Pandemic claims are not going away

When the pandemic started, unemployment claims skyrocketed to numbers never seen before.

Others have focused on the total number of claims being filed. What may be more useful is comparing this increase in claims to what occurred when there was no pandemic — aka last year — and how the claims data has varied over time.

So, what makes sense, then, is a ratio of new claims being filed for the equivalent week last year when there was no pandemic. This ratio would indicate both how these new claims compare to when there was no pandemic AND how the unemployment picture is changing over time.

Unfortunately, this picture is unsettling to say the least.

Ratio of 2020 claims to 2019 claims

Note: Here is the data for this chart:

w/e 2020  Week  Ratio
03/14/20    11  1.02
03/21/20    12  13.29
03/28/20    13  20.51
04/04/20    14  19.95
04/11/20    15  14.21
04/18/20    16  12.12
04/25/20    17  10.64
05/02/20    18  9.47
05/09/20    19  8.73
05/16/20    20  9.21
05/23/20    21  7.28
05/30/20    22  6.16
06/06/20    23  4.90
06/13/20    24  4.51
06/20/20    25  4.31
06/27/20    26  6.00
07/04/20    27  5.35
07/11/20    28  4.93
07/18/20    29  6.14
07/25/20    30  5.94


In week 11 of this year, claims in 2020 were equivalent to the same week of claims in 2019: 1.02 to be exact. Then the pandemic struck the next week, and unemployment claims skyrocketed to 13x what was filed in 2019. For the next two weeks, the number of claims continued to increase to around 20x what was filed in 2019.

Even when the number of new claims began declining, they continued at more than 10x the number of claims filed in 2019 for the next three weeks. Then, for another three weeks, initial claims continued to run at around 9x or 10x the number from 2019.

Only by week 21 did the number of initial claims come down to over 7x the number of 2019 claims. Since then, the number of initial claims has continued to hover around 6x the number of unemployment claims filed for the equivalent week in 2019. And, it seems that this trend will continue at least for the next several months.

So, in the best circumstances this pandemic has led to new unemployment claims continuing to be filed at 6x the rate of unemployment claims in 2019.

Note: This data is only for regular unemployment claims. Independent contractors and those with insufficient earnings to qualify for unemployment in the first place likely have never filed a claim for regular unemployment benefits in the first place and so are excluded from this data. In other words, the unemployment picture is being under-reported with this data.

At this rate, the question will soon be who in Wisconsin has NOT filed an unemployment claim, as the state’s workforce is only around 3 million in toto. I hate to say it, but these numbers are approaching Great Depression levels of joblessness. There is no indication — especially with Covid-19 cases on the rise — of any possible turn around with the economy any time soon. So, new unemployment claims will likely continue to be much higher than last year for months to come.

Note: In a robust economic recovery, we should expect the ratio of 2020 to 2019 claims to go smaller than 1.0. Pent up economic demand would lead companies to increase hiring to meet the accelerating demand for their product. Does anyone even pretend to talk about that kind of economic activity right now?

Second, all of us need to understand that this unemployment problem is not going away anytime soon. With so many initial claims now in the system, it will take months just for the folks currently with claims to find the same work they had before the pandemic. And, with new initial claims continuing to be filed at a record pace, the number of unemployed is now probably equal to the number of workers in this state who are outside the unemployment system. When winter arrives and many seasonal employees are laid off, the state’s economy will take another tremendous hit.

Accordingly, the economic stimulus that unemployment offers is currently an essential component of the economy and is keeping what economic activity that currently exists afloat. The loss of the $600 PUC benefit this week is going to have dire consequences, even in Wisconsin when too few have managed to receive any unemployment benefits at all. The end of 2020 when many if not all of the current CARES Act benefits expire could become a fiscal cliff for Wisconsin and the nation if nothing is done to extend these programs into 2021.

Third, this continued number of initial claims at roughly 6x the rate of last year indicates that the Department’s strategy of simply hiring more people to process these claims is unworkable. The Department’s July 13th news release about having 1884 staffers (1380 more than the 504 the Department had prior to the pandemic) is still wholly inadequate to handle the deluge of initial claims being filed.

