After 11 weeks of coronavirus-related layoffs, the Department of Labor reported Thursday that a non-seasonally adjusted total of 37 million Americans have filed for and are receiving or waiting to receive benefits from their state unemployment insurance systems or the federal Pandemic Unemployment Assistance program that provides benefits to gig workers and others not eligible for regular state unemployment insurance. In the week that ended May 30, on a non-seasonally adjusted basis, 1.6 million people filed initial claims for state benefits and 623,000 filed for PUA benefits.
The headline numbers at most news operations differ on this—with a tally of 1.88 million for initial claims—because they are seasonally adjusted, which is standard procedure year round at the Labor Department, and don’t include the PUA filings, which leaves a big hole. I’ve pointed out several times previously that the seasonally adjusted figures are adequate when the economy is stable, but skew what’s actually going on when economic circumstances are rapidly changing. To avoid confusion for readers who saw those headlines and read the stories behind them, however, I previously chose not to switch to the non-seasonally adjusted numbers even though, as Heidi Shierholz at the Economic Policy Institute repeatedly notes, they provide a more accurate picture in times of abrupt change. Now I’ve made the change. One thing for certain—whichever version one chooses, it’s obvious the Pandemic Recession is hitting hard.
That 37 million breaks down like this:
Regular State UI Initial Claims…………...3.5 million
Regular State UI Continuing Claims…..19.3 million
PUA Initial Claims……………………………...3.2 million
PUA Continuing Claims……………………..10.74 million
If it were only those 37 million people who were out of work, the unemployment rate would be around 23%. But not all who have lost their jobs in the past three months are counted in those figures. Currently, for instance, 15 states and the District of Columbia have not reported any PUA numbers. (The median consensus of economists is that the government’s monthly jobs report to be released Friday will show an unemployment rate of 19%. But the report is based on a survey taken in mid-May, so the data is three weeks out of date and won’t include large numbers of layoffs.)
One possible bit of good news, the number of people receiving payment for continuing claims under regular state UI fell over the previous week, an indication that some workers are returning to their jobs. But at the same time, the continuing claims under PUA soared.
Under usual circumstances when the UI system is going smoothly and relatively small numbers of claims are filed each week, the safety net provided by the jobless benefits program makes life a bit easier than it would otherwise be for the eligible unemployed. But all is not going smoothly.
Shawn Donnan and Catarina Saraiva at Bloomberg
reported earlier this week that a third of the benefits they estimated are owed have been paid so far:
The Treasury disbursed $146 billion in unemployment benefits in the three months through May, according to data published Monday—more than in the whole of 2009, when jobless rates peaked after the financial crisis.
But even that historic figure falls short of a total bill that should have reached about $214 billion for the period, according to Bloomberg calculations based on weekly unemployment filings and the average size of those claims. [...]
In Texas where more than 2.6 million unique claims for jobless benefits have been filed since March, the backlog of cases still waiting to be verified at the end of last week stood at almost 650,000.
In pointing out that the Pandemic Recession is going to worsen before improving, EPI’s Shierholz reiterates that the impacts of recessions “do not hit different race and gender groups in the same way, because of things like occupational segregation, discrimination, and other labor market disparities.”
Jeanna Smialek and Jim Tankersley at The New York Times report that the coronavirus has hit African Americans harder than other Americans in terms of health outcomes and economically. They have been more likely to lose their jobs and more likely to have less savings to keep going until the recession ends because they earn less and have been hampered in their efforts to build wealth from generation to generation the way white Americans have done by discriminatory factors like “red-lining”:
“Based on prior experience, I would expect that we won’t see the recovery look as even as the job losses have been,” Ms. [Valerie] Wilson at EPI said, explaining that while much of America has been furloughed, minority job losses may be more likely to turn permanent.
Black workers suffer from what some economists call a “first fired, last hired” phenomenon: They lose work early, and their unemployment rate continues to rise even as the labor market for white workers begins to heal. That can have lasting effects, because workers who get stuck on the labor market’s sidelines can see their skills become outdated, making it harder for them to get back into decently paying jobs.
Just getting back to the old normal in regard to chronic matters of injustice like this as well as others isn’t the proper mindset for dealing with either the impacts of the Pandemic Recession or our long history of inequality. We have a crisis that offers an opportunity for transformation if we choose leaders willing to grab hold of it.