Throughout the COVID-19 economic crisis, Congress has relied heavily on using the state unemployment insurance (UI) programs to address the most massive surge in job loss in recorded history. In the two months following the onset of the downturn, more than one in four American workers interacted with the unemployment insurance system. Now, more than 25 million out-of-work Americans have just lost the $600-per-week payment that the federal government had originally added to recipients’ regular state benefits. Many of these households will no longer be able to afford the basics, as recipients were largely spending the additional cash on necessities. The loss of these benefits will also be a hit on state and business bottom lines, as this flow of cash has been helping local economies keep running. The current eviction crisis no doubt will worsen as another month of payments come due, and an increasing number of households will struggle to afford food.
The impact of this loss of individual income is not being felt equally. As with previous recessions, Black and Latinx workers have been hit the hardest by this downturn, and are more likely to be more reliant on unemployment insurance to stay afloat. Black and Latinx unemployment rates for the second quarter of 2020 were 16.1 percent and 16.7 percent, respectively, compared to 12 percent for white workers. Considering the disparate racial impact of cutting these additional federal funds just when Black and brown beneficiaries need it the most, it’s hard to look at this decision as anything other than racist policy. And unlike the 2008 Recession, this one is hitting women harder than men. Even if an additional $200 in federal UI per week is put in place, women will collectively lose nearly $5.5 billion per week in benefits, compared to what they were receiving under CARES Act federal assistance.
What the Latest Demographic Data Tells Us about Disparities in Unemployment Insurance Claims
The following analysis of Department of Labor data on the demographics of unemployment insurance serves to underscore and supplement what is already well-understood: COVID has hit Black and brown communities hardest, due to a confluence of existing economic, health, and environmental disparities.
Approximately 15.5 percent—or more than 8 million claims—of workers receiving unemployment benefits from March through June are Black, despite only accounting for 12.3 percent of the pre-pandemic workforce. (See Figure 1.) Hispanic and Latinx workers received benefits at a rate consistent with their participation in the workforce, claiming approximately 16 percent of UI claims during that time. Given that Hispanic and Latinx workers had higher unemployment rates in April and May than Black workers did, one might expect Hispanic and Latinx workers would comprise a higher-than-representative portion of UI recipients. However there is, unfortunately, historical evidence to suggest that people of color and lower-income individuals are less likely to apply for the benefit, and that those who do apply are less likely to be found eligible.
Asian workers have comprised 6.1 percent of all UI continued claims, which is on par with their representation in the labor force. However, Asian workers in some states have had disproportionate claims, such as in Nevada, where Asian workers accounted for over 12 percent of claims since March, while accounting for less than 9 percent of the state’s workforce. White workers are less reliant on unemployment insurance, relative to their share of the workforce, while still comprising nearly 60 percent of all regular state claims from March to June.
The demographics of UI recipients have changed since 2019, with the biggest year-over-year jump in claims coming from Black workers. (See Figure 2.) This outsized jump in claims reflects the racial disparities in the workforce that were amplified by the current crisis, such as structural racism that manifests, among other inequities, in unequal school funding and hiring discrimination that leads to less-stable labor market opportunities. Research from the Center on Budget and Policy Priorities shows, for example, that a majority of job losses early this year afflicted those in the lowest-paying sectors, such as hospitality and food preparation, which are disproportionately staffed by Black and Latinx workers.
The “benefit cliff” that unemployed workers just went over is a lot steeper in some states, particularly for Black workers. Looking at state-level data shows that average regular UI benefits are lower in states that have a higher percentage of Black UI recipients. Recipients in those states will see devastating losses from the harsh and sudden removal of the $600 per week federal boost, for example in states such as Mississippi, Louisiana, and Alabama, where approximately half of UI recipients are Black, while the state UI benefits hover around $200 per week. Even in these lower-cost-of-living states, $800 per month does not cover basic living expenses. In other words, nationwide, there are intense racial disparities not only in the number of people receiving a UI benefit, but also in the generosity of those benefits.
Map 1. Demographics of State Unemployment Insurance Claimants
Another way to understand disparities in UI recipiency is by looking at what percent of all individuals in various demographic groups received UI payments. An extensive weeklong survey conducted by researchers at the Federal Reserve Bank of Minneapolis, and analyzed by economist Bill Spriggs and his colleague Nyana Browne, found that, of all white non-Hispanic men, 26 percent, or more than one in four, received unemployment insurance payments, while only 12 percent of Black non-Hispanic men received assistance. This indicates it’s likely that a higher percentage of unemployed back workers are living without critical benefits.
Demographic data for recipients of federal unemployment insurance programs like Pandemic Unemployment Assistance (PUA) have been difficult to come by, however, some state agencies have gone beyond what’s reported to the Department of Labor. California, for example, with nearly 7 million individuals applying for regular UI since March, and another 1.5 million applying for PUA since May, has accounted for all programs in their data, available through California Policy Lab. Results show that 19.2 percent of Black workers and 17 percent of Asian workers are receiving UI payments, compared with 12.5 percent of white workers. Women have needed assistance more than men, with 17 percent of women receiving payments during this time, compared with 13 percent of men. As this data shows, Black workers in California are also less likely to be recalled back to work after layoffs than others (65 percent of Black workers expect to be recalled, compared with around 75 percent of white, Asian, and Hispanic workers), so they will be particularly impacted by any decisions made by Congress regarding the extension of additional UI benefits.
As workers across the country are facing a second round of layoffs and furloughs, it’s critical that the unemployment insurance system continues to be a source of stability for workers and families, especially for those disproportionately reliant on the system.
header photo: A car with, ‘extend the $600!’, written on a window participates in a caravan protest in Miami Springs, Florida. Source: Joe Raedle/Getty Images