Weekly jobless claims counts are inaccurate and the unemployed are being underpaid, watchdog says

Categories: Unemployment

by Jeff Cox, CNBC

The Department of Labor has been both miscounting the number of people receiving unemployment benefits and underpaying those under a special program instituted to address the coronavirus pandemic, according to a government watchdog report Monday.

Issues dealing with the surge in those filing claims for the new programs aimed at addressing the special circumstances of the pandemic have led to some problems, the Government Accountability Office said. Mistakes have moved in both directions, with recipients sometimes undercounted and at other times overcounted due to multiple individual filings and issues particular to some states including California and Arizona.

At the same time, states also are underpaying those workers displaced because of the business restrictions associated with the pandemic.

Rather than provide compensation based on previous pay, states are paying out just the minimum level required. That has resulted in potential economic hardship as federal programs addressing the situation are about to run out.

Congress has remained in a stalemate over extending benefits to those filing under pandemic-related programs, which will expire at the end of the year. Separate provisions under the Pandemic Unemployment Assistance provision of the CARES Act allowed those not normally eligible for benefits to file, and for those whose benefits have expired to file under the emergency provision of the PUA. Neither has been renewed.

“The expiration of supplemental payments for UI claimants may mean that some households’ income no longer exceeds poverty guidelines,” the report said. “In addition, with the scheduled expiration of certain CARES Act benefits in December 2020, PUA claimants who remain unemployed may face additional hardship.”

The GAO also took issue with the way the Labor Department has been reporting weekly claims, which have run above the pre-pandemic record every week since mid-March.

“Without an accurate accounting of the number of individuals who are relying on these benefits in as close to real time as possible, policymakers may be challenged to respond to the crisis at hand,” the report said.

A primary issue in the weekly reporting has been with case backlogs, resulting in counts that are too low. At the same time, the department is sometimes counting people repeatedly who file multiple claims, resulting in some counts that are too high.

“DOL has continued to collect and report claims data in the ways it has historically, which provides some valuable information about the volume of claims submitted,” the report stated. “However, because of the atypical unemployment environment during the pandemic, the use of these traditional methods has resulted in the inaccurate reporting of information about the number of individuals receiving benefits.”

GAO recommends that the department notes in its weekly release that “in the current unemployment environment, the numbers it reports for weeks of unemployment claimed do not accurately estimate the number of unique individuals claiming benefits.” The DOL agreed with that recommendation.

In addition, the department “partially agreed” to a recommendation to use state-level data to more accurately represent the exact amount of individuals collecting.

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