June 28, 2004

DESPITE JOB GROWTH, A RECORD 2 MILLION UNEMPLOYED
HAVE GONE WITHOUT BENEFITS

Even during recent months of robust job growth, very large numbers of
jobless workers have exhausted regular benefits and not received further federal aid
by Isaac Shapiro

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Thankfully, for three months running, the labor market has again been generating significant numbers of new jobs.  Unfortunately, new Labor Department data show that over the same three months an exceptionally large number of jobless workers exhausted their regular benefits and did not qualify for further federal aid.  The high level of “exhaustees” continues a pattern in place since late December, when the federal Temporary Extended Unemployment Compensation program quit providing additional aid to individuals newly exhausting their regular benefits.  The lingering high level of exhaustees suggests that the program was turned off too soon, and that it takes more than a few months of significant job growth to substantially reduce the problems of the long-term unemployed.

 

The Month-by-Month Data

The Temporary Extended Unemployment Compensation (TEUC) program was created in March 2002 to provide additional weeks of federally funded unemployment benefits to jobless workers who have run out of regular, state-funded unemployment benefits but have not found a job.  TEUC provided up to 13 weeks of benefits to most workers who participated in it.  Individuals who have exhausted their regular unemployment benefits since December 20, 2003 have not been eligible for TEUC aid.

The Labor Department just released new information on the number of unemployed individuals exhausting their regular unemployment benefits in May.  It shows:

 

Total Going Without Aid Exceeds 2 Million

Based in large part on the May data, this analysis estimates the number of unemployed who will exhaust their regular benefits in June, thereby creating a current estimate of how many unemployed have exhausted their regular benefits and gone without federal aid since the TEUC program was phased out.

State-by-state Data

This analysis also includes state-by-state estimates for the number of exhaustees from late December through June 2004.  While some state labor markets are stronger than others, the state-by-state estimates demonstrate that across the country, an exceptionally large number of unemployed workers have exhausted their regular benefits without finding work and have gone without a paycheck or unemployment benefits.  (See Appendix Table I for these state-by-state data.  For 28 states, the state data are available back to 1973.  The data go back to 1976 for the remaining states.)  After making state-by-state adjustments to reflect growth over time in the labor force, the data indicate:

 

Labor Market Health and Ending Federal Benefits

The positive news about job growth in recent months has received substantial attention.  The enduring severity of long-term unemployment has not.  This severity is documented by the above data, as well as by other labor market indicators.  For instance, in May:

Also of interest is that the temporary federal benefit programs in place in the early 1980s and early 1990s did not end until there were more jobs than there were at the start of the downturns to which they responded.  By contrast, as of today, there are still 1.3 million fewer jobs than there were at the start of the downturn.

Finally, even if job growth continues over the next several months, this analysis estimates that the pattern of the number of exhaustees setting monthly records will continue until October.  That is, in June there will be more exhaustees than in any other June on record, just as in July, August, and September it appears there will be more exhaustees than in the same months on record.

 

If the labor market continues to generate jobs at a healthy clip and long-term unemployment drops significantly, several months or so from now the absence of a temporary federal benefits program will be appropriate.  The findings here, however — that a record two million individuals have already been denied aid due to the end of the TEUC program and the continued pattern of monthly records — suggest not only that the program ended too soon but also that, for the time being, it is still needed.

Table 1

 

Estimated Number of Regular Program

After Adjusting for Labor Force Growth,

 

Exhaustees Not Qualifying for Additional Aid,

    How the Estimates Compare to

State

December 20, 2003 – June 2004

(rounded to nearest hundred)

        Other Years on Record*

 

 

 

Alabama

20,100

above average

Alaska*

1,500

above average

Arizona*

24,700

2nd highest

Arkansas*

19,700

highest

California

330,500

2nd highest

Colorado

28,500

3rd highest

Connecticut

27,200

2nd highest

Delaware*

4,800

above average

District of Columbia

7,200

above average

Florida

77,200

3rd highest

Georgia

53,600

above average

Hawaii*

4,200

above average

Idaho

11,600

above average

Illinois

97,900

2nd highest

Indiana

47,100

highest

Iowa*

16,600

3rd highest

Kansas*

18,100

3rd highest

Kentucky

17,500

above average

Louisiana

21,100

above average

Maine*

7,000

above average

Maryland

23,100

above average

Massachusetts

52,900

3rd highest

Michigan

83,000

2nd highest

Minnesota

34,500

above average

Mississippi*

12,400

above average

Missouri

38,900

3rd highest

Montana*

6,300

above average

Nebraska*

10,700

3rd highest

Nevada*

15,100

2nd highest

New Hampshire*

3,300

3rd highest

New Jersey

95,500

3rd highest

New Mexico*

8,600

above average

New York

162,400

2nd highest

North Carolina

68,000

highest

North Dakota*

3,500

above average

Ohio

60,500

2nd highest

Oklahoma

16,700

above average

Oregon

32,600

highest

Pennsylvania

93,800

highest

Rhode Island*

9,500

above average

South Carolina

29,400

highest

South Dakota*

1,000

above average

Tennessee

36,900

3rd highest

Texas

127,100

2nd highest

Utah*

11,400

above average

Vermont*

3,000

2nd highest

Virginia

28,400

above average

Washington

41,300

above average

West Virginia*

6,900

above average

Wisconsin

46,400

2nd highest

Wyoming*

2,800

above average

Source:  Center on Budget and Policy Priorities calculations based on U.S. Department of Labor data.
*Data available back through 1976.  In the other states, data available back through 1973.

End Notes

[1] Through the end of September the number will equal approximately 2.9 million.

[2] After adjusting for growth in the labor force, in May 1991 a larger number of individuals exhausted their regular benefits and did not immediately qualify for federal benefits than in May 2004.  However, later in 1991 a temporary federal program was enacted that “reached back” and provided benefits to those who had exhausted their benefits in May and were still unemployed.  Thus, in the absence of the resumption of the TEUC program that includes a reachback provision, there will be more exhaustees in May 2004 than there ultimately were in May 1991.  (This approach to accounting for reachback provisions was used throughout this analysis.)

[3] Center on Budget and Policy Priorities, “354,000 Exhaust Jobless Aid in March, Setting a One-Month RecordApril 26, 2004.

[4] These historical comparisons examine the number of individuals exhausting their regular benefits and going without further federal aid over the first six months of 2004 and compare them to six-month periods going back to the early 1970s.  That is, due to data limitations, exhaustions in the latter part of December 2003 are ignored in these historical comparisons.

[5] In Oregon, some additional aid was provided through special state programs that it funds.

[6] National Employment Law Project, “New Job Growth Has Little Effect on Long-term Joblessness,” June 2004.