Accurately Counting the Unemployed

Yesterday’s initial unemployment claims report found nearly 1.5 million people filing first-time claims for unemployment insurance (UI) last week. While UI initial claims have declined for 12 consecutive weeks, last week’s disappointingly large figure also doesn’t count some 728,000 initial claims for the temporary federal Pandemic Unemployment Assistance (PUA) program, which benefits independent contractors, the self-employed, and others not typically eligible for UI. 

That’s just people filing new claims for unemployment benefits. The total number collecting any unemployment benefit (under UI, PUA, or programs for veterans, federal employees, and the long-term unemployed, among others) is far greater, since it reflects the tens of millions who got on benefits in prior weeks and continue to collect them. As of the week ending June 6, more than 30.5 million were collecting an unemployment check of some kind (all figures above are “real,” i.e. not seasonally adjusted). 

Those enormous figures haven’t kept some from suggesting the number of unemployed is far greater, often by confusing the total number of initial claims for UI benefits since the crisis began with the current number of unemployed. For example, Rep. Richard Neal (D-MA), the Chairman of the House Ways and Means Committee, recently said “more than 42 million are out of work,” apparently in reference to the then-total number of accumulated weekly initial claims since mid-March. Meanwhile, the May jobs report on which Neal was commenting stated that “the number of unemployed persons fell by 2.1 million to 21.0 million.” Yesterday MSNBC’s Stephanie Ruhle described “almost 50 million people who are on unemployment,” rounding up the now 47 million initial UI claims filed since mid-March. That’s well more than the 30.5 million on unemployment benefits, as noted above from yesterday’s report. 

The American Institute for Full Employment (AIFE) released a brief report yesterday that attempts to unpack these figures, stating:

It’s important to note the cumulative unemployment insurance claims filed since March 14^th has little to do with “jobs lost” or even total unemployed as headlines continue to erroneously suggest. Just as every coronavirus infection does not lead to a life lost, neither does every job infected with temporary unemployment lead to a job permanently lost. A more accurate measure of “jobs lost” to date is the number of permanent layoffs highlighted below. [Emphasis in original]

The AIFE report continues:

Most significant and rarely discussed is the composition of the unemployed in the third chart – Unemployed People – by Type.  One measurement of jobs lost is permanent layoffs to date. Since the start of the pandemic through mid-May the number of “jobs lost” has increased from 2.1 M to 2.9 M.

From a relative standpoint, as of mid-May, just 17% of those laid off said their layoff was permanent. A stunning 83% of laid off workers said their unemployment is temporary and as the recovery progresses, this percentage will be important to watch, as some temporary layoffs (furloughs) are becoming permanent. [Emphasis in original]

The distinction between temporary and permanent layoffs is critical, as is understanding that many who recently filed an application for UI are not on UI or even unemployed. Some never qualified or “may be double-counted” as The New York Times noted since they filed for multiple programs. Others have already returned to work. An untold number may reflect fraudulent applications, including by “identity thieves and organized criminal groups.” For example, Maine scrubbed its UI rolls in recent weeks for “criminal unemployment imposter fraud.” As a result, it “cancelled roughly 23,900 initial claims and 41,000 weekly certifications that were determined to be fraudulent.” Since peaking at 162,000 in late May, in just two weeks Maine’s UI caseload fell to under 67,000.

As the economy recovers and more return to work, the gap between accumulated initial claims since mid-March and the actual number of currently unemployed should continue to widen. That’s all the more reason to correctly distinguish between these figures now, as Congress discusses important proposals to help more unemployed people get back to work. Policymakers and — as the AIFE report correctly concludes — the nation’s unemployed deserve “a clear and accurate view of the employment landscape.”