Historically high: Jobless claims vs Great Recession

New unemployment claims are trending down, but still rising and in the latest week were still nearly as high as the worst week of the Great Recession.

The pace of new unemployment claims slowed in Iowa to 13,040 for the week ending May 16, but still nearly as high as new claims in the worst week of the Great Recession. Meanwhile, the running total of new claims since mid-March — at 313,150 — is about 18 percent of Iowa’s entire labor force.

On top of that, Iowa has slowly begun to process claims for Pandemic Unemployment Assistance (PUA), the federally funded benefits for those ineligible for regular UI. In the week ending May 9, there were 15,219 Iowans on continuing PUA claims and 4,552 new applications.

The PUA has enormous potential for the self-employed, independent contractors, platform or “gig” workers, and new entrants to the labor force. It pays a weekly benefit of between $200 and $590 (depending on earnings and dependents). Once approved, recipients can received up to 39 weeks of benefits — retroactive to early February and running through December. Receipt of PUA benefits brings with it another $600 month in Pandemic Unemployment Compensation (PUC), the federal top-off that runs through the last week of July.

All of this is funded entirely with federal dollars — making it an important source of economic stimulus for the state as well.

But the rollout of the PUA has been slow. Initial applicants were summarily rejected by Iowa Workforce Development and the first payments did not trickle out until almost two months after the program was put in place. And the number of new and continuing PUA claims in Iowa (just under 20,000) as of this morning is very low given the number of Iowans that could benefit from this program (taken together, those reporting some form of self-employment income and new entrants probably account for about 20 percent of the labor force). Under normal conditions, Iowa pays unemployment claims to only about 41 percent of the unemployed. The PUA could and should extend that coverage dramatically.

Colin Gordon is senior research consultant for the Iowa Policy Project and a professor of history at the University of Iowa.

Author: iowapolicypoints

The Iowa Policy Project is a nonprofit, nonpartisan organization that provides research and analysis to engage Iowans in state policy decisions. We focus on tax and busget issues, the Iowa economy, and energy and environmental policy. By providing a foundation of fact-based, objective research and engaging the public in an informed discussion of policy alternatives, IPP advances effective, accountable and fair government.

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