This statement was published in response to the May 13, 2021 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 offers a sobering reality check after a week of hysteria about the role of unemployment benefits in the recovery. The first reality check is that unemployment claims are dropping on their own accord, even before the dramatic and short-sighted actions taken by 12 governors as of Wednesday evening to end participation in all pandemic unemployment programs. New claims for benefits dropped for the fifth consecutive week, to 605,000 (NSA), after another sizeable decline in new state claims (487,000, down 26,000 last week NSA) and relatively steady PUA claims (up 2,000 to 104,000).
Outside of noisy data from California, pandemic claims are dropping as well, having fallen by 75,000 nationally once California is factored out. Even with California data, PUA and PEUC claims have dropped by more than 1.5 million (16 percent) from their peak of 14.1 million on March 5, registering at 12.5 million this week (7.28 million on PUA and 5.27 million on PEUC). In other words, more than one million workers have already exited pandemic aid on their own for jobs.
Yet as of Wednesday evening, 12 governors from the states of South Carolina, Alabama, Iowa, Idaho, Missouri, Wyoming, Mississippi, Arkansas, Tennessee, Utah, Montana, and North Dakota have decided to deprive their workers of this critical aid. A new analysis published this morning by TCF analyzes the decisions of these governors to end access to pandemic unemployment benefits, including PUA, PEUC, the $300 per week FPUC supplement, and the $100 MEUC boost to mixed earners. We find that:
- In these 12 states, 895,000 workers will be cut off from pandemic benefits as soon as June 12, with workers of color being hit the hardest;
- In general, these workers will lose 12 weeks of pandemic benefits—costing their state’s economies nearly $5 billion;
- If all of the Republican governors were to pull out, those totals would grow to 4.8 million workers, risking depriving state economies of $29 billion.
These changes have the potential to drastically scale back assistance to jobless workers far too early in the recovery. Nationally, there are still 16.8 million workers on one of the unemployment programs, and the nation is still short 8 million- plus jobs from the start of the pandemic. As the pandemic has dragged on, the number of workers on traditional state benefit programs has dropped to 3.8 million, down more than one-third from the 5.7 million on state benefits at the start of the year. With emergency pandemic aid eliminated, this program (minus the $300 bump) will be the last lifeline of aid available in these 12 states and any others that follow their lead.
There is simply no economic evidence that pandemic unemployment aid is holding back job creation. Rather, money from federal benefits flows into local businesses through additional consumer spending, generating $1.61 in economic activity for every dollar spent. After a year of needed help, conservative governors are sending a disturbing message to jobless workers: we no longer support you in the process to get back on your feet. Hopefully the Biden administration can work closely with the remaining states to keep unemployment benefits going until more sectors of the economy come back, the vaccine stretches to herd immunity, and child care becomes widely available.