Wednesday, November 25, 2020

Unemployment is rising in US and Wis. But many are set to be cut off in December.

This is not good at all. But felt entirely predictable.
The number of Americans applying for unemployment benefits rose last week to 778,000, evidence that the U.S. economy and job market remain under strain as coronavirus cases surge and colder weather heighten the risks.

The Labor Department's report Wednesday said jobless claims climbed from 748,000 the week before. Before the virus struck hard in mid-March, weekly claims typically amounted to roughly 225,000. They shot up to 6.9 million during one week in March before dropping yet remain historically high more than eight months later, with many businesses unable to fully reopen.
Worse is that this “seasonally adjusted” increase of 30,000 was based on having more people file last week, as the raw number of new claims went up by more than 78,000 to 827,000. And more are likely to become needy as 2020 ends, which isn’t good because a lot of people are already in need in America. We should have seen this coming, not only because of the rise in COVID cases and colder weather conspiring to hammer restaurants, bars and other gathering places. But also because the temporary stimulus of jobs and spending related to the election is petering out (so there are a lot of hacks needing to find gigs now).

The continuing claims figure only goes through November 14, which is the week that new claims started rising again, so we'll wait until next week to see if that starts going back up. But we do have information on all of the main unemployment programs through Election Week, and the drop in continuing claims was already being more than offset by an increase in the gig-related PUA program and the number of people receiving long-term unemployment benefits.
Much like how the end of the election collided with the rise in COVID cases and COVID/weather-related shutdowns, the recent rise in new and long-term claims for November is set to collide with a late December deadline that will cut off millions of Americans from benefits.
Unless Congress can agree on a new stimulus deal in the next few weeks, an estimated 12 million workers will lose their unemployment benefits on December 26, according to a new report from The Century Foundation, a progressive think tank, leaving them with “little or no means of support” in the new year.

Without a deal, federal funding will lapse for two key unemployment programs on Dec. 26 because of deadlines written into the CARES Act in March: The Pandemic Unemployment Assistance (PUA) program, which extended unemployment benefits to gig workers and freelancers who don’t normally qualify, and the Pandemic Emergency Unemployment Compensation (PEUC) program, which provides an extra 13 weeks of UI to those who have exhausted their state’s benefits.

An estimated 12 million workers — more than half of the 21 million people currently collecting UI — will be receiving jobless benefits from those two programs at that time, according to TCF’s report, and are at risk of falling off a benefits cliff.

Another 4.4 million workers will have already exhausted their benefits, meaning more than 16 million people “will be heading into 2021 with little or no aid available to them,” the report says.
And some states might be cutting people off before Dec. 26. The US Department of Labor says states trigger "off" of getting unemployment benefits for 39+ weeks (under the Extended Benefits (EB) program) if their unemployment rolls are low enough. Here's how that happpens.
States must pay EB (for 13 weeks) if the insured unemployment rate (IUR) for the previous 13 weeks is at least 5 percent and is 120 percent of the average rate for the same 13-week period in the two previous years.
Wisconsin hasn't had an IUR of 5% since the end of August, and was triggered off of the EB program in the first week of November. So if you reach 39 weeks in Wisconsin, you are now cut off.

This is especially relevant as the number of Wisconsinites that are on the 26-to-39 week PEUC program keeps growing, and is now past 60,000.
The number of Wisconsinites on PUA also keeps going up, and is now past 35,000. And all of these people are set to be cut off in the next month.

But I still see that Congress seems more concerned about keeping government funded in 2 weeks, over dealing with the cliff that millions of Americans are set to go over after Christmas.
Top House and Senate appropriators on Tuesday clinched a deal on a bipartisan set of funding levels, paving the way for a $1.4 trillion spending package to avert a government shutdown next month.

The agreement on the funding allocations, confirmed by a House Democratic aide, establishes overall totals for 12 appropriations measures that will be rolled into one massive omnibus bill that would boost federal budgets for the rest of the fiscal year. Negotiators plan to keep the numbers — known as 302(b)s — under wraps until a bipartisan, bicameral omnibus is finalized, the aide said….

It's unclear whether any stimulus measures will accompany the government funding package. Senate Republicans have been increasingly pessimistic about attaching coronavirus relief to the spending bill, while Democrats have remained somewhat optimistic.

“We have been working on the omnibus bill and I thought that would be a segue into” coronavirus relief, House Speaker Nancy Pelosi said Friday during her weekly press conference. “Let’s hope that it is.”
If only Nancy was in a position to make sure that happens…

Pelosi botched this situation before the election, when she didn't force Moscow Mitch and the GOP Senate to vote on stimulus, choosing to avoid a shutdown instead. Are House Dems seriously going to make the same mistake in the Lame Duck session, allowing the Senate to walk away from helping the tens of millions of Americans that are/will be out of work?

They'd better not! It is more important to keep Americans and service-related businesses afloat than in giving funds to keep things operating as-is. And if Dems in Congress refuse to tie a funding bill to unemployment benefits, aid to restaurants, and other measures to help people survive a brutal COVID Winter, they are setting up the economy to be a mess for the start of President Biden’s term.

Not tying stimulus measure to the budget bill would be a losing strategy for both Dems (and a lot of Dem guvs and House members are up for re-election in 2022), and in avoiding the double-dip recession that is becoming increasingly likely by the day. So we need to stay on top of what's happening in Congress, to make sure we don’t go backwards in December.

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