Revised February 19, 2002
HOUSE AVOIDS CLEAN EXTENSION OF UNEMPLOYMENT BENEFITS
AS 80,000 UNEMPLOYED WORKERS EXHAUST THEIR BENEFITS EACH WEEK
State-by-State Data Are Also Disturbing
by Wendell Primus, Isaac Shapiro and Jessica Goldberg
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The House of Representatives opted not to schedule a clean vote on the Senate-passed measure to provide 13 additional weeks of unemployment insurance (UI) benefits to workers who have exhausted their regular benefits. Rather, on February 14 the House passed essentially the same stimulus bill that it passed in December, even though this measure was able to garner only 48 of the 60 votes in the Senate required for adoption. With the number of workers exhausting their unemployment benefits mounting it is growing by about 80,000 each week, on average, or at a pace of 11,000 a day the House approach jeopardizes quick enactment of the additional weeks of benefits for these workers.
In contrast to the House approach, the Senate after being unable to reach the needed 60 votes for a stripped-down version of the stimulus bill adopted a simple extension of UI benefits by unanimous consent. The Senate approach is intended to ensure that those who have exhausted their benefits since September 11 and have been unable to return to work, as well as the more than two million unemployed workers expected to exhaust their benefits by mid-year, would continue to receive benefits for an additional 13 weeks just as they have during every recession since the 1960s. By refusing to take up a clean extension of UI benefits, the House places at risk the timely enactment of these benefits for those hit hardest by the recession.
This analysis explains the projection that two million unemployed workers will exhaust their benefits in the first half of 2002, an average of 80,000 per week. It also provides data on the number of workers in each state who have exhausted their unemployment benefits from September 11 until the end of last year, as well as the number projected to exhaust benefits in the first half of 2002. For instance, the data show that in California, which has the largest number of exhaustees, about 153,000 workers exhausted their regular benefits from September 11 to December 31, 2001. We estimate an additional 303,000 Californian workers will likely exhaust their benefits in the first six months of 2002 or 11,600 workers per week, on average.
More Than Two Million Workers Will Exhaust Benefits in First Half of 2002
More than two million unemployed workers are likely to exhaust their regular weeks of unemployment insurance benefits in the first six months of 2002, with about one million exhaustions occurring in each of the first and second quarters. On average, 11,000 workers are exhausting their benefits each day, and about 80,000 each week. The estimate that two million workers will exhaust their benefits in the first half of 2002 is comparable to estimates made by the Congressional Budget Office. It represents a sharp increase over the number of workers who exhausted their benefits in the first and second quarters of 2001.
The large anticipated number of expected exhaustions in the first six months of 2002 is due primarily to the very large number of people who began receiving unemployment benefits during the last six months of 2001. Since the number of people who began receiving benefits in the second half of 2001 is known, it is possible to project the level of exhaustions during the first half of 2002 with a fair degree of certainty.
Number of Actual and Projected Unemployed Workers Exhausting Regular Unemployment Benefits Actual Number of Workers Exhausting UI Benefits
9/11/01 to 12/31/01
Projected Number of Workers Exhausting UI Benefits
1/01/02 to 6/31/02
Average Number of Workers Projected to Exhaust UI Benefits Each Week
1/01/02 to 6/31/02
1.0 million 2.1 million 80,980
As shown in the table above, one million workers exhausted their UI benefits between September 11 and the end of 2001. Although many of these workers may have found new employment since exhausting their benefits, a significant portion are no doubt still seeking work and thus would be eligible for additional weeks of benefits if Congress provides such benefits. In addition to these workers, another 2.1 million or more than 80,000 per week are projected to exhaust their benefits during the first six months of 2002 and would potentially be eligible for additional benefits.
In each of the last five recessions, federally funded weeks of additional benefits have been made available to workers in all states who are facing the end of their period of eligibility for regular UI benefits, which typically are provided for 26 weeks, and who are unable to find new jobs or return to their former employment. But because the federal government has not provided additional weeks in this recession, the vast majority of those exhausting their regular benefits will receive no unemployment benefits to replace their lost wages, unless Congress and the President take action. Even adjusting for growth in the labor force since 1973, the number of exhaustees who do not receive any additional weeks of benefits is expected to be larger in the first quarter of 2002 than in the first quarter of any other year at least since the early 1970s.
(Currently, about six percent of exhaustees reside in the four states in which additional weeks of benefits have been or soon will be provided. The other 94 percent of the more than two million anticipated exhaustees are not receiving additional unemployment assistance. That is, of the approximately 80,000 workers currently estimated to be exhausting their regular UI benefits each week, more than 75,000 are not receiving additional weeks of assistance.)
The number of workers who exhaust their benefits is expected to be more than 750,000 higher during the first half of 2002 than it was during the first half of 2001. The increases between the corresponding periods in 2001 and 2002 in the number of workers who exhaust their regular unemployment benefits are expected to be larger than the increases experienced during the recession of the early 1990s, even though the unemployment rate was much higher then.