Even with new initial claims now settled at 6x what was being filed before the pandemic, the Department’s increase in staff is only 3.75x what existed prior to the pandemic. To properly staff up for the number of initial claims currently being filed, the Department needs to have 3024 staffers on hand. And, that level of staffing would only work if initial claims remain at only 6x and do not rise any further from 2019 levels.

The Department cannot fix this unemployment problem in this state by hiring all of Wisconsin to process all of the unemployment claims. The Governor and the Department need to start talking now about some new policy choices to make the unemployment claim-filing process easier and more manageable. And, a jobs programs like the Civilian Conservation Corps are probably in order as well.

CCC worker at Devil's Lake


I know broadband access is a state-wide problem. Getting cheap and effective Internet access to folks in this state would do everyone a world of good, both in the short-term (jobs) and the long-term (more jobs). A British village can do it. Why not Wisconsin?


Next steps for SSDI recipients

Now that the Department will allow disabled workers to receive PUA benefits, here is what folks should do to get that PUA money into their hands as quickly as possible.

Filing a PUA claim

  1. If not already done, file a PUA claim with the Department by logging in at and then clicking on the file PUA claim link.
  2. If unsure of the status of your PUA claim, call the Department’s special PUA help line at 608-318-7100, available from 7:30 AM to 4:30 PM, Monday through Friday.
  3. If you have trouble understanding the on-line filing process or have difficulty connecting to the Internet and completing the on-line process, call the PUA help line at 608-318-7100, available from 7:30 AM to 4:30 PM, Monday through Friday, to file your claim over the phone.
  4. If you need to submit any documents in support of your claim, mail those documents to:Pandemic Unemployment Assistance (PUA) Program
    PO Box 7905
    Madison WI 53707

    There is, as of July 29th, a 10+ day wait for the Department to process any paperwork the Department receives. So, there is nothing gained by faxing a document to the Department. Send the paperwork by mail and wait. First-class, regular mail is sufficient and reliable.

  5. If you have any regular wage work that is covered under regular, normal unemployment, you need to apply and have your claim for regular unemployment benefits denied.If you are only an independent contractor, you do NOT need to file a claim for regular unemployment benefits.

    If you are not sure of your status as an independent contractor, file a claim for regular unemployment benefits.

  6. Once your claim for regular unemployment benefits is denied because you receive SSDI benefits, call the 608-318-7100 number and ask that your PUA claim be immediately processed.If an appeal of that initial determination regarding a claim for regular unemployment benefits has been filed, withdraw that appeal by calling the hearing office at 608-266-8010. Then call the PUA hotline at 608-318-7100 and ask that your PUA claim be immediately processed. The Department has explained that it will not wait for any appeal periods to run before it can start processing your PUA claim.

    Note: The Labor and Industry Review Commission has held that the statutory ban on regular unemployment benefits to the disabled will remain in place for the time being.

    CAUTION: Do NOT automatically withdraw an appeal/request for a hearing or automatically decide NOT to appeal all initial determinations you receive. The only issue you should NOT be appealing is a denial of regular unemployment because you receive SSDI benefits. I have seen several initial determinations involving disabled folks that deny them benefits because they reported not being available for full-time work. See below for more information.

    If you have doubts about the issue in question, call the hearing office at 608-266-8010 and ask one of the staff to explain what the issue is. The hearing office staff are generally knowledgeable and helpful.

  7. If you were told by anyone not to file a claim because your SSDI benefits make you ineligible, file your claim for regular unemployment and a claim for PUA benefits, if any of those claims still needs to be filed.
  8. Wait for a notice about your PUA claim application being approved to arrive in the mail. That notice will include a calculation of your weekly benefit rate for PUA benefits.Your weekly benefit rate is based on this formula. If your wages are insufficient to qualify for a weekly benefit rate that is less than $163, then you will be paid the minimum PUA weekly benefit rate in Wisconsin of $163.

Filing weekly certifications

  1. If you filed a claim for regular unemployment benefits, you also had to file weekly certifications with that claim. Those weekly claim certifications should automatically transfer over to your PUA claim.
  2. If you stopped filing those weekly certifications because of the delays or eligibility denials by the Department, call the PUA hotline at 608-318-7100 and ask to file those missing weekly certifications. Explain that the certifications are missing because the Department had originally denied your eligibility for all unemployment benefits because you were receiving SSDI benefits. 
  3. On those weekly certifications, report that you are available for full-time work. Even though all SSDI recipients typically work part-time jobs, for purposes of unemployment law you need to report that you are potentially available for full-time work (which the Department considers to be 32 or more hours per week).

