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Response to albacore (Original post)

Sat Sep 5, 2020, 08:21 PM

3. The big discrepancy between jobs report 13.6 M unemployed, and 29.2 M collecting benefits

Last edited Sat Sep 19, 2020, 09:48 AM - Edit history (1)

Unemployed (BLS statistic from the August jobs report (released 9/4/20) that is also the basis of the unemployment rate U-3)
1st 8 months of 2020 (in thousands)
2020: 5892 5787 7140 23078 20985 17750 16338 13550 (in thousands)

From Thursday 9/3 DOL/BLS report on uninsurance claims https://www.dol.gov/ui/data.pdf
The total number of people claiming benefits in all programs for the week ending August 15 was 29,224,546, an increase of 2,195,835 from the previous week. There were 1,639,622 persons claiming benefits in all programs in the comparable week in 2019.

The above is the latest (as of 9/5 and counting). I don't know why they have a 2 week lag in this number, but they do. This includes people collecting benefits under the federal programs including the Pandemic Unemployment Assistance (PUA) program. And no, that's not the $600/week check thing (now reduced to $300 or whatever). No, there isn't double-counting. The PUA program is for gig and contract workers who are not eligible for the state unemployment insurance programs.

So in short, the number of unemployed is 13.6 million in August, according to the Friday BLS monthly jobs report,

but the number collecting benefits (some reports say collecting, some saying claiming) is 29.2 million in the week ending August 15.

The survey week for the Household Survey that produces the BLS's monthly jobs report is normally the week that includes the 12th of the month, if so, that's the week of August 9 - August 15, so that aligns perfectly.

This article, dated 6/16/20, and covering the May unemployment report purports to explain the discrepancy that showed up in May:

There are more people getting unemployment benefits than there are unemployed workers, CNBC, 6/16/20


# the key point is that the requirement that people be looking for work in order to collect unemployment benefits has been suspended during the pandemic - but was that still true in early-mid August, for example?

whereas to be counted as unemployed in the BLS's monthly job report (and to be included in the U-3 unemployment rate), the surveyed person must tell the surveyor that he/she looked for work sometime in the past 4 weeks (and it must be something more than looking at want ads - it must be activities like sending out resumes, filling out applications, and so on). (The unemployment numbers come from a monthly Household Survey of 60,000 households).

# As for the "insured unemployment rate" that is much discussed in this article -- which is the number of people currently receiving unemployment insurance as a percentage of the labor force -- that is based on state level data. But I'm looking at BLS's unemployed count vs. the total number in all programs collecting benefits so that doesn't apply to what I'm doing here.

# BLS misclassification errors -- some survey takers misclassified people on temporary layoff (furloughed) as employed when they should have been classified as unemployed, according to BLS's rules. This artifically lowered the BLS's unemployed numbers / unemployment rate ) -- in May that error was "about 3 percentage points", or about 5 million more that should have been counted as unemployed.

In August, the BLS say an upper bound on this error is 0.7% (which would be about 1 million people).


This one says there's a lot of fraud in the PUA program, the program for contract and gig workers -- NBC News 9/17/20

Over $1 billion in unemployment aid is being threatened by fraud, in schemes ranging from lying about personal income to sophisticated cybercrime, state and federal officials told NBC News. The main target: Pandemic Unemployment Assistance (PUA). The widespread fraud is plaguing unemployment systems nationwide, hampering states’ efforts to get money into the right hands. The U.S. Secret Service has launched over 500 investigations in 40 states as part of a multiagency effort to protect taxpayer dollars.

...in Colorado, authorities uncovered a much more technologically advanced scheme that threatened to pilfer over $1 billion in unemployment aid. Officials at the Colorado Department of Labor and Employment became suspicious in July when they saw a spike in pandemic unemployment assistance, or PUA, claims even though there was a decrease in regular unemployment claims. ... over the course of one month, 75 percent of applications were ruled fraudulent

In California, one of the first red flags was spotted in August when PUA claims more than doubled in the span of just two weeks. For the week ending Aug. 29, the number of claims in California represented more than half of all PUA claims filed nationwide.

In Pennsylvania, authorities uncovered an organized scheme that involved 10,000 jail and prison inmates applying for PUA benefits. Inmates would use their personal identification to apply for and qualify for benefits and then have the money sent to contacts on the outside. The scheme was discovered in July when law enforcement officers were monitoring inmate phone calls at Allegheny County Jail. In total, authorities say the crimes involved over $100 million.

The assistance program is particularly vulnerable because, since it is specifically for self-employed people or independent contractors, there is no employer to verify an applicant’s income. While the CARES Act legislation does ask applicants to submit documents to prove their income, it also allows people to receive the minimum benefit payment of $172 per week without any supporting paperwork.

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albacore Sep 2020 OP
ProfessorGAC Sep 2020 #1
CloudWatcher Sep 2020 #2
LineNew Reply The big discrepancy between jobs report 13.6 M unemployed, and 29.2 M collecting benefits
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