5 takeaways:
➀ Each state runs its own unemployment insurance program — and that’s one of the problems. Kathryn Anne Edwards, a labor economist at the RAND Corporation, said states are incentivized to pursue a “low-benefit, low-tax” policy that gives the unemployed vastly different benefits depending on where they live. Only two states, New Jersey and Massachusetts, cover more than 50% of the unemployed, said Till von Wachter, a professor of economics at UCLA, who tracks the data at the California Policy Lab. North Carolina hugs the bottom at less than 10%.
➁ The unemployed have no political constituency. What drives politicians? Voters, supporters, contributors. But voters are presumed to be unemployed for brief spells. “Who does unemployment serve?” Edwards asked. “We think of it as serving unemployed workers by giving them benefits, but the unemployed are not a permanent constituency. You become unemployed, and then you go back to work, or you leave the labor force. The only permanent constituency of the unemployment insurance system are the employers who pay the taxes.” If the permanent constituency of employers wants lower taxes – and therefore lower benefits – that’s what happens, according to Edwards.
➂ The COVID pandemic relief efforts increased inequality. Sonja Diaz, founding director of the Latino Policy and Politics Initiative at UCLA, had her organization explore how well the Paycheck Protection Program – the small-business relief program included in the 2020 CARES Act – distributed its loans. Her researchers examined loan-by-loan detail from the program in California. Whiter, wealthier neighborhood received more in PPP loans – and jobs maintained – than poorer Black and Latino neighborhoods. She concluded: “Pre-pandemic, things were unequal. And then all of a sudden, white communities got this influx of money, and that increased the racial and ethnic disparities instead of alleviating them.” When workers for those firms not helped by the PPP then went to claim unemployment insurance benefits, they faced red tape and slowdowns.
➃ Journalists covering the issue in their states have access to data and other resources. UCLA’s von Wachter detailed the different regular releases on unemployment claims – initial and continuing – and on recipiency rates. Weekly claims data are available from the Department of Labor. Beyond that, the department’s Employment and Training Administration has far more detail in its reports and raw data, available here. The raw data site is not user-friendly, von Wachter warned, but it is very detailed for those looking to track how their states are doing. Files are updated every morning from every state.
➄ Efforts to modernize are underway but moving slowly. Fewer than half of all states have made efforts to modernize their systems, either in the way benefits are distributed or taxes are assessed, according to Rebecca Dixon, executive director of the National Employment Law Project. But states can take five steps to improve their systems immediately: make access 24/7, make the system accessible from smartphones, update password protocols, create call-back and chat technology to deal with high claim volume, and translate online material into Spanish and other languages.
This program was funded by Arnold Ventures. NPF is solely responsible for the content.
