The ‘Pandemic Unemployment Assistance gap’ is now almost 6 million

Last week, I reviewed how the number of people apparently collecting Pandemic Unemployment Assistance (PUA) benefits far exceeded — by over 5 million — the total number who had applied to get on that temporary federal unemployment benefits program. The US Department of Labor (DOL) subsequently released another round of unemployment benefit claims data, which showed the gap has continued to widen. The number of apparent PUA “continuing claims” — which usually means the number of persons collecting benefits — grew to almost 14.4 million in the week ending June 20. Meanwhile, the cumulative number who had ever applied to get on the PUA program rose to 8.6 million. That increased the “PUA gap” (which reflects the difference between the two figures) to 5.8 million, as shown in the chart below.

Source: US Department of Labor.

The reason behind the PUA gap is relatively straightforward: PUA “continuing claims” are not what they appear to be. As last week’s DOL report notes, “Backdated claims data may be included in these figures.” A spokesperson for the Arkansas unemployment insurance (UI) agency recently explained it better: “‘The continued claims numbers reflect the number of weeks, not the number of individuals that filed continued claims,’ she said, adding that ‘the appearance of the rise in PUA continued claims is due to processing continued claims filed for earlier weeks.’”

Nonetheless, media accounts have continued to describe what the PUA gap suggests could be a significant number of phantom PUA “recipients.” For example, just yesterday the New York Times editorial board described the latest data — including current PUA “recipients” — like this: “As of the end of June, more than 14 million American workers had qualified for benefits under the expansion out of a total of 33 million workers drawing unemployment benefits.”

Such statements derive from this table in last week’s DOL
report, which suggests there were 32.9 million “persons claiming UI benefits in
all programs” in the week ending June 20, including almost 14.4 million
“persons” on PUA:

Source: US Department of Labor.

But by also including what DOL admits are “backdated claims” — which means the data include weeks of PUA benefits paid instead of just persons paid PUA benefits — the number of “persons claiming UI benefits in all programs” is overstated, and apparently significantly so based on the PUA gap.

Ominously,
last week’s DOL report for the first time includes a “backdated claims may be
included in these figures” warning on continuing claims data under the Pandemic
Emergency Unemployment Compensation (PEUC) program, too. That suggests some of
the 850,000 apparent continuing claims reported under that program —
which are also included in the 32.9 million “persons claiming UI benefits in
all programs” table above — may not reflect
“persons,” either. Rising numbers are expected to move onto the PEUC program as
they exhaust state UI benefits in the coming weeks and months.

Congress is currently deciding whether to take additional steps to assist the unemployed and otherwise strengthen the recovery from the coronavirus crisis. Key decisions include whether to extend $600 per week federal bonus payments, which are currently available to millions of current state UI recipients as well as all those collecting temporary federal PUA and PEUC program benefits. As they make those decisions, policymakers — and all Americans — deserve an accurate accounting of the number collecting these benefits, and trends in benefit collection. Unfortunately, the current count of “persons claiming UI benefits in all programs” included in DOL’s initial claims reports is simply not giving this data to them. Even worse, as the PUA gap reflects, the already significant difference between what these data appear to mean and what they actually reflect is growing.

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