    Note: this issue of availability when disabled is examined in detail in Tunisha Perkins, UI Hearing No. 11605816MW (11 January 2012). Unfortunately, the Department does not apply Perkins and will find you ineligible for failing to answer yes to being available for full-time work, causing an unnecessary hearing and delay in your benefits.

    If you have already filed weekly certifications that indicated you were not available for full-time work, submit a copy of the Perkins decision for your hearing.

  4. If you have not filed weekly certifications (because you have only filed a PUA claim and are waiting for the Department to approve your PUA claim), you can file those weekly certifications once the Department acts on your PUA claim.
  5. When reporting wages for independent contractor work on your PUA weekly certification, you report your profits minus your expenses when a wage payment is made to you.

    I still do not know when or how you report the hours worked for those wages as an independent contractor.

  6. You will only receive PUA benefits for each weekly certification you file. If you do not file a weekly certification for a week, you will NOT receive any PUA benefits for that week.
  7. If you return back to your job (or any job), you should probably skip filing a weekly certification if your work hours and pay are similar to what your were earning prior to the pandemic.

    For instance, if you averaged 15 hours a week at $10 per hour at your job prior to the pandemic, you should file weekly certifications when your hours of work are significantly less than 15 hours a week. But, once your hours approach 15 hours a week again (with similar pay), then you should skip filing your claim for that week.

  8. If you have trouble understanding the on-line filing process or have difficulty connecting to the Internet and completing the on-line process, call the PUA help line at 608-318-7100, available from 7:30 AM to 4:30 PM, Monday through Friday, to file your weekly certification over the phone.
  9. Once your weekly certifications are processed, the Department will begin paying out PUA benefits based on those certifications. The PUA benefits will come either by debit card or direct deposit into a bank account, depending on which payment method you selected.

Your PUA claim will start on the week you lost work because of the pandemic (in Wisconsin, probably sometime in March) and will be backdated to include all weeks from that starting week.

You will also receive the $600 PUC for all weeks claimed for weeks in April, May, June, and July (until the week ending July 25th).

Do not expect the Department to be mistake-free in processing these claims. I have received word already of an SSDI recipient having her PUA claim denied because she filed a claim for regular unemployment benefits for the same weeks of her PUA claim. Such a denial runs counter to the very procedure the Department is requiring claimants to follow for PUA claims.

The process outlined above is what the Department has explained it wants to follow for these claims. It is your best bet for getting PUA benefits as quickly as possible. Still, it is likely going to be at least another week to 3-4 weeks before you actually receive the PUA benefits due you.

PUA benefits now available to SSDI recipients

Last night I received from a source a letter from the Employment and Training Administration for the US Dep’t of Labor. This letter explained that SSDI recipients are eligible for PUA benefits.

Dear Secretary Frostman:

The U.S. Department of Labor (Department) received your letter regarding Coronavirus Aid, Relief, and Economic Security (CARES) Act, Pandemic Unemployment Assistance (PUA) eligibility for State of Wisconsin recipients of Social Security Disability Insurance (SSDI) payments. Your correspondence was forwarded to the Department’s Employment and Training Administration (ETA) for response. ETA is responsible for administering the federal-state Unemployment Insurance (UI) program within the Department.

Wisconsin’s state law provides that an individual is “ineligible for benefits” for each week in the month in which an individual receives SSDI. Wisconsin interprets this provision of its law as a prohibition on receiving regular unemployment compensation (UC) for individuals receiving SSDI. The plain language text of the Wisconsin law, and the Department’s understanding of the State’s interpretation of its law, would disqualify individuals who receive SSDI from eligibility for regular UC. Because these individuals are ineligible for regular UC, they meet the PUA eligibility requirement of “not eligible for regular compensation.” Therefore, if they are unemployed, have reduced employment, or are unable to work or are unavailable to work due to one of the specified COVID-19 reasons outlined in the CARES Act or the Department’s guidance in UI Program Letter No. 16-20, they may be eligible for PUA benefit.

