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Here we go again. Last week, 2 million workers applied for unemployment insurance (UI). Breaking that down: 1.2 million applied for regular state UI (not seasonally adjusted), and 830,000 applied for Pandemic Unemployment Assistance (PUA). 1/ https://www.dol.gov/ui/data.pdf
Many headlines say there were 1.4 million UI claims last week. THAT’S NOT RIGHT—it ignores PUA, the federal program that is serving millions of workers who are not eligible for regular UI, like gig workers. It also uses seasonally adjusted data, which is problematic right now. 2/
This is the 19th wk in a row that claims have been more than twice the worst week of the Great Recession (GR). If you restrict to regular state claims (b/c we didn’t have PUA in the GR), this is the 19th wk in a row that claims are more than 1.2 times the worst week of the GR. 3/
Republicans in the Senate allowed the across-the-board $600 increase in weekly UI benefits to expire. They are proposing to (essentially) replace it with a $200 weekly payment. That $400 cut in benefits is not just cruel, it’s terrible economics. 4/ https://www.epi.org/press/the-gop-heals-act-fails-to-heal-people-harmed-by-the-coronavirus-will-cost-millions-of-jobs-and-protects-bad-employers/
These benefits are supporting a huge amount of spending by people who would otherwise have to make drastic cuts. The spending made possible by the $400 that the Senate wants to cut is supporting 3.4 million jobs. If you cut the $400, you cut those jobs. 5/ https://www.epi.org/blog/cutting-ui-benefits-by-400-per-week-will-significantly-harm-u-s-families-jobs-and-growth-3-4-million-fewer-jobs-will-be-created-over-the-next-year-as-a-result/
The map in this blog post shows many jobs will be lost in your state if the extra $600 unemployment benefit is cut to $200. 6/ https://www.epi.org/blog/cutting-ui-benefits-by-400-per-week-will-significantly-harm-u-s-families-jobs-and-growth-3-4-million-fewer-jobs-will-be-created-over-the-next-year-as-a-result/
Today’s release of GDP data underscores how wrong it is to cut benefits. Second-quarter GDP collapsed at the fastest rate on record—and the second quarter *includes* the employment bounce-back of May and June. 7/
And because we did not put the public health measure in place necessary to successfully reopen, the virus has spiked. The improvement we saw in May and June has stalled, if not reversed. Now is not the time to cut benefits that are supporting jobs. 8/ https://twitter.com/ernietedeschi/status/1288476633041645571
But what about the potential work disincentive of the $600? It has been massively overblown. In fact, rigorous empirical studies show that any disincentive effect has been so minor that it *cannot even be detected.* 9/
For example, a new study by Yale economists found no evidence that recipients of more generous benefits were less likely to return to work. 10/ https://news.yale.edu/2020/07/27/yale-study-finds-expanded-jobless-benefits-did-not-reduce-employment
Case in point: in May and June—with the $600 in place—7.5 MILLION people went back to work. About 70% of likely UI recipients who returned to work were making more on UI than their prior wage. 11/ https://twitter.com/ernietedeschi/status/1285567925596889090?s=20
Further, there are 14 million more unemployed workers than job openings, meaning millions will remain jobless no matter what they do. Slashing the $600 to $200 cannot incentivize people to get jobs that are not there. 12/ https://files.epi.org/charts/img/196746-25298.png
Even further, many people simply can’t go to work right now because it’s not safe for them or their family, or because they have care responsibilities as a result of the virus. Slashing the $600 to $200 will not incentivize them to get a job, it will just cause hardship. 13/
Slashing the $600 will also exacerbate racial inequality. Due to the impact of historic & current systemic racism, Black and Brown communities are suffering more from this pandemic, and have less wealth to fall back on. They will take a much bigger hit if the $600 is cut. 14/
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. 15/
DOL numbers suggest that right now, 33.8 million workers are either on unemployment benefits, have been approved and are waiting for benefits, or have applied recently and are waiting to get approved. 16/
HOWEVER, the above chart is an *upper bound* on the number of people “on” UI, for 2 reasons. First, regular state UI & PUA claims should be nonoverlapping—that is how DOL has directed agencies to report them—but some folks may be erroneously counted as being in both programs. 17/
And, some states are likely including some back weeks in their continuing PUA claims, which would also lead to double counting. For more info on that, see the discussion around Figure 3 in this paper. 18/ https://www.federalreserve.gov/econres/feds/files/2020055pap.pdf
This chart shows continuing claims in all programs over time (the latest data to do this are for July 11). Continuing claims are more than 28 million above where they were a year ago. (But, the above caveat about double counting applies here, too.) 19/