Table 1 that follows provides state-by-state estimates of the number of unemployed workers who would potentially benefit from the federal government providing additional weeks of unemployment benefits. The table shows the actual number of unemployed workers who exhausted their regular benefits between September 11 and the end of 2001, as well as the projected number of workers who will exhaust benefits during the first six months of 2002. The estimates for the first half of 2002 are based on the known number of individuals who first began receiving regular benefits in each state in the second half of 2001, and on projected "exhaustion rates" (i.e., projections of the percentage of individuals who first began receiving benefits in the second half of 2001 who are expected to exhaust their benefits in the first half of 2002), which are based on historical experience. The appendix provides a description of the methodology. (Note: Table 2 shows both a low estimate and a high estimate of the number of workers in each state who are projected to exhaust benefits during the first half of 2002. The state-by-state estimates shown in Table 1 represent the mid-point between the low estimate and the high estimate for each state.)
Number of UI Exhaustees Since September 11th and Projected Number During First Half of 2002
Number of Workers Exhausting Regular Benefits, Sept. 11-Dec. 31, 2001 Projected exhaustions,
first half 2002
Projected Number Exhausting Per Week, on Average Alabama 11,700 19,250 740 Alaska 4,600 11,250 430 Arizona 11,400 25,300 970 Arkansas 10,200 23,050 890 California 152,800 302,600 11,640 Colorado 12,600 34,000 1,310 Connecticut 12,100 24,000 920 Delaware 2,200 5,100 200 DC 2,500 7,350 280 Florida 43,200 84,750 3,260 Georgia 28,100 52,700 2,030 Hawaii* 2,500 8,000 310 Idaho 4,200 11,050 430 Illinois 48,800 97,900 3,770 Indiana 19,400 46,100 1,770 Iowa 6,500 14,550 560 Kansas 5,900 9,250 360 Kentucky 9,600 19,500 750 Louisiana 8,200 15,800 610 Maine NA NA NA Maryland 10,400 21,000 810 Massachusetts 27,500 59,250 2,280 Michigan 40,100 82,250 3,160 Minnesota 14,400 30,850 1,190 Mississippi 7,700 12,950 500 Missouri 16,500 37,000 1,420 Montana 2,200 4,500 170 Nebraska 3,700 7,500 290 Nevada 9,000 28,150 1,080 New Hampshire NA NA NA New Jersey 45,900 105,700 4,070 New Mexico 3,200 7,350 280 New York 84,400 200,150 7,700 North Carolina 28,800 59,700 2,300 North Dakota NA NA NA Ohio 28,900 53,200 2,050 Oklahoma 7,000 13,250 510 Oregon* 18,700 44,250 1,700 Pennsylvania 45,700 81,700 3,140 Puerto Rico 19,600 32,900 1,270 Rhode Island 4,500 9,100 350 South Carolina 14,600 30,550 1,180 South Dakota 400 700 30 Tennessee 22,800 46,550 1,790 Texas 80,200 176,800 6,800 Utah 5,500 13,300 510 Vermont 1,100 3,000 120 Virginia 10,700 24,750 950 Virgin Islands 200 250 10 Washington* 25,500 43,100 1,660 West Virginia 2,900 4,950 190 Wisconsin** 18,800 40,200 1,550 Wyoming 600 1,400 50 National 1,004,300 2,105,450 80,980 Source: Center on Budget and Policy Priorities. Projections based on number of individuals who first received UI benefits (a known number) and recent exhaustion rates. Projections shown here are the midpoint of the projections shown in Table 2.
* These states already provide extended or additional weeks of benefits to those who exhaust their regular benefits.
