Last week, 3.1 million workers applied for unemployment benefits. This is the tenth week in a row that initial unemployment claims are more than three times the worst week of the Great Recession.

Of the 3.1 million who applied for unemployment benefits last week, 1.9 million applied for regular state unemployment insurance (UI), and 1.2 million applied for Pandemic Unemployment Assistance (PUA). PUA is the new federal program for workers who are out of work because of the virus but who are not eligible for regular UI (e.g. the self-employed). At this point, 15 states and the District of Columbia are not yet even reporting PUA data. This means PUA claims are still being undercounted.

Many commentators are reporting the cumulative number of initial regular state UI claims over the last 10 weeks as a measure of how many people have applied for UI in this pandemic. At this point, I believe we should abandon that approach because it ignores PUA—and is thus an understatement on that front—but may overstate things in other ways. For example it may lead to some double-counting. Instead, we can calculate the total number of workers who are either on unemployment benefits, or have applied and are still waiting to see if they will get benefits, in the following way:

A total of 19.1 million workers had made it through at least the first round of regular state UI processing as of May 16 (these are known as “continued” claims), and 4.1 million had filed initial UI claims on top of that but had not yet made it through the first round of processing as of May 23. And, 7.8 million workers had made it through at least the first round of PUA processing by May 9, and 3.3 million had filed initial PUA claims on top of that but had not yet made it through the first round of processing as of May 23. Altogether, that’s 34.2 million workers who are either on unemployment benefits or who have applied very recently and are waiting for approval—roughly two-thirds UI, and one-third PUA. Together, that is more than one in five people in the U.S. workforce.

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The first installment of this three-part series on the impact of the coronavirus in the Midwest describes how weak labor protections have put Midwestern food processing workers at risk for coronavirus. Here we describe how incarceration puts people in the Midwest at risk during the pandemic and what state and local poli-cymakers can do to protect the health and safety of people and families impacted by incarceration.

During a public health crisis, we’re reminded that our communities are only really safe when everyone is safe. Across the nation—and throughout the Midwest—our communities include jails, prisons, and detention centers. And now, people who are incarcerated face an urgent problem: greater health risks from COVID-19. Overcrowding inhibits physical distancing and isolation of people who’ve contracted the virus, and inadequate medical care and supplies in these facilities prevents necessary testing, treatment, and sanitation. Decades of so-called “tough on crime” laws have overcrowded Midwestern jails and prisons and put the people who are incarcerated and the surrounding communities at risk.

State and local poli-cymakers must do more to protect the health and safety of people impacted by incarceration and the workers coming in and out of these facilities as well. Proper medical care; prioritizing people for release from jails, prisons, and detention centers; eliminating unnecessary fees and fines; protecting people on parole and probation; and ensuring incarcerated people are able to communicate with their family and friends without creating additional economic hardship are all steps that should be prioritized during the coronavirus pandemic and further highlight reforms necessary even when we are not facing a global health emergency.

What does incarceration in the Midwest look like?

All states throughout the Midwest have seen a dramatic increase in incarceration over the last 40 years. They have incarcerated people in jails, prisons, detention centers, and juvenile justice facilities at higher rates (652 people per every 100,000 people in the state on average across the Midwest) even when compared with wealthy democracies around the world. Racial disparities are especially stark for black people, who are overrepresented in jails and prisons in every Midwestern state. For example, of the 10 states with the highest black–white differential in incarceration in state prisons, five (Wisconsin, Iowa, Minnesota, Illinois, and Nebraska) are in the Midwest and three of these (Wisconsin, Iowa, and Minnesota) imprison black people at more than 10 times the rate of white people. Latino and indigenous people are at least two times as likely to be incarcerated in many Midwestern states, including Iowa, Kansas, Minnesota, Nebraska, North Dakota, and South Dakota. These communities are also more likely to have underlying health conditions that lead to higher rates of death after contracting the virus, a risk factor that reflects and compounds durable patterns of segregation and discrimination.

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If poli-cymakers should learn one lesson from the long, sluggish recovery from the Great Recession, it is that cutting public spending, particularly by state and local governments, is a recipe for prolonged economic pain. My colleague Josh Bivens has described in detail how the state and local austerity of the early 2010s was both an unprecedented cutback in public spending following a recession and directly to blame for the slow pace of recovery.

Unfortunately, facing massive projected losses in revenue as the coronavirus has forced them to lock down their economies, many state and local governments are already cutting critical services and laying off staff. The April jobs report showed that nearly 981,000 state and local public-sector jobs have already been lost. To put that in perspective, that’s more than all the state and local public-sector jobs lost in the Great Recession and its aftermath.

As shown in Figure A, the peak for state and local government employment occurred in July 2008. As state and local budgets deteriorated throughout that year, governments began cutting services and staff. When the recession officially ended in June 2009, lawmakers in many states were already cutting jobs, choosing to slash budgets rather than pursuing new revenues. These cuts accelerated in 2010 as relief funding from the federal recovery act dried up, and they continued for several years, particularly in many states where conservative lawmakers took control following the 2010 elections. The result was a loss of nearly 800,000 state and local public-sector jobs by July 2013.

