Certain groups of workers, like the self-employed and those in the gig economy, are pulling in an increasing share of jobless benefits relative to others.
Around 12.9 million Americans are collecting unemployment benefits through the Pandemic Unemployment Assistance program, according to most recent Labor Department data.
That program, created by the federal CARES Act relief law enacted in March, extends jobless benefits to some workers previously ineligible for the jobless benefits traditionally offered by states.
These include the self-employed, independent contractors, gig-economy workers, those with limited recent work history and those looking for part-time work, among others.
That so many Americans are receiving aid through this new federal program suggests the system should be altered to provide unemployment benefits to these workers even in normal times, say some experts.
“If we think unemployment insurance is a good idea, why would you be excluding work that’s now characteristic of so many jobs?” asked Eric Groshen, a senior labor economics advisor at Cornell University and former commissioner of the Bureau of Labor Statistics.
Workers collecting benefits through the PUA program represented about 41% of the 31.5 million total unemployment benefit recipients nationwide as of June 13, according to most recent Labor Department data.
That’s up from a little over a third the month prior.
These workers can generally get benefits for up to 39 weeks, through the end of the year. Like other worker groups, they get an extra $600-a-week supplement through July 31.
The share increase is partly attributable to claims for traditional state unemployment benefits leveling off after a precipitous rise over the past three months, after state-mandated business closures led to mass layoffs and furloughs.
About 17.6 million Americans were collecting regular state benefits as of June 13, a decline of about 778,000 from the week prior.
Many businesses recalled furloughed workers back to their jobs as state economies have begun reopening. They may have also received federal loan money through the Paycheck Protection Program that offers incentives to rehire workers.
These dynamics would have largely helped those with traditional employment arrangements, rather than workers such as the self-employed and independent contractors, to come off the ranks of unemployment benefits, Groshen said.
Meanwhile, the number of PUA recipients has been ticking upward, with an increase of about 1.7 million people between June 6 and 13, according to the Labor Department.
any states struggled to get their PUA programs up and running amid a deluge of jobless claims in the first several weeks of the pandemic, said Stephen Woodbury, a labor economist at Michigan State University.
“The PUA program generally had a slow start,” he said.
A handful of states haven’t reported their numbers of weekly PUA recipients to the Labor Department. They include Florida, Georgia, New Hampshire, Oklahoma and West Virginia.
*by Greg Iacurci via CNBC*