Because Section 2102 of the CARES Act does not provide for the treatment of other income an individual may have, the Disaster Unemployment Assistance (DUA) regulations govern this issue. The DUA regulation at 20 C.F.R. 625.13(a)(6) provides that the prorated amount of SSDI an individual receives is required to be deducted from DUA payments but only to the extent that this benefit would be reduced under the applicable state law. Under Wisconsin law, SSDI income is not reduced from an individual’s entitlement to regular UC because, under the State’s law, an individual is ineligible for any UC if they are receiving SSDI. Therefore, it appears that under Wisconsin law, SSDI income would not be reduced from an individual’s DUA (or PUA) entitlement.

Thank you for your commitment to ensuring that payments of PUA are consistent with the applicable state and federal laws and regulations for this program. If you have any additional questions, please contact ETA at (XXX) XXX-XXXX.

John Pallasch
Assistant Secretary for Employment and Training

With this letter, 158,000+ workers in Wisconsin (and 314,000 workers in North Carolina who were caught in legal quagmires because of implementation problems in that state) now definitively qualify for PUA benefits, where before they had no options.


Princess Leia smiling

Update (28 July 2020): DWD is advising SSDI recipients to apply for PUA benefits. Fox6 has this report on the fix. Wisconsin Examiner has this report detailing the problem and this report on the fix.

Update (30 July 2020): Fox6 has this additional report on this change in policy. Wisconsin Watch follows up on folks affected by this change in policy. Wisconsin Examiner has this follow-up on this policy change.


SSDI — Waiting for the discrimination to end

Ever since Sec. Frostman issued his June 9th letter admitting that the denial of PUA benefits to the disabled did not follow the CARES Act and was also probably discriminatory, folks have been waiting for an actual change in Department policy on this issue.

Folks are waiting because Sec. Frostman did not actually change anything with this letter. Rather, he asked Sec. Scalia for the US Dep’t of Labor to OK this change in DWD policy.

Within a week of that letter, I was already hearing from my sources that the US Department of Labor would support this change soon. But, nothing happened.

And, still nothing happened.

Last week, some legislators began informing their disabled constituents that action by Sec. Scalia was imminent that same week. But, nothing happened.

Then, this week, on Tuesday evening, the Dep’t of Labor issued an Unemployment Insurance Program Letter (“UIPL”) No. 16-20, Change 2 (21 July 2020) with additional guidance on PUA benefits.

Unfortunately, this additional guidance did NOT include anything specific for those receiving SSDI benefits.

Ironically, this new guidance did indicate how corporate shareholders who are excluded from receiving regular unemployment are then eligible for PUA benefits.

Question: My state generally finds that a corporate shareholder is not “unemployed” because he or she continues to act on behalf of the company. Is a corporate shareholder eligible for PUA?

Answer: It depends. If the individual is a corporate shareholder and providing services for the corporation, the individual may be eligible for regular UC, depending on state law. If the individual performed services for the corporation and received compensation and is not eligible for regular UC, then he or she may be eligible for PUA, provided the individual is unemployed, partially unemployed, or unable or unavailable to work due to one or more of the COVID-19 related reasons listed in Section 2102(a)(3)(A)(ii)(I) of the CARES Act.

Those who have been following this issue with the disabled will quickly see that this reasoning for finding corporate shareholders eligible for PUA benefits is exactly the same reasoning that should apply to SSDI recipients who are excluded from receiving regular unemployment benefits under state law.

So, corporate shareholders who have lost work because of the pandemic can start receiving PUA benefits. The disabled? Still waiting.

As of yesterday (and after this examination of the issue), the Department updated its PUA FAQ to the following:

PUA-SSDI answer as of July 23rd

So, now the Department is making the wait official.

The problem with all of this waiting is that the answer has been obvious from the start, but the Department has been in denial.

Moreover, the US Dep’t of Labor knows the right answer already as well. Do not take my word for it either. This presentation makes absolutely clear that:

Section 188 of WIA and section 188 of WIOA prohibit discrimination based on disability in programs operated, and activities provided by, recipients of WIA and WIOA Title I financial assistance, or by one-stop partners.

