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What the Coronavirus Unemployment Numbers Don't Say

Photo by Clem Onojeghuo on Unsplash

CECILY MAURAN, HOST: Over five million Americans filed for unemployment this week...that’s in addition to the 22 million who have filed since the start of the pandemic. But as high as that number is, it may underestimate the actual number of jobs lost. David Berger is professor of Economics at Duke University. He says the problem begins with filing for benefits.

DAVID BERGER: I don't know if you've tried to file for unemployment recently, but it's you know, my wife has a night. You know, it's kind of been eye-opening as an economist. I'm seeing how it actually works. It's can be a bit of a disaster. So, you know, typically the take up rates, meaning the fraction of people who actually are eligible who actually get unemployment is usually only 50 to 70 percent. So we're like, you know, around between 15 and 20 percent unemployment rates right now, which is, I mean, way higher than we've ever had since the Great Depression.

MAURAN: And that is unprecedented. You said it since the Great Depression?

BERGER: Since the 30s. I mean, you know, in the mid 70s and then the 80s recession, things went up to about 11 percent.

MAURAN: Just to get a better scale of this. Do you have any numbers top of mind to compare to the recession in 2008?

BERGER: These are significantly more, I want to say at least 40 percent more. And I think the bigger issue is the velocity. I mean, just to put in perspective, the first week, three weeks ago when we started seeing really big claims, you know, six million a week. I mean, that's roughly speaking the same amount of job loss we saw for the first six months of the Great Recession. So stuff we were seeing in one week when stuff was taking six months. But the problem is, you know, now we have to get unemployment through the states. Because the way unemployment insurance works, is they tax employers in good times. And so then they use that money to fund unemployment insurance. But like some states, like in North Carolina, the max benefit, you can get is 350 dollars a week. And so it's really exposed a lot of like cracks in the system because particularly with some of these new rules like there, they're very well set up a to be stingy about benefits. They just don't have the infrastructure and and people are out of work. And so, you know, people are calling and sitting on hold for two hours and it hangs up. So, I mean, it's a disaster.

MAURAN: Yeah, it's very complicated and it's revealing a lot of flaws within the system and the relationship between the federal and state regulations

BERGER: Absolutely. I mean, we defer to the states for these programs. I mean, just to, you know, contrast, say Canada. they have this benefit called CREB, where basically every week they're just depositing 500 dollars to everyone. And I suppose with this honor system and it you know, it shows up one day later, none of the administrative delay is like we have in the United States with like physical checks, with people's signatures on them. I mean, it's amazing.

MAURAN: So I wanted to jump back quickly to what you were saying about part time workers or gig workers, also people who are undocumented. Do the current numbers account for any of that. And if not, how can we how can we try and get more accurate numbers around that?

BERGER: The numbers are not accurate. I mean, particularly for undocumented workers. I mean, this is very difficult to ask them in any even in good times to liaise with the state. so it's very difficult to get good numbers on that for the gig workers historically. They're supposed to be eligible. However, you know, given that they are typically not eligible, it's likely that many of their claims are being denied. /too tight/ hopefully the idea hopefully would be that the they are applying so they would show up in the initial claims. They're claiming it, but they may not be actually getting the benefits. So I think we're probably picking up the gig workers, but the undocumented workers were almost certainly not.

MAURAN: What do you think are some easier thresholds that the country can overcome to make sure that people can sign up and thereby getting a more accurate reading of who is unemployed?

BERGER: I mean, I think at the state level, because these are all done at the state level, they just have to be way - whatever the institutional bottlenecks are, the kinds of checks that they're doing, they need to just override them and just give the benefits and then we can check later.

MAURAN: Send the money, ask questions later. David, thank you so much for helping to break down a very complicated issue and giving us more insight to what's working and what’s not.

BERGER: Sure. Happy to do it. Thanks for doing things like this.

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