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Fraction of Jobless-Aid Claims Paid in March, New DOL Data Shows

April 29, 2020, 1:00 PM

Federal data shows that 14% of workers who filed for unemployment insurance benefits in March received payment that month, as the unprecedented surge of pandemic-driven layoffs began to inundate state labor departments nationwide.

Approximately 1.7 million of the 11.8 million new workers who filed claims in March got unemployment checks before the month ended, according to Labor Department statistics made available this week. The rates of new claimants who received their first benefits check in March varied significantly from state to state, with Rhode Island’s 51% the highest, while Arizona, Florida, Indiana, and Minnesota were on the low end, at about 2% each.

The total number of payments made and the rate of new claimants receiving checks in March provide a snapshot of how the federal-state unemployment insurance infrastructure responded to the initial crush of what’s become a record-shattering tsunami of jobless-benefits claims—some 26.5 million since the Covid-19 pandemic began. The challenges states have faced in processing claims to meet demand is one of several factors lawmakers must contend with in talks on further coronavirus-response legislation.

March saw the third-highest number of new monthly unemployment payments on record, indicating the system responded swiftly to the mounting crisis, said Andrew Stettner, senior fellow at the Century Foundation who’s written extensively about unemployment insurance. But the low rate of new filers getting checks highlights the “major structural challenges” that the pandemic poses to the unemployment insurance system, he said.

“We’ve heard countless stories across the nation of the record number of workers who tried to file for unemployment, only to be met with crashing websites, unreachable phone lines, and states unable to process claims,” Stettner said in a statement. “Even among the workers fortunate enough to have their claims processed, the overwhelming majority did not receive emergency relief in March.”

Congress has expanded jobless benefits in response to the Covid-19 pandemic, including the addition of a $600 weekly unemployment insurance supplement on top of regular benefits. Lawmakers also created a program to provide compensation to independent contractors, gig economy workers, and others not eligible for standard benefits, although state efforts to get that program running have been challenging and slow.

More Payments in April?

States, which disburse unemployment benefits funding typically provided through taxes paid by employers, have up to 21 days to make initial payments to new filers. The number of individuals counted as insured unemployed stood at 8.2 million at the end of March, Stettner said, noting that shows states were processing those workers’ claims and that their payments should appear in the April data. The Labor Department has yet to release data for April.

The April numbers will likely show a significantly larger share of initial claims paid compared to March, said Indivar Dutta-Gupta, co-executive director of the Georgetown Center on Poverty and Inequality.

A number of factors should have accelerated claim-processing time, including some states spending additional resources to increase capacity or waiving or easing some of their normal filing and eligibility requirements, Dutta-Gupta said.

A few states have released unemployment statistics from mid-March through late-April showing much higher pay rates than the Labor Department’s March data. For example, Florida paid 2.4% of March filers, according to DOL numbers, while the state said it paid 47.6% of claims submitted between March 15 and April 27.

But the Labor Department is the authoritative source, and day-by-day numbers have fluctuated, so it is difficult to draw conclusions from statistics reported by states, said Michele Evermore, a senior policy analyst for social insurance at the National Employment Law Center.

More to the Story?

Federal and state data, however, may not tell the whole story about how the unemployment insurance system is holding up against the sheer amount of Americans left jobless by the pandemic.

For every 10 workers who successfully filed for unemployment benefits, as many as six additional workers either tried to apply but couldn’t get through the system or didn’t try because the process was too difficult, according to Economic Policy Institute research released Tuesday.

Some 21.5 million workers filed for unemployment benefits between March 22 and April 18. The difficulties associated with filing prevented another 7.8 million to 12.2 million workers from filing, the EPI study estimated, based on its analysis of survey data from nearly 25,000 respondents.

With assistance from Chris Marr in Atlanta.

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: John Lauinger at jlauinger@bloomberglaw.com; Karl Hardy at khardy@bloomberglaw.com