WIA/WIOA nondiscrimination regulations prohibit these covered entities (either directly or through contractual, licensing, or other arrangements) from using standards, procedures, criteria or administrative methods that have the purpose or effect of subjecting qualified individuals with disabilities to discrimination on the basis of disability.

See presentation at 12.

SSDI eligibility is a standard enshrined in state law in Wisconsin and North Carolina that subjects these workers with disabilities to discrimination by preventing them from receiving the unemployment benefits due them but for their disability. There is no way around this conclusion: it is in the states’ statutes.

But, for some, unknown reason, this obvious conclusion cannot be acted on. And, so the disabled continue to wait and wait and wait.

The disabled have now been waiting since March of this year. In little more than a week, five months will have lapsed and August will be here. And, too many of the disabled will be facing evictions and continued lack of work. Many are no doubt wishing they had left Wisconsin or North Carolina a long time ago, as they would not be facing this unconscionable waiting anywhere else.

Denying UI to the disabled makes no sense

A time out for some politics.

Last week, the Dems introduced a bunch of proposals for peeling back some of the changes Walker had had made to unemployment, including an end to the ban on unemployment benefits for SSDI recipients.

As noted here previously, around 158,000 SSDI recipients work in some way in Wisconsin. As a result, one out of every twenty workers in this state is a disabled worker receiving SSDI benefits. This statement is not a mistake. One out of every twenty workers in this state is receiving SSDI benefits.

So, this ban is sucking money out of the recovery for one out of every twenty workers in this state. No wonder the UI trust fund did so well under Walker. One out of twenty workers is barred from ever collecting unemployment benefits no matter what happens to them.

And, this ban completely undercuts the whole of an unemployment system that is supposed to provide economic stimulus and support when times get tough. It makes no sense from any perspective except that of a greedy banker.


Yet, the Republican reaction to the Dem proposals was that these changes would somehow undercut the “economic success” of the last decade. Really? What economic success? The numbers for Wisconsin and the mid-west in general have been just awful. But for Dane County, Wisconsin has been losing jobs on the whole for the last several years. And, rural Wisconsin has been dying a slow death under these policies.

Ken Lonnquist has a column in the Isthmus about this idiocy:

These statements from Vos and Walker demonstrate ignorance, indifference, and even cruelty toward Wisconsin workers with disabilities. COVID-19 threw millions of people out of work, but it’s the Wisconsin Legislature that is throwing people with disabilities to the wolves.

Dealing with COVID-19 is hard enough for people with disabilities. Why deny these residents who lose their jobs the pandemic assistance that other workers are receiving? Why deny the Wisconsin economy the significant cash infusion this would bring?

Since mid-March, I’ve done a Facebook Live half-hour show for kids and families every weekday morning. It helps keep me in practice, entertains folks of all ages, and offers a resource to teachers seeking topics and themes for virtual study-units.

It gives me a little semblance of normalcy, and makes me feel like I’m doing something positive as we all endure this pandemic.

Our Legislature needs to do something positive, too.

If Republicans are serious about fixing the unemployment, they need to get the Legislature in session NOW and fix the UI system. Yes, DWD is not helping matters. For some reason DWD is still following the agenda of the previous administration. But, fixing some of the legal mistakes of the past should be a no-brainer.

Confusion abounds at DWD over SSDI

Note: Here is an appeal letter I filed today to the Labor and Industry Review Commission in two more SSDI cases.

Dear Commissioners:

On Ms. __’s behalf, I am petitioning for Commission review of the above-referenced matter.

This matter concerns the eligibility of SSDI recipients for unemployment benefits and PUA benefits and the discriminatory nature of Wisconsin’s prohibition against the disabled.

The same issues and arguments raised in Hearing No. 20602969MW are present in this case. Accordingly, here too I am asking for an expedited decision by the Commission in this matter.

One difference, however, is that the Department’s actions continue to sow additional confusion in regards to the legal questions at stake. I am attaching various documents that I ask the Commission to take administrative notice regarding the Department’s actions in regards to SSDI eligibility. As evident in these documents, the Department’s continued basis for denying PUA claims is the same state law that denies regular unemployment benefits to SSDI recipients, Wis. Stat. § 108.04(12)(f).