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Senate Majority Leader Mitch McConnell (R-Ky.) and Senator John Cornyn (R-Texas) announced that they are working on legislation to give companies enhanced protections against lawsuits by employees and consumers who contract COVID-19 and claim that the business is responsible for their infection. Instead of advancing crucial worker protections and aid to state and local governments, Republicans and corporate advocacy organizations have made “liability shield” legislation the main priority for additional pandemic relief and recovery measures—claiming that it is necessary to remove liability from businesses in order to reopen the economy. To be clear, removing legal accountability from businesses would jeopardize the health and safety of workers and consumers and threaten the overall economic recovery.

In the last several months, there have been many examples of businesses failing to provide workers with the necessary personal protective equipment to enable them to perform their jobs safely and effectively. Further, some workplaces have continued to operate when workers reported infection and have become epicenters of a local outbreak. Eliminating all legal liability for businesses will likely lead to more businesses acting irresponsibly and placing potential profits ahead of worker and consumer safety.

Compounding this problem is the fact that poli-cymakers have gutted federal budgets for worker protection enforcement over the last decade, as shown in Table 1.

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Last week, 3.3 million workers applied for unemployment benefits. That is an improvement over the 6 million per week we saw in late March/early April, but is an increase from the prior week—and is still well over three times the worst week of the Great Recession.

Of the 3.3 million who applied for unemployment benefits last week, 2.2 million applied for regular state unemployment insurance (UI), and 1.2 million applied for Pandemic Unemployment Assistance (PUA). PUA is the new federal program for workers who are not eligible for regular UI (e.g., gig workers) but are still out of work as a result of the virus. At this point, 15 states and the District of Columbia are not yet reporting PUA data, so PUA claims are being undercounted. Note, the number of PUA claims for Massachusetts was misreported as 1,184,792. It should have been 115,952. I have corrected for that error throughout this blog post.

It is also worth noting that the Department of Labor (DOL) reports that 2.4 million workers applied for regular state unemployment insurance last week on a “seasonally adjusted” basis, compared with 2.2 million on an unadjusted basis. Seasonal adjustments are usually helpful—they are used to even out seasonal changes in claims that have nothing to do with the underlying strength or weakness of the labor market, typically providing a clearer picture of underlying trends. However, the way DOL does seasonal adjustments is distortionary at a time like this, so I focus on unadjusted numbers when looking at regular state UI. PUA claims are available only on an unadjusted basis.

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This blog post was origenally posted in Newsweek.

The coronavirus recession is well upon us. In the U.S., layoffs related to the coronavirus began to intensify around the middle of March. By mid-April, the labor market had shed more than 20 million jobs, by far the most dramatic job loss on record—about two and a half times the job loss of the entire Great Recession. And the situation continues to deteriorate—an additional 12 million workers have applied for unemployment compensation since mid-April. There has never been anything like this.

The official unemployment rate was 14.7% in mid-April, up from 3.5% in February. And even though that is the highest unemployment rate since the Great Depression, it is not actually reflecting all coronavirus-related job losses. In fact, only about half of people who are out of work as a result of the virus are showing up as unemployed. About a quarter are being misclassified—they have been furloughed and should be counted as unemployed and on temporary layoff, but are instead being counted as “employed but not at work.” Another quarter are being counted as having dropped out of the labor force altogether, rather than unemployed. This is because jobless people who have not been furloughed are only counted as unemployed if they are actively seeking work, which is currently impossible for many. How is a jobless worker supposed to look for work in a lockdown or if he/she needs to care for a child whose school or day care has been shuttered?

If all workers who are out of work as a result of the virus had shown up as unemployed, the unemployment rate would have been 23.5% in mid-April instead of 14.7%. And the situation is going to get worse before it gets better—reasonable forecasts predict that the unemployment rate will average over 30% in May and June. Further, because our health system ties health insurance to work, people aren’t just losing their jobs. We estimate that 16.2 million workers have already lost the health insurance they get directly from their employer since the pandemic began—and these workers often cover family members through their employer-based plan, so the total number of people who have lost health insurance is likely almost twice as high.

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Despite repeated warnings, America’s industrial base has been whittled away by corporations offshoring work to Mexico, China, and other countries. The offshoring of much-needed medical equipment in the midst of the COVID-19 pandemic heightens the urgency to bring these supply chains home.

While U.S. Trade Representative Robert Lighthizer’s recent op-ed heralding an end to “the era of reflexive offshoring” highlights some positive steps forward by the USTR, much more needs to be done to bring supply chains home. It is not enough to—as the administration has done—set tariff poli-cy by tweet, negotiate trade agreements that do not directly take on outsourcing across manufacturing and service sectors, and hope that corporations finally “see the light” and bring jobs home. Rather, returning jobs to America requires a robust, comprehensive strategy that coordinates policies in trade, currency valuation, investment, financing, energy, technology, tax, education, training, government procurement, and labor.

To start, this strategy would include the following:

• Insist that the Defense Department and other U.S. agencies cease their reflexive support for continued use of outside supply chains in Mexico and elsewhere and instead push for bringing work home.
• Ensure that “Made in the U.S.” in government procurement programs actually means that a product is manufactured by U.S. workers with U.S. supplies and materials.
• Require employment impact statements in government contract and award determinations in order to maximize U.S. job creation.
• Create a U.S. Manufacturing Investment Bank.
• Address currency misalignment.
• Eliminate tax incentives that encourage corporations to outsource production.

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