This statement was published in response to the August 6, 2020 release of jobs numbers by the Bureau of Labor Statistics. For the most up-to-date data please visit TCF’s comprehensive UI data dashboard here.
Today’s Labor Department report provides a stark warning of the impact of the sharp cut off in the $600 pandemic unemployment benefits, and sends a foreboding sign ahead of the jobs report on Friday. Most starkly, 1.6 million people who newly filed for federal and state unemployment benefits for the week ending July 25 are the first group of Americans impacted by COVID-19 who won’t receive the additional $600 per week provided by the CARES Act.
This cut off comes as reliance on UI remains sky high. Even with a drop of 250,000 last week, new claims for regular benefits have totaled more than 1 million per week (after never reaching that level before) for 20 consecutive weeks—evidence of the continued churn and uncertainty facing workers. The latest layoffs appear to be spread across the economy, from accommodations and food services to typically recession-insulated sectors like health care and administrative support.
Ongoing (continued) claims for benefits are also persisting at extreme levels despite improvement last week. The Labor Department reported 13 million ongoing PUA claims, 1.1 million on PEUC, and 15.8 million filing ongoing claims for regular unemployment insurance. While these claims ticked down last week, the PUA and regular claims are only 9 and 30 percent off peak levels in June and May, respectively, and the PEUC figures reached a record as more workers are becoming long-term unemployed.
Taken together, new and continuing claims represent 20 percent of the total workforce. It’s nearly guaranteed that tomorrow’s job report won’t show an unemployment rate that high. That’s because the unemployment rate is a deeply flawed measure of economic needs, and leaves out millions forced to leave work to care for children because of COVID-19, as well as people who are furloughed, underemployed, or who can’t look for work due to pandemic restrictions.
It is those on continued claims, which have not meaningfully moved over the past five weeks, that have the most to lose. The largest groups have been out of work since April, and after enduring 13 or more weeks of unemployment, they are in no position to suddenly go without the $600 per week boost. These families are preparing to be socked with the additional costs of sending their kids to school and paying sky-high COBRA premiums and out-of-pocket health care costs, not to mention skyrocketing food prices, on meager unemployment benefits that average just $330 per week. It’s simply an untenable situation for these families.
While it is heartening that reports indicate that Republicans have improved their starting bid for continued aid to $400 week, there’s no reason that Washington should have allowed families to go over this cliff to begin with. The President’s ruminations about executive action are a distraction that would rob states of vital COVID19 aid to cover up Washington’s dysfunction. The simplest, and right course of action, is to extend and improve the CARES Act UI provisions that have led the way in steadying the economy.