  • Ex.1 is an initial determination dated 2 June 2020 denying a claim for PUA benefits for the week ending 3/21/2020 for a recipient of SSDI benefits. The claimant here only applied for PUA benefits, as he is an independent contractor. For the Department, the applicable law is Wis. Stat. §§ 108.04(2)(h) and 108.04(12)(f).
  • Ex.2 is an initial determination two pages in length dated 26 June 2020 approving a claim for PUA benefits for the week ending 3/28/2020 for a recipient of SSDI benefits. The claimant here only applied for PUA benefits, as he is an independent contractor. For the Department, the applicable law is Pub. L. 116-136 (the CARES Act) and 20 CFR § 625.
  • Ex.3 is an initial determination dated 6 July 2020 denying a claim for PUA benefits for the week ending 5/9/2020 for the same claimant who was approved for PUA benefits in Ex.2. For the Department, the applicable law is Wis. Stat. §§ 108.04(2)(h) and 108.04(12)(f).
  • Ex.4 is a screenshot of PUA and PUC benefit payments the claimant in Ex.2 and Ex.3 received on 5 July 2020. In total, this claimant received his $163 weekly PUA for 13 weeks and a $600 PUC benefit for 12 weeks.
  • Ex.5 is an initial determination two pages in length dated 11 June 2020 approving a claim for PUA benefits for the week ending 3/28/2020 for a recipient of SSDI benefits. The claimant here only applied for PUA benefits, as she is an independent contractor. For the Department, the applicable law is Pub. L. 116-136 (the CARES Act) and 20 CFR § 625.
  • Ex.6 is an initial determination dated 15 June 2020 denying a claim for PUA benefits for the week ending 6/6/2020 for the same claimant who was approved for PUA benefits in Ex.5 . For the Department, the applicable law is Wis. Stat. §§ 108.04(2)(h) and 108.04(12)(f).
  • Ex.7 is an an initial determination dated 15 July 2020 denying a claim for PUA benefits for the week ending 3/28/2020 for the same claimant who was approved for PUA benefits in Ex.5 and then denied those benefits in Ex.6. For the Department, the applicable law is Wis. Stat. §§ 108.04(2)(h) and 108.04(12)(f).
  • Ex.8 is the debit card that the claimant in question in Ex.5, Ex.6, and Ex.7 received in the mail yesterday.
  • Ex.9 is a payment screen for the claimant in question in Ex.5-8 indicating payment for 11 weeks of PUA benefits and the $600 PUC benefit made on 15 July 2020.

I have no idea what is going on with these various determinations and actions by the Department. The Department’s FAQ for PUA benefits — — states the following as of today in regards to SSDI benefits:


Here is what at best can be gleaned from the Department’s actions. First, the Department is maintaining that state law governs both PUA and regular unemployment eligibility for the disabled. Second, by insisting that claimants determine how they are eligible by deciding which kind of benefit claim they pursue — regular or PUA — the Department is forcing claimants to pursue both kinds of claims given that the Department is denying both kinds of claims for the same reason.

Third, by failing to resolve issues on its own initiative, the Department is creating a situation that guarantees confusion and mistakes by Department personnel when processing these claims. The claimants who have received their PUA benefits despite initial determinations proclaiming them ineligible will face demands from the Department to repay these benefits. Some may avoid repayment through arguments over departmental error. Others will have to repay. As such, unemployment has essentially become a lottery system in which a few — after a legal battle — may eventually keep their unemployment benefits because they were “lucky” enough to have an error in their favor. Others, equally deserving, will have nothing unless the Commission acts quickly to correct what the Department is doing.

Claimants cannot and should not be expected to navigate on their own the legal issues involved with filing an unemployment claim and somehow guess how the Department will decide these issues at some future date. Such a requirement runs against the whole point of why and how unemployment was originally put into place in Wisconsin. All that claimants want and need is the stabilizing income unemployment is supposed to provide at a time of job loss. They do not care if the monies come from regular unemployment or PUA. That is a Department issue that the Department should be deciding.

The Department has failed to provide necessary guidance here. Under Wisconsin’s laws, the Commission has the authority and responsibility to decide issues of unemployment law and must make sure that the Department administers unemployment benefits pursuant to what state and federal law require. I ask that the Commission do so here.

