer Platt/Getty Images
COVID & Unemployment

Continuing unemployment claims are down, but that doesn’t tell the whole story

Andy Uhler Nov 5, 2020
Heard on:
Unemployment benefits are running out for people who have been out of work for six months. Spencer Platt/Getty Images
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In the most recent data from the Department of Labor, 751,000 people applied for state unemployment insurance last week, 7,000 fewer than the previous week. Continuing unemployment insurance claims dropped by 538,000, from 7.8 million to about 7.3 million.

When he sees continuing unemployment claims decline, economist David Wiczer at Stony Brook University would normally infer that people are finding jobs.

“The problem in the recent data is that we’ve had people unemployed for quite a while, and the regular state benefits start to expire,” he said.

Each state runs its own unemployment system and determines eligibility and benefit amounts. But no state lets people stay on those benefits for more than 26 weeks. 

Twenty-six weeks from the start of the shutdown in the middle of March was the middle of September. 

“If you’ve been out of work for six months, it’s hard for you to find a job,” said Andrew Stettner, senior fellow at The Century Foundation. “So we do think a lot of those people are still unemployed. Some of them are going onto extended benefits, but they’re not showing up in those state claims.”

Which could be one reason state claims are continuing to go down.

One of those extended benefits, Pandemic Emergency Unemployment Compensation, which was included in the CARES Act, provides 13 additional weeks of unemployment insurance once someone has exhausted their state benefits.

Another program called the Pandemic Unemployment Assistance expands eligibility to unemployed workers who ordinarily wouldn’t qualify for state benefits. 

“And that’s gig workers, self-employed,” said Eliza Forsythe, assistant professor of economics at the University of Illinois. “There’s a whole lot of different people that are eligible through this PUA program that typically are just completely left out of the system.”

People can be on PUA for up to 46 weeks in some states. The program is scheduled to expire at the end of the year.

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