WORKERS IN ACCOMMODATION AND FOOD SERVICES, RETAIL TRADE, and ARTS, ENTERTAINMENT ARE FILING MOST “ADDITIONAL CLAIMS”
Sacramento, August 6th, 2020— A new analysis of Unemployment Insurance (UI) claims in California by the California Policy Lab at UCLA and the Labor Market Information Division at the California Employment Development Department finds over half (57%) of regular initial unemployment claims filed during the week ending July 25th were from California workers who were re-opening older claims – the large majority of which were filed earlier in the crisis. In July, there was an average of 160,000 of these “additional claims” filed each week.
“Our new way of measuring initial claims finds that more than half the unemployment claims filed in July were from workers who were not experiencing their first job-separation, but had actually filed for unemployment previously. These individuals likely found or returned to work temporarily after their original UI claim, but then re-filed their claims as their hours or positions were cut (again) in response to communities re-instituting restrictions to combat a recent surge in COVID-19 cases,” explains Till von Wachter, a co-author of the analysis, UCLA economics professor and faculty director at the California Policy Lab. “The positive way to look at this this is that the number of different people participating in the UI system is actually a bit lower than headline initial claims numbers might indicate. However, it’s become apparent that for the individuals who have been lucky enough to return to work, they’re seeing that this new employment is especially unstable. Our data provides evidence that the uncertainty surrounding the pandemic is leading to more people cycling in and out of the UI system.”
Key research findings:
• The steady rise in initial claims since May 17th is driven by an increasing number of additional claims—claims which are “reopened” after a claimant’s temporary return to work. In the week ending July 25th, 57% of regular initial claims were additional claims, compared to just over 40% before the crisis, and approximately 5% at the peak of the crisis.
• Individuals filing additional claims are more likely to be female, younger, and Hispanic or Asian. Hispanic workers made up 44% of additional claimants in the week ending July 25th, but only 34% of the new initial claimants.
• The prevalence of additional claims varies dramatically between industries, with workers from Food Services, Retail Services, and Arts, Entertainment, and Recreation especially likely to re-open claims. In many sectors, the share of additional claims has risen dramatically since the peak of the crisis, and is also higher than pre-crisis levels. The Retail Trade industry stands out especially: less than 30% of initial claims from the industry were additional before the crisis, yet nearly 70% of initial claims were additional in the week ending July 25th.
• Excluding additional claims, the share of truly new initial claimants expecting to be recalled has steadily trended downwards, with just 65% of new filers in the week ending July 25th reporting they expect to be recalled to their employer. This is well below the 90% of claimants who filed for UI in late March and expected to be recalled, but still above the pre-crisis level of 30%.
• As illustrated in our Data Point, without the $600 per week additional benefits from FPUC, half of all individuals receiving UI benefits would have received payments below the Federal Poverty Level. California claimants have received $35.5 billion in FPUC payments for unemployment experienced between the start of the program and July 11th.
• Nearly one-third of California workers have filed for UI benefits since the start of the COVID-19 crisis in mid-March. This is the first time we are able to report the number of unique claimants in the state, instead of tallying all initial claims, which results in substantial double-counting. Since many of these 6.23 million workers have filed multiple claims, this total is substantially smaller (24% less) than the 8.18 million initial claims that have been filed in the same period.
• For the week ending July 11th, 3.28 million claimants, or about 17% of the CA labor force, were paid unemployment insurance benefits. 2.91 million individuals, or 15% of the labor force, received full benefits, without any reduction for earnings.
• The share of paid UI claimants receiving partial benefits (due to reporting some work earnings) has risen substantially since early May. In the week ending July 11th, 2.7% of the labor force either received partial UI benefits or were denied benefits due to excess earnings.
The analysis is based on analyzing initial unemployment insurance claims and continuing unemployment insurance claims from February 2020 (before the COVID-19 crisis impacted the labor market), through the start of the employment crisis in mid-March (when initial UI claims increased dramatically), up to more recently until July 25th.
The analysis complements traditional survey-based indicators on the labor market, which have detailed information but large time lags and lower frequently, and to weekly publications of the number of total UI claims, which have minimal time lags but which lack the detail available in this analysis.
This analysis will be updated on a regular basis with new data on initial Unemployment Insurance claims to provide a timely and detailed analysis of the impacts of COVID-19 on California’s labor market.
The California Policy Lab creates data-driven insights for the public good. Our mission is to partner with California’s state and local governments to generate scientific evidence that solves California’s most urgent problems, including homelessness, poverty, crime, and education inequality. We facilitate close working partnerships between policymakers and researchers at the University of California to help evaluate and improve public programs through empirical research and technical assistance.
The Labor Market Information Division (LMID) is the official source for California Labor Market Information. The LMID promotes California’s economic health by providing information to help people understand California’s economy and make informed labor market choices. We collect, analyze, and publish statistical data and reports on California’s labor force, industries, occupations, employment projections, wages and other important labor market and economic data.