Thank you.

Why the $600 PUC matters

With 140,000 claimants still waiting on their regular unemployment and (I’m conservatively guessing based on the amount of PUA paid out at the moment) 80,000 PUA applicants still waiting (see the small print at 2), the $600 PUC that has been paid to those found eligible seems more myth than reality.

This tweet explains what the consequences are for the nation when the $600 PUC goes away:

Binyamin Appelbaum @BCAppelbaum
Let’s talk about unemployment benefits.

The federal government is currently “employing” about 20 million Americans at a weekly wage of $600.

In about 10 days, it plans to lay off all of them.

What do you think that is going to do to the economy?

And, this twitter thread has the economics explanation of why the $600 PUC needs to continue right now:

Ernie Tedeschi @ernietedeschi
A short thread on the emergency $600 per week unemployment insurance payment, more formally known as Federal Pandemic Unemployment Compensation (FPUC) /1

FPUC payments are currently coming to around $18 billion per week, supporting 30 million workers. It’s the largest week-to-week federal COVID response program that’s still ongoing. /2

The FPUC raises wage replacement rates substantially for eligible workers: around 2/3 of them are now getting more from augmented UI than they did from their prior jobs. This raises the question of whether the FPUC has reduced job finding. /3

It’s a difficult question to tackle, since the US has never had wage replacement rates above 100% before, but also because the CARES Act relaxed work search requirements for everyone regardless of how generous their UI benefit is. /4

Nevertheless, I looked at transitions into and out of employment in May and June in the household survey, to see if higher wage replacement rates were generally a drag on job finding. I used the superb Ganong et al (2020) UI benefit calculator to link-in likely benefit rates. /5

That calculator is here: /6

I looked at both the linear effect of wage replacement rates on job finding and job leaving probabilities in May and June, as well as testing for whether there was a “kink” at 100% specifically. /7

The bottom line was that I found no evidence of any effect on labor market flows from more generous UI in May and June, controlling for other demographic factors. In fact some of the point-estimate coefficients were the “wrong” sign. /8



I tried it a variety of other ways unreported in my analysis too: adding controls for state reopenings and mobility, adding state rather than Census division fixed effects, doing the analysis as a panel with individual fixed effects. Nothing was statistically significant. /9

This doesn’t mean that the FPUC wouldn’t be binding in all states of the world. If the economy were at full employment, if there were no pandemic, and if the FPUC were a permanent rather than a temporary component of the UI system, I’d expect an effect. /10

But the results suggest that the FPUC isn’t remotely binding right now at the micro level. Given the macro support to the economy from the FPUC and the growing uncertainty over the economic & COVID outlook, I lean more and more that UI generosity should be maintained. /11

Full expiration would mean an economy that is 2% smaller by the end of 2020, and with 1.7 million fewer jobs, than if the FPUC were extended. /12


Even a partial compromise — $300 per week for the rest of the year — would still be an economy 1% smaller by year-end with 800,000 fewer jobs. /13


And those are just aggregate figures. At the individual level, workers would be devastated if the FPUC expired. Almost overnight, their incomes would be cut in half. In states like Arizona, Louisiana, and Mississippi, the typical worker would lose 75% of her benefits. /14


And in states with large populations of unemployed — states like Nevada that are heavily dependent on industries like tourism — losing the FPUC would be equivalent to losing a tenth of all state personal income. /15


This analysis honestly shifted my thinking. I’m still open to the theory that high wage replacement rates could be binding in the future. But I’m much less concerned about that in the near-term than I was, and more convinced that giving up generosity this year is unwise. /FIN

In that last chart, the states that are less affected by the loss of PUC are those states that have paid out less unemployment overall relative to their workforce. Since Wisconsin has been slow to approve unemployment benefits for claimants, the loss of PUC in this state will have less of an impact. Of course, Wisconsin has also gained less from the PUC in the first place because of DWD’s unwillingness to make the claims-filing process easier to navigate and adjudicate.

NELP editorial on unemployment delays

NELP staffers have an editorial about being “Unemployed in America, and tired of waiting.” Some key points to pay special attention to:

With roughly one in four workers having suffered some loss of employment since March, Congress has responded with federal dollars to bolster inadequate state unemployment compensation and to cover millions of workers who are not normally eligible. But these new programs and benefits are being delivered through a crumbling infrastructure that is collapsing under the weight of worker demand.

