Two months after the coronavirus pandemic first led to vast parts of the U.S. economy being shut down and an unprecedented loss of jobs, states are still struggling to handle the surge of new unemployment claims, leaving millions of Americans waiting on tens of billions of dollars in benefits.
More than 36 million Americans have filed new unemployment claims over the last eight weeks, but Bloomberg News reports that shortcomings in the unemployment-insurance system are leaving millions facing a dire cash crunch, contributing to frustration and anger over the lockdowns that public health experts say are needed to curb the spread of the virus:
“Bloomberg News contacted all 50 states this week and less than half provided figures on how many people had been paid the benefits they were owed. But in those states alone at least 5 million initial claims filed were yet to be paid. The gap between the initial claims reported March 15 to May 2 and continuing claims is now more than 10 million people. …
“In April, the Treasury, which funds the payments made by states, paid out an unprecedented $48 billion in unemployment insurance, according to its own data. Economists at the Brookings Institution, however, calculated that, based on the number of claims filed in April, the bill owed that month alone was at least $80 billion and mounting coming into May.
“The Treasury and states also had to make up for a lag in payments in March. A separate analysis by economists at the Century Foundation, a nonpartisan think-tank, found that just 14.2% of the 12 million new workers who filed for unemployment in the month received benefits.”
Andrew Stettner, a senior fellow at the Century Foundation, estimates that just 60% of the 36.5 million people who have filed new claims over the last two months have gotten their benefits.
“We have to be honest,” Stettner tells Bloomberg. “Even the strongest advocates of this program have to understand it has not been successful. It hasn’t been able to deliver what it needs to despite the heroic efforts of a lot of individual workers and state agencies.”