Home Markets The Labor Department released flawed jobless claims data, government watchdog says —...

The Labor Department released flawed jobless claims data, government watchdog says — and most states underpaid jobless Americans

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Labor Department The U.S. Department of Labor building is pictured in Washington on Thursday, April 2, 2020.

  • The Labor Department reported false counts of week-to-week jobless benefit claims, and several states underpaid unemployed Americans through a key economic relief program, the Government Accountability Office said Monday.
  • Inconsistent state data, claims backlogs, and potential fraud in the benefits system resulted in “flawed week-to-week comparisons” of jobless claims data, the government watchdog said.
  • Average weekly payments through the Pandemic Unemployment Assistance program fell below the poverty line in 29 of the 41 states reporting data, the agency added. While some states made minimum payments first and plan to back-pay remaining totals, it’s unclear when the process can be completed.
  • The GAO’s report signals the virus’s economic fallout may be greater than first thought, and that most states aren’t paying out the immediate relief allocated by Congress.
  • Visit Business Insider’s homepage for more stories.

The Labor Department’s weekly tally of unemployment-insurance filings has reflected inaccurate data throughout the pandemic, and jobless Americans are being underpaid through the benefits program, the Government Accountability Office said Monday.

The historic number of unemployed Americans applying for benefits has skewed weekly claims figures for months, the government watchdog said in its report. Inconsistent state data, claims backlogs, and potential fraud in the benefits system has resulted in “flawed week-to-week comparisons of total claims numbers,” the GAO added.

Additionally, a program meant to provide benefits to workers who lost their jobs due to the pandemic has been underpaying recipients in most states. Some states paid minimum amounts first and aim to back-pay the rest of recipients’ claims once new tax information is taken into account. Still, average weekly payments through the Pandemic Unemployment Assistance program in September fell below the poverty line in 29 of 41 states reporting data, the GAO said. 

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“The expiration of supplemental payments for UI claimants may mean that some households’ income no longer exceeds poverty guidelines,” the watchdog 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 report details dire missteps in tallying and paying unemployed Americans as the coronavirus crisis rages on. Cases continue to soar higher in the US, and economic indicators suggest the pace of recovery has weakened through the fall as states reinstate partial lockdowns.

Roughly 9.1 million people were receiving PUA benefits in the week ended November 7, more than the number of those receiving regular state benefits. That’s up from about 8.7 million in the week ended October 31.

The GAO’s discovery that most states have been underpaying PUA recipients signals millions of Americans have endured the pandemic recession with less government aid than allocated by Congress.

PUA and an extension to regular benefits are slated to expire at the end of the year, further endangering those left jobless throughout the downturn. Congress reconvened on Monday for a brief session in which it could pass new fiscal support. Both President Donald Trump and President-elect Joe Biden have backed large-scale stimulus packages, but legislators remain worlds apart with respect to the price tag. Senate Republicans led by Mitch McConnell have pushed a $500 billion funding package, but House Democrats continue to back the $2.2 trillion HEROES Act they passed in early October.

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Even as the GAO warns of claim backlogs, jobless benefits remain elevated. Claims for unemployment benefits in the week that ended on November 21 totaled 778,000, the Labor Department said Wednesday. The reading exceeded the economist estimate of 730,000 and marked the first back-to-back jump in claims since July.

Though weekly claims counts are down significantly from the March high of nearly 7 million, they’re still well above the 665,000 seen during the worst week of the Great Recession.

To be sure, the GAO noted that repeatedly counting Americans who filed several claims might have resulted in some inflated counts. The agency recommended the Labor Department note in its weekly filings report that the figures “do not accurately estimate” the number of unique Americans claiming benefits. The GAO also recommended the department “pursue options” that more accurately tracks the exact number of Americans receiving benefits.

The Labor Department agreed with the former recommendation and partially agreed with the latter. The department disagreed that it should retroactively report the number of distinct individuals claiming UI benefits, in part because state programs could face challenges in updating its reporting requirements. Still, the GAO noted the department should attempt to revise its prior reports “because they are vital to understanding how many individuals are receiving UI benefits.”

“Without an accurate accounting of the number of individuals who are relying on UI and PUA benefits in as close to real-time as possible, policy makers may be challenged to respond to the crisis at hand,” the watchdog said.

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