Weekly unemployment claims inaccurate and unemployed underpaid, Watchdog says

The Ministry of Labor has both miscalculated the number of people receiving unemployment benefits and underpaid those under a special program instituted to combat the coronavirus pandemic, according to a government monitoring report on Monday.

Problems with the increase in the number of reimbursement requests from new programs aimed at dealing with the special circumstances of the pandemic have led to some problems, the General Accountability Office said. The errors moved back and forth, with recipients sometimes undercounted and sometimes overestimated due to multiple individual filings and issues unique to some states including California and Arizona.

At the same time, states are also underpaying displaced workers due to trade restrictions associated with the pandemic.

Rather than providing compensation based on past wages, states pay only the minimum required level. This has resulted in potential economic hardship as federal programs to address the situation are on the verge of exhaustion.

Congress has remained at a deadlock on extending benefits to those who file claims 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 who were not normally eligible for benefits to file a claim and those whose benefits had expired to file a claim. request under the emergency provision of the PUA. Neither has been renewed.

“The expiration of additional payments for UI recipients may mean that some household income no longer exceeds poverty guidelines,” the report said. “Additionally, with the expected expiration of some CARES Act benefits in December 2020, PUA applicants who remain unemployed may face additional hardships.”

The GAO also challenged how the Department of Labor reported weekly claims, which have surpassed the pre-pandemic record every week since mid-March.

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

A major problem in the weekly reports has been the backlog of cases, resulting in too low numbers. At the same time, the ministry sometimes repeatedly counts people who file multiple claims, resulting in too high counts.

“DOL has continued to collect and report claims data as it always has, which provides valuable information on the volume of claims submitted,” the report says. “However, due to the atypical unemployment environment during the pandemic, the use of these traditional methods has resulted in inaccurate reporting of the number of individuals receiving benefits.”

The GAO recommends that the ministry note in its weekly statement that “in the current context of unemployment, the numbers it reports for weeks of unemployment claimed do not accurately estimate the number of unique individuals claiming benefits.” DOL agreed with this recommendation.

Additionally, the ministry “partially accepted” a recommendation to use state-level data to more accurately represent the exact number of individuals collecting.