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A lot of the attention this morning is on initial claims still being stubbornly high, but I want to talk through something else this morning.
A
, if you will.
A
, if you will.
Here's how workers flow through the different UI programs, including long-standing state programs, the existing federal EB program, and the new federal expansions under the CARES Act (PEUC and PUA).
Let's say you're a worker who is eligible for state UI (meaning you're a W-2 employee, meeting some minimum earnings threshold, some other probably arduous requirements, and you're actually able to access the system). You'll get 12-26 weeks of state benefits.
For the purpose of this exercise, let's say you got 26 weeks. The 26 week mark is when we say folks are "long-term unemployed." This is the threshold where things get bad.
You're much more likely to drop out of the labor force indefinitely at this point.
You're much more likely to drop out of the labor force indefinitely at this point.
Anyway, let's say you exhausted your 26 state weeks. Because of the CARES Act, you're eligible for PEUC, which can give you 13 more weeks.
PEUC requires a new application-- you can't be moved onto it automatically. Unfortunately, PEUC take-up is ~65%.
PEUC requires a new application-- you can't be moved onto it automatically. Unfortunately, PEUC take-up is ~65%.
Once you run out of PEUC weeks, you'll have been unemployed for 39 (!!) weeks. 39 weeks ago from today was March 25, in the midst of the huge wave of layoffs.
After PEUC, you might be eligible for the Extended Benefits program, a federal program (not part of the CARES Act, though CARES made it fully federally financed).
If your state's labor market is suitably bad, the state is "triggered on."
24 states are triggered on right now.
If your state's labor market is suitably bad, the state is "triggered on."
24 states are triggered on right now.
EB provides 6-20 weeks, depending on your state.
Here's a good overview of how the EB triggers are lackluster: https://www.brookings.edu/blog/up-front/2020/12/03/there-are-too-many-ways-to-lose-unemployment-compensation/
Here's a good overview of how the EB triggers are lackluster: https://www.brookings.edu/blog/up-front/2020/12/03/there-are-too-many-ways-to-lose-unemployment-compensation/
Why's this important?
The number of people on EB is
, even as the number of states triggered on 
.
What does that mean?
More and more people have been out of work for *so long* that they've exhausted 12-26 weeks of state UI + 13 weeks of PEUC.
The number of people on EB is
, even as the number of states triggered on .What does that mean?
More and more people have been out of work for *so long* that they've exhausted 12-26 weeks of state UI + 13 weeks of PEUC.
According to the last Jobs Report, 37% of unemployed workers (by the most conservative u-rate measure) have been out of work for >26 weeks.
This is not what a recovery looks like.
This is not what a recovery looks like.
Anyway, the upshot is that initial claims numbers, even if they bounce around a little bit, are bad.
Continuing claims numbers are even worse.
And more workers shifting into long-term unemployment programs is *even worse*.
Continuing claims numbers are even worse.
And more workers shifting into long-term unemployment programs is *even worse*.
One thing that we shouldn't do in response to this data? Stop extending UI.
This data underscores the importance of extending UI benefits. The stakes are too high not to.
Without the latest package being enacted, >10 million people will be stranded without any income.
This data underscores the importance of extending UI benefits. The stakes are too high not to.
Without the latest package being enacted, >10 million people will be stranded without any income.
11 weeks won't be enough.
What really won't be enough is arbitrary cliffs. We should stop kicking the can down the road, going through months of arduous negotiations to get skinny packages that aren't enough.
Keep benefits in place until the labor market improves- for everyone.
What really won't be enough is arbitrary cliffs. We should stop kicking the can down the road, going through months of arduous negotiations to get skinny packages that aren't enough.
Keep benefits in place until the labor market improves- for everyone.
That's my spiel. I'm going to go bake some Christmas cookies and hope this doofus signs the bill.
Then we'll get to work on the next one.
Then we'll get to work on the next one.
