Millions Are Still Waiting for Jobless Benefits

Millions Are Still Waiting for Jobless Benefits

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Plus, another round of stimulus checks? 
Tuesday, April 28, 2020

The Unemployment System Groans Under Pressure

Millions of people who have lost their jobs due to the coronavirus are having trouble getting the unemployment benefits they are entitled to receive, according to new erpotrs out this week.

About 26 million people have applied for unemployment since the beginning of the outbreak, but many others have been unable to do so as the result of outdated technology and overwhelmed reporting systems at the state level. And some workers who have managed to make claims are still waiting to receive their benefits as states struggle with the unprecedented volume of people seeking assistance.

Some people can’t get through: According to survey data released Tuesday by the Economic Policy Institute, for every 10 people who filed for unemployment benefits from mid-March to mid-April, three to four were unable to get through to their state systems, and another two didn’t try because they thought it was too difficult to do so. The survey results suggest that in addition to the 21.5 million people who filed for benefits during the four-week period from March 22 to April 18, another 7.8 to 12.2 million people would have applied had they been able to do so.

“These findings imply the official count of unemployment insurance claims likely drastically understates the extent of employment reductions and the need for economic relief during the coronavirus crisis,” the study’s authors wrote.

State systems are breaking down: Some states can’t handle to sheer number of benefit applications they are receiving, as old technology, understaffing and years of insufficient investment in safety net programs take their toll. One result is that applicants are kept waiting for states to determine their eligibility to receive benefits. According to an analysis by CQ Roll Call, based on four weeks of applications through April 11, the hard-hit states of Florida, Ohio, Georgia and New Jersey have failed to process hundreds of thousands of applications (see the chart below).

The reasons for the failures are complex and include a confusing gap between state-level rules and new federal guidelines that enable a wider range of workers to receive benefits – a distinction that requires some applicants to reapply for the federal program after being rejected for the state one.

“The feds ... put guidance out that said you have to apply for unemployment insurance, get rejected, and then apply for pandemic unemployment insurance, which was a complete disaster,” Melissa DeRosa, a top aide to New York Gov. Andrew Cuomo, said last week.

Lots of frustration: The crisis is moving so fast that it can be hard to nail down solid numbers, but stories about frustrated people struggling with the unemployment system are not hard to come by. Jim Hewes, who lost his job in Orlando in March, told Reuters that he tried for more than two weeks to file a benefits claim online and he is still waiting to hear about the paper form he mailed in April. “It’s a shame how you work for so many years and then when you need it, you can’t get it,” Hewes said. “It’s almost set up to fail.”

Another Round of Relief Payments?

Top House Democrats want to see more aid for individual taxpayers in the next coronavirus stimulus bill, and on Tuesday the White House indicated that it is looking into making additional direct payments to households, Roll Call’s Jennifer Shutt reported.

“That’s something that we’re studying very carefully, and I know that people in the House are as well,” White House economic adviser Kevin Hassett told reporters.

The IRS said this week that under the terms of the first stimulus package – which provided stimulus checks of as much as $1,200 per adult and $500 per child – it had made more than 89 million payments totaling about $160 billion as of April 17. Overall, the agency expects to send out about 150 million payments worth nearly $300 billion.

Although there are concerns that the next stimulus package could take weeks or longer to negotiate as partisan differences resurface, Hassett expressed confidence it will get done. “I expect that it’s very likely there will be a … deal,” he said. “So I think the odds of there not being another round, at least one more round, of legislation are pretty low.”

Quote of the Day

“In the next year or two, the more they do in terms of fiscal stimulus, the quicker the economy will recover. This is a very big hole the economy has to dig out of. There is going to have to be more aid for states.

“One caveat to all this would be if markets get spooked by deficits and interest rates rise. But we just aren’t seeing any of that at this point. I’m not saying something like that couldn’t happen in 10 years’ time, but right now, it’s pretty clear the U.S. needs more fiscal help.”

--  Jim O’Sullivan, chief U.S. macro strategist at TD Securities, in a piece by Politico's Ben White on the risk that the economy could fall off a "coronavirus cliff." 

The Navy Blue Angels and Air Force Thunderbirds buzzed New York City today in a tribute to health care workers battling the coronavirus. Here's a look as they flew over the Brooklyn Bridge. 

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