Labor Department Published 'Flawed Estimates' of Weekly Jobless Claims, Watchdog Says

Jobless Numbers Are Flawed and Millions May Have Been Shortchanged Report

Jobless Numbers Are Flawed and Millions May Have Been Shortchanged Report

The closely watched weekly reports on US claims for unemployment benefits will soon come with a disclaimer that some key numbers aren't accurate, after a government watchdog found the figures to be "flawed".

States collect information to "pay unique individuals claiming UI benefits", GAO said, meaning they could provide the Labor Department with an accurate weekly count.

The nation's system for providing unemployment benefits to jobless workers has consistently produced inaccurate data and lower-than-appropriate payouts to some workers amid the Covid-19 pandemic, a government watchdog said Monday. Backlogs of claims have been particularly problematic, the GAO said, inflating numbers as states struggle to handle an avalanche of paperwork that in some cases dates backs weeks and months.

Officials with the U.S. Department of Labor told the GAO that many states made a decision to initially pay PUA recipients the minimum benefit instead of calculating how much they were eligible for in order to "facilitate implementation of the new program".

Among the 41 states reporting data the pandemic program in September, average benefits paid ranged from about $114 to about $357 per week.

GAO recommended that the Labor Department revise its weekly news releases to clarify that the numbers in the reports are not an accurate estimate of the number of individuals claiming benefits.

The report also found issues with accurately assessing how many people are receiving unemployment benefits.

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Not all states provided PUA data at the onset of the crisis, and many states have reported it inconsistently.

In response to the pandemic which triggered shutdowns and the loss of millions of jobs, Congress provided support through three programs.

The PUA program, created under the CARES Act signed into law in March, provides payments to Americans who are unemployed for reasons related to the COVID-19 pandemic but who would otherwise not be eligible to receive state unemployment insurance benefits, including gig workers and those who are self-employed. "DOL has traditionally used the total count of weeks claimed to estimate the number of individuals claiming benefits because the two numbers were a good approximation of each other".

Congressional negotiators have so far been unable to reach agreement on reviving these benefit programs with Democrats and Republicans remaining far apart on the size of another relief bill.

"The majority of states have been paying PUA claimants the minimum allowable benefit instead of the amount they are eligible for based on prior earnings", the GAO said.

In its most recent report, the Labor Department estimated that another 778,000 Americans filed initial unemployment claims during the week ending November 21. For instance, if a person submits claims for multiple weeks at a time, each week is counted as a separate claim - making it appear that more Americans are on unemployment than actually are. As a result, millions of households may have fallen below the poverty level after the Federal Pandemic Unemployment Compensation program, which provided an additional $600 in unemployment benefits, expired at the end of July.

It's possible the department has both overestimated and underestimated the number, the GAO says. The GAO countered that hundreds of billions of dollars have been set aside for unemployment programs and encouraged the Labor Department to correct the data, even if it takes time.

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