One year ago today, @CAPolicyLab's "UI Team" released its 1st Report.
We partnered with @CA_EDD to analyze CA's administrative data on UI claimants, focusing on the nature of the crisis & how it was affecting workers in near real-time.
Today, we review our 10 biggest takeaways:
1) As the crisis dragged on, Benefit extension programs such as PEUC and FED-ED (aka EB) have become increasingly important in supporting unemployed workers.
SEVENTY PERCENT of regular UI claimants receiving benefits in April 2021 were on an extension program.
2) The COVID-19 crisis hit the hospitality and food services sector hardest.
Through this mechanism (and others), it has disproportionately impacted less educated workers, workers of color, and women.
3) The official measure of Continued Claims is sensitive to processing delays + retroactive certifications, making trends difficult to interpret.
CPL's new measure sidesteps these issues by counting individuals paid benefits by the week in which they experienced unemployment.
4) The UI system was not designed with low-wage workers in mind. In CA, weekly benefit amounts are just half of prior earnings & top out at $450 - well below poverty levels.
Federal UI benefit supplements were an important lifeline for workers struggling to make ends meet.
5) The UI recipiency rate (the % of unemployed workers collecting UI benefits) rose substantially during the crisis, and is well above levels seen in past recessions.
But differences between counties were substantial, with lower-income areas less likely to collect benefits.
6) Long-term unemployment - which is associated with a myriad of adverse consequences - is an increasingly large problem.
Of the individuals claiming regular UI benefits: Black claimants, lower educated claimants, and female claimants were more likely to experience LTU.
7) The Extended Benefit triggers are broken.
In 33 states, EB has already triggered off because the trigger measure doesn't include claimants on extension programs.
(It's also needed to be adjusted in an ad-hoc fashion in 2/2 of the past recessions.)
8) Initial claims have remained persistently high throughout the crisis.
One key factor is "Additional Claims", (claims which have been re-opened after a claimant has had a break in certifications with intervening work) which could signal a large amount of churn in the UI system.
9) Many workers saw reduced hours during the crisis instead of complete layoffs - as evidenced by large shares of claimants collecting "Partial UI" benefits.
Hopefully, this means workers & employers have remained connected, and can return to regular employment quickly.
10) Workers were optimistic about their chances of being recalled to their employers during the crisis - much moreso than before the pandemic, & increasingly so in the last 2 months.
The extent to which such recalls actually occur will play a huge role in shaping the recovery.
Details on these 10 findings + interactive figures are available here: bit.ly/KeyTrendsUI
After a year of analyzing UI data & navigating the intricacies of the system, we also have a few recs for federal & state policymakers. They're summarized here:
Since March, we've written 8 reports analyzing the UI system + trying to explain how many people are receiving UI benefits.
Now we ask a different question:
Who has the UI system left behind?
We want to know who is “missing out” on UI.
i.e., "Who is unemployed, but isn’t receiving UI benefits?"
It’s hard to judge the trade-offs between UI extensions and other forms of economic relief without being able to say something about this question.
To attempt to answer this question, we took a geographic approach:
We calculated the number of people receiving regular UI benefits in each neighborhood, and compare it to local estimates of unemployment.
(see techn. appendix for details)
Me, @TillvonWachter, @alexbellecon & Geoff Schnorr take a deep dive into the recent #UI claims data to shed some light on what’s actually happening in CA’s labor market.
In late August, initial claims for PUA skyrocketed, while EDD expressed concerns of a surge in fraudulent PUA claims. There was also a slight increase in initial claims for regular UI.
BUT...
Prior to this, CA saw 5 consecutive weeks of a decrease in new initial claims. (2)
Coinciding with this surge in initial PUA claims was a change in the demographic profile of PUA claimants- Recent claimants are more likely to be male, white, and self-employed than earlier PUA claimants - whether or not this is driven by fraudulent claims isn’t totally clear (3)
New @CAPolicyLab Report:
Me, @TillvonWachter, @alexbellecon & Geoff Schnorr break down the rise in "Initial" Unemployment Insurance Claims (and much more)
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The recent growth in Initial Claims has largely been driven by an increasing number of additional claims —claims which are reopened after a claimant’s temporary return to work.
The number of truly *new* initial claimants has been flat since May — but at historically high levels
These "additional" claimants, who are experiencing *another* layoff, are different than new initial claimants.
We show that relative to the group of new claimants, additional claimants are more likely to be women, younger workers, and in Food Services