**Wisconsin will begin providing additional weeks of benefits on March 3rd to those who exhaust their regular benefits.
Projected Exhaustions, First Half 2002
Lower Bound Upper Bound Mid-point Projected Percent Increase,
First Half 2001 to First Half 2002
Alabama 16,800 21,700 19,250 11% Alaska 10,500 12,000 11,250 10% Arizona 25,100 25,500 25,300 139% Arkansas 22,000 24,100 23,050 56% California 301,900 303,300 302,600 56% Colorado 31,700 36,300 34,000 181% Connecticut 21,000 27,000 24,000 106% Delaware 4,100 6,100 5,100 85% DC 7,300 7,400 7,350 86% Florida 79,300 90,200 84,750 87% Georgia 48,600 56,800 52,700 87% Hawaii* 7,500 8,500 8,000 135% Idaho 9,800 12,300 11,050 40% Illinois 94,700 101,100 97,900 89% Indiana 46,000 46,200 46,100 57% Iowa 13,300 15,800 14,550 33% Kansas 8,100 10,400 9,250 8% Kentucky 17,900 21,100 19,500 74% Louisiana 15,200 16,400 15,800 20% Maine NA NA NA NA Maryland 21,000 21,000 21,000 59% Massachusetts 58,100 60,400 59,250 108% Michigan 79,600 84,900 82,250 51% Minnesota 30,000 31,700 30,850 63% Mississippi 12,600 13,300 12,950 24% Missouri 31,900 42,100 37,000 65% Montana 4,400 4,600 4,500 -4% Nebraska 7,400 7,600 7,500 40% Nevada 27,200 29,100 28,150 126% New Hampshire NA NA NA NA New Jersey 103,600 107,800 105,700 74% New Mexico 5,800 8,900 7,350 58% New York 194,700 205,600 200,150 88% North Carolina 53,600 65,800 59,700 105% North Dakota NA NA NA NA Ohio 50,500 55,900 53,200 63% Oklahoma 12,400 14,100 13,250 96% Oregon* 42,300 46,200 44,250 97% Pennsylvania 80,200 83,200 81,700 70% Puerto Rico 31,600 34,200 32,900 18% Rhode Island 9,000 9,200 9,100 43% South Carolina 28,200 32,900 30,550 87% South Dakota 700 700 700 51% Tennessee 42,700 50,400 46,550 43% Texas 174,700 178,900 176,800 103% Utah 13,000 13,600 13,300 77% Vermont 2,900 3,100 3,000 125% Virginia 23,900 25,600 24,750 90% Virgin Islands 200 300 250 23% Washington* 42,900 43,300 43,100 37% West Virginia 4,600 5,300 4,950 6% Wisconsin** 39,500 40,900 40,200 56% Wyoming 1,200 1,600 1,400 -14% National 2,026,900 2,184,000 2,105,450 71% Source: Center on Budget and Policy Priorities. Projections based on number of individuals who first received UI benefits (a known number) and recent exhaustion rates.
*These states already provide extended or additional weeks of benefits to those who exhaust their regular benefits.
**Wisconsin will begin providing additional weeks of benefits on March 3rd to those who exhaust their regular benefits.
Appendix. Detailed Description of Projection Methodology
A recent analysis by the Center on Budget and Policy Priorities predicted that more than two million unemployed workers will exhaust their regular unemployment insurance (UI) benefits during the first half of 2002, a figure that was confirmed by the Congressional Budget Office. This further analysis calculates expected exhaustions in each state.
The earlier analysis used the national number of people who first received UI benefits during the third and fourth quarters of 2001 and predicted exhaustion rates to determine the number of people expected to exhaust their benefits in the first half of 2002. Using the same formula and the number of people in each state who first received UI benefits during the third and fourth quarters of 2002, one can estimate the number of workers in each state who will exhaust benefits in the first half of 2002.
The earlier analysis predicting the national number of exhaustions assumed that the national exhaustion rate in the first quarter of 2002 would equal the national exhaustion rate in December 2001, and that the national exhaustion rate in the second quarter of 2002 would equal the national exhaustion rate in the fourth quarter of 2001. These assumptions followed recent seasonal patterns. One method we used to predict state exhaustions was to make the same assumptions about the state exhaustion rates as were made about the national rate; that is, we assume that in each state the first quarter 2002 exhaustion rate will equal the state's December 2001 exhaustion rate and the second quarter 2002 exhaustion rate will equal the state's fourth quarter 2001 exhaustion rate.
But because of variations in local labor markets, the seasonal pattern of the exhaustion rate is not the same in every state as it is nationally. For example, in some states the second quarter exhaustion rate is typically higher, not lower, than the first quarter exhaustion rate. So another method we used to predict state exhaustion rates was to assume that the recent increase in exhaustion rates will be maintained over the next six months. Using that method, the exhaustion rates for the first and second quarters of 2002 in each state is predicted assuming that the percentage increase between that state's fourth quarter 2000 and fourth quarter 2001 exhaustion rates will also be true for the states' first and second quarter 2001 exhaustion rates. This is probably a conservative assumption because exhaustion rates typically continue to accelerate during a recession.
Both methods of estimating state exhaustion rates yield state exhaustion levels that when summed up to the national level are consistent with the prediction of two million exhaustions nationally during the first half of 2002. Together, these two methods provide a range of exhaustions for each state (see Table 2). Data for three states (Maine, New Hampshire, and North Dakota) are not available because of data irregularities. In New Hampshire, the UI system functions on a uniform benefit calendar, so the vast majority of exhaustions come at a single point in the year.
- As shown in column four, nine states (Arizona, Colorado, Connecticut, Hawaii, Massachusetts, Nevada, North Carolina, Texas and Vermont) would have more than twice as many exhaustions in the first half of 2002 as they had in the first half of 2001.
- Another eight states (Delaware, Florida, Georgia, Illinois, New York, Oklahoma, South Carolina and Virginia), as well as the District of Columbia, would have increases of 85 and 100 percent in the number of exhaustions between the first half of 2001 and the first half of 2002.