Twenty-seven weeks into the Pandemic Recession, hundreds of thousands of Americans are still making new claims each week for unemployment insurance, 1.5 million of them last week. This indicates that while about half the people who lost their jobs after much of the economy was shuttered in March are now back on their old job or in a new one, 11.5 million people laid off six months ago are still without work as the recovery has stalled and hiring cooled. By July 3.7 million had lost their jobs permanently, and an analysis last month put the eventual total of permanent losses at between 6.2 million and 8.7 million. Along with their jobs, millions of those out of work have also lost their employer-provided health insurance.
For the week ending Sept. 19, the Department of Labor tallied 825,000 new claims for regular unemployment insurance—seasonally adjusted to 870,000—and another 630,000 filed claims under the federal Pandemic Unemployment Assistance program that covers workers ineligible for regular benefits—the self-employed, gig workers, and the like. Because of unknown amounts of double-counting, the actual tally of the PUC figures is uncertain. What’s certain is that the number of new regular UI claims each week are still coming in at four times what they were before the pandemic struck. Also certain is that millions of Americans are in serious economic pain and political maneuvering is making their situation worse. The claim of Jared Kushner that the economy would be back to normal in June and “really rocking again” by July has proved to be as ridiculous a forecast as critics said it was when he made it at the end of April.
AnnElizabeth Konkel, an economist for the career site Indeed told The New York Times that the warm weather that allowed many businesses to carry on operations outdoors will now give way to colder weather in the northern states. Restaurants and other businesses in those climates can be expected to lay off workers again. “We’re losing steam, which is definitely not good heading into the winter,” she said.
At the Economic Policy Institute, Heidi Shierholz, who was chief economist to the U.S. Secretary of Labor during three years of the Obama administration, noted in her analysis Thursday that most states limit the duration of regular UI benefits to 26 weeks. The millions of workers who were laid off at the beginning of the economic shutdown and have not gone back to work have now exhausted those benefits. Because of the emergency federal extension passed under the CARES Act, they will still be able to collect benefits for another 13 weeks, meaning they’ll be cut off just before Christmas.
On average, unemployment benefits run about 40% of a worker’s wages, around $380 a week. Thanks to an extra $600 a week Congress included in the CARES Act, plus a flat $1,200 payment to everyone below a certain income who lost their jobs, a good deal of pain has been avoided. But the $600 increase expired at the end of July, and the Democrats’ efforts to renew it or provide another flat payment are highly unlikely to overcome Republican resistance to approving further relief. Shierholz points out:
Blocking the extra $600 is terrible not just on humanitarian grounds, but also on economic grounds. The extra $600 was supporting a huge amount of spending by people who now have to make drastic cuts. The spending made possible by the $600 was supporting 5.1 million jobs. Cutting that $600 means cutting those jobs—it means the workers who were providing the goods and services that UI recipients were spending that $600 on lose their jobs. [...]
Failing to renew the extra $600 is also exacerbating racial inequality. Due to the impact of historic and current systemic racism, Black and brown communities have seen more job loss in this recession, and have less wealth to fall back on. They are taking a much bigger hit with the expiration of the $600. This is particularly true for Black and brown women and their families, because in this recession, these women have seen the largest job losses of all.
Like the public health inequities exposed by the spotlight of the pandemic itself, the Pandemic Recession is spotlighting the creakiness and inequities of government programs designed to assist American workers and their families through economic hardship. We’ve known this for decades, and the Great Recession brought it into sharper focus. The programs definitely help, but they don’t do as good a job as they ought to. Which makes them another item ripe for the next president and Congress to add to their priority reform list.