Unemployment was originally designed to provide massive economic stimulus to millions of workers during a recession. So, this system was the go to choice for economic stimulus under the CARES Act. But:

[S]tates have transitioned from in-person to telephone to online claim-filing systems because there are less and less federal dollars for staff. Yet, at the same time, there is no substantial federal investment or strategy for states to automate their claims systems. The result has been a long list of botched system launches and rickety online applications that work only so long as jobless workers do not pose challenges or questions requiring live assistance. In many states, online systems are not mobile-responsive and thus are impenetrable for many, especially Black and Latinx workers, who are more likely to be smartphone-dependent and without broadband at home. Adding insult to injury is a federal emphasis on fraud prevention that has led some states to incorporate new filing obstacles and others to misidentify honest workers as criminals.

Wisconsin checks all of these boxes. So, the delays and problems thousands of people are experiencing are simply a signal of how the current system has been designed as a hurdle to overcome rather than a helping hand. As a result:

[W]e need a true federal investment in claims systems infrastructure, organized around the principle that every worker who loses a job has a right to easily access unemployment insurance, no matter what their background or in what state they live.


The Department is still fighting eligibility for the disabled

On June 9th, Sec. Frostman indicated a change of heart at the Department, as the Department now considered the denial of PUA benefits to SSDI recipients to be both in violation of the CARES Act and discrimination against the disabled in violation of various federal requirements.

But, the Department delayed taking any action by pushing the issue back to federal authorities for additional clarification.

In the meantime, actual cases regarding the denial of unemployment eligibility continued. On June 30th, I filed an appeal in one of those cases. In this appeal, I asked the Commission for a quick decision in this matter, given how many of the disabled have been going without any unemployment support or work for months now.

The Department filed an answer on July 7th.

In contrast to Sec. Frostman’s letter, the Department maintained in this answer that the Commission should affirm the denial of benefits to this disabled worker because she received SSDI benefits and that any decision regarding her PUA benefits claim had to wait until the Department issued a decision (which the Department would NOT do until all her other claims and appeals were exhausted).

It was as if Sec. Frostman had never issued his letter at all.

Moreover, this answer was just plain wrong on about everything it said legally. So, I filed a response the next day.

For instance, the Department’s answer says that discrimination against the disabled regarding eligibility for SSDI recipients was previously decided by the Commission in Rose Hanley, UI Hearing No. 17600677MW (7 April 2017). That case can hardly be considered legally definitive, as no detailed argument or explanation is provided regarding the discrimination claim in question. Furthermore, that case concerned a claim of discrimination in violation of the Americans with Disabilities Act, which applies in employment and housing and access to buildings. As noted in my letter brief and Sec. Frostman’s letter, the federal discrimination laws that apply to the administration of unemployment benefits are quite different and specifically acknowledged by federal authorities and the Commission (but apparently not the Department as a whole) as applying to the administration of unemployment benefits.

My response to the Department’s answer also included the following poster, which used to hang in the unemployment offices of this state.

Unemployment poster

This poster indicates why all workers need unemployment benefits. But, in fighting a decision to find the disabled eligible for unemployment benefits, the Department is ignoring why Wisconsin invented unemployment benefits in the first place. A weekly benefit for food and shelter does not exist when the state agency actively takes every opportunity to deny unemployment benefits for weeks and now months at a time.

As I wrote in my response to the Department’s answer:

Today, July 8th, for the claimant featured in this media report — — I received an appeal confirmation for an appeal I filed on May 15th. It is beyond cruel to make SSDI recipients wait several more months for their PUA claims to be adjudicated in the Department’s discretion. People and their families literally are starving because of inaction and legal delays by the Department.

Despite Sec. Frostman’s June 9th letter admitting the denial of PUA benefits to the disabled is not supported by the CARES Act and is discriminatory, the Department is fighting a decision on this very issue and is instead only offering weeks of additional delay.

The people of Wisconsin deserve better.

Update (9 July 2020): for some basic information about who receives SSDI, see this explanation.

Update (17 July 2020): Fox6 has an update as well on SSDI folks still being denied.