Various reviewers (including me) have noted the rapid growth of the Pandemic Unemployment Assistance (PUA) program. That’s the temporary federally funded unemployment benefit program created in the March 2020 CARES Act that is designed to assist self-employed individuals, independent contractors, and others not typically eligible for regular unemployment insurance (UI) benefits. But a close review of PUA data reveals a statistical impossibility — there appear to be 5 million more people “on” PUA than the total number who have applied for benefits in the program’s short history. What is going on?
First some background. Every Thursday, the US Department of Labor (DOL) releases data on initial claims for unemployment benefits. As the coronavirus crisis struck and lockdowns took hold, initial claims for UI benefits soared to unprecedented levels in late March and early April. While first-time claims for UI have since dropped for 13 straight weeks, they remain at elevated levels. Meanwhile, continuing claims for UI — i.e. total UI recipients — rose to a peak of nearly 23 million in early May, before retreating to 17.9 million as millions returned to work in May and June (all figures throughout are “real,” meaning not seasonally adjusted).
Since early May, DOL’s weekly initial claims reports also have included data for the new PUA program, which most states were operating by mid-May. Start-up delays meant recipients’ first PUA check often included multiple weeks of back benefits, a dynamic that has continued as states clear claims backlogs. As with UI, DOL reports both initial claims as well as apparent “continuing claims” for PUA. For example, the latest initial claims report describes how there were almost 31.5 million “persons claiming UI benefits in all programs” — including over 12.8 million listed under the PUA program — during the week ending June 13.
Here’s how those 12.8
million “continuing claims” for PUA compare with the cumulative number of
initial claims for PUA since the program started:
As the chart displays, the
current 12.8 million “continuing claims” for PUA far exceed the 7.7 million
cumulative initial claims for PUA benefits through the week ending June 13. That
seems to suggest there are over 5 million more people “on” PUA than the total
number who ever applied to get on. Clearly, something is amiss.
Last week’s initial claims report offers a clue in a cryptic footnote added for the first time to PUA “continuing claims” figures: “Backdated claims data may be included in the persons filing totals.” A recent article from Bloomberg News offers significantly more clarity:
“In reality, states contacted by Bloomberg News explained that the totals reflect backlogged claims from prior weeks finally making their way through the system. In addition, with each retroactive week counted as a separate claim, one person can account for multiple claims in the tally. …
One example of the overcounting: Arkansas’s figures showed 134,478 federal PUA continuing claims for the week ended June 6, compared with 113,623 on regular state unemployment benefits. Zoë Calkins, a spokeswoman for the Arkansas Department of Commerce’s Division of Workforce Services, said claimants can backdate their filing to as early as the start of February. That means a resident who filed for PUA last week and lost their job in that period could file for 21 weeks, and be counted 21 times in that state’s total PUA claims tally.”
This reflects how
“continuing claims” for PUA are not what they appear, since “one person can
account for multiple claims.” That also means DOL’s tally of 31.5 million “persons
claiming UI benefits in all programs” is similarly overstated by including large
numbers of phantom PUA “recipients.”
Current unemployment numbers remain near historic highs, which has not kept some from attempting to inflate the number of unemployed even further. Confusion over the meaning of PUA “continuing claims” makes the effort to understand the real level of unemployment even harder. As states continue to clear backlogged claims for PUA, DOL should work with them to clarify how many people are actually on PUA. This is critical so policymakers have a firm understanding of what these figures mean and can better design measures to help millions who remain unemployed quickly return to work or find new positions.