Millions Will Lose Unemployment Benefits in December Unless GOP Senators Act

Due to the Thanksgiving holiday this week, data on unemployment insurance (UI) claims--usually released on Thursdays--were released today. The data show that another 1.1 million people applied for UI benefits last week, including 778,000 people who applied for regular state UI and 312,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.1 million who applied for UI last week was an increase of 22,000 from the prior week's figures--the second week in a row that initial claims have risen. Further, last week was the 36th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims--because we didn't have PUA in the Great Recession--initial claims last week were still greater than the second-worst week of the Great Recession.)

Most states provide 26 weeks of regular benefits, but this crisis has gone on much longer than that. That means many workers are exhausting their regular state UI benefits. In the most recent data, continuing claims for regular state UI dropped by 299,000, from 6.4 million to 6.1 million.

For now, after an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of regular state UI. However, PEUC is set to expire on December 26th (as is PUA--more on these expirations below).

In the latest data available for PEUC, (the week ending November 7) PEUC rose by 132,000, from 4.4 million to 4.5 million, offsetting only about a third of the 414,000 decline in continuing claims for regular state benefits for the same week. Why didn't PEUC rise more? Many of the roughly 2 million workers who were on UI before the recession began, or who are in states with less than the standard 26 weeks of regular state benefits, are now exhausting PEUC benefits, at the same time others are taking it up. More than 1.5 million workers have exhausted PEUC so far (see column C43 in form ETA 5159 for PEUC here). In some states, if workers exhaust PEUC, they can get on yet another program, Extended Benefits (EB). However, in the latest data, just 601,000 workers were on EB. That's far less than half of those who have exhausted PEUC. Most are left with nothing.

Figure A shows continuing claims in all programs over time (the latest data are for November 7). The total number of workers on UI ticked up in the latest data, even with the exhaustions we've seen so far. This is a wake-up call.

Senate Republicans allowed the across-the-board $600 increase in weekly UI benefits to expire at the end of July, so last week was the 17th week of unemployment in this pandemic for which recipients did not get the extra $600. And, as mentioned above, PUA and PEUC will expire on December 26th--unless Congress acts. Millions of workers are now depending on these programs. DOL reports that a total of 13.7 million workers were on PUA (9.1 million) or PEUC (4.5 million) during the week ending November 7. When these programs expire, millions of these workers and their families will be financially devastated. An excellent paper from The Century Foundation finds that 12 million workers will lose PUA or PEUC benefits when they expire on December 26--on top of the 4.4 million who will have exhausted them before then. It also finds that only 2.9 million will then be eligible for Extended Benefits. That means a total of 13.5 million workers (12.0 million + 4.4 million - 2.9 million) will have lost CARES Act unemployment benefits by the end of the year with nothing to fill in the gap.

The House passed a $2.2 trillion relief package that would extend the UI provisions in the CARES Act, but Senate Majority Leader Mitch McConnell has thus far blocked additional COVID relief, knowing full well that millions will see their benefits disappear on December 26th if he doesn't act. The cruelty is beyond belief.

And blocking more COVID relief is not just cruel, it's bad economic policy. UI is great stimulus. The spending made possible by pandemic UI benefits is supporting millions of jobs. Letting these benefits expire means cutting those jobs. There are now 25.7 million workers who are officially unemployed, otherwise out of work because of the virus, or have seen a drop in hours and pay because of the pandemic. And job growth is slowing. Stimulus is desperately needed.

Blocking stimulus is also exacerbating racial inequality. Due to the impact of historic and current systemic racism, Black and Latinx communities have seen more job loss in this recession, and have less wealth to fall back on. The lack of stimulus hits these workers the hardest, which means stimulus is a racial justice issue. Further, workers in this pandemic aren't just losing their jobs--millions of workers and their family members have lost employer-provided health insurance due to the COVID-19 downturn. Senate Republicans are failing struggling families.