Emergency Money to the People – Direct Payments Help Those Without Unemployment Insurance

EMERGENCY MONEY FOR THE PEOPLE - DIRECT PAYMENTS

Two direct checks would keep 14 million people out of poverty this year

Summary: Poverty projections assuming one more round of direct payments are estimates of the number of people who would be kept out of poverty if each of the following three provisions in the HEROES Act were implemented: extension of unemployment insurance; one more round of additional direct cash payments; and SNAP expansion.“Of the three policies, the one with the greatest antipoverty effect, according to our projections, is the stimulus checks. A second round of checks alone would keep 8.3 million people out of poverty from August to December. The extension of unemployment benefits would have the next-largest effect, keeping 3.6 million people out of poverty. Finally, about 1.7 million people would be kept out of poverty by SNAP expansions. If all three policies are enacted, roughly 12.2 million people would be kept out of poverty for the rest of the year, including 4.5 million in households with a job loss.”

Poverty projections assuming two more rounds of direct payments assume the three proposals above are enacted, plus an additional round of identical direct payments. Urban Institute estimates that 6.3 million additional people would be kept out of poverty, in addition to the 12.2 million above. 

Sources: Urban Institute, “2020 Poverty Projections: Assessing Three Pandemic-Aid Policies,” and “Using Cash Payments to Reduce Poverty.”

Technical Notes on Unemployment Application and Recipiency Data

Jobless

Summary: From Census survey data, 76 million adults reported they had not worked for pay in the past seven days, excluding those whose reason for not working was that they were retired or did not want to work.

Details: In response to the question, “In the last 7 days, did you do ANY work for either pay or profit?” out of the total adult population of 249 million, 118 million had not worked the past seven days. Of those who hadn’t worked, when asked, “What is your main reason for not working for pay or profit?” 76 million gave a reason other than “retired” or “did not want to be employed at this time.” The full list of possible responses is below (and percentage of the 118 million respondents not working who selected the each reason):

  • I am retired (32%) – excluded from 76 million jobless
  • Other reason (15%)
  • I was laid off due to coronavirus pandemic (10%)
  • My employer experienced a reduction in business (including furlough) due to coronavirus pandemic (9%)
  • My employer closed temporarily due to the coronavirus pandemic (7%)
  • I was caring for children not in school or daycare (6%)
  • I was sick (not coronavirus related) or disabled (6%)
  • I was concerned about getting or spreading the coronavirus (5%)
  • I did not want to be employed at this time (4%) – excluded from 76 million jobless
  • I was sick with coronavirus symptoms (3%)
  • My employer went out of business due to the coronavirus pandemic (2%)
  • I was caring for an elderly person (1%)
  • I was caring for someone with coronavirus symptoms (0.5%)
  • Did not report reason (1%)

SourceU.S. Census Household Pulse Survey, Week 12 (July 16-21). Employment Tables 2 & 3. Data are number who reported not being employed for pay in the past 7 days, excluding those who reported not being employed because they are retired or because they did not want to work.

Completed applications and recipients

Summary: Of the 76 million jobless, an estimated 43 million completed applications for unemployment insurance, and 24 million were receiving regular state UI benefits at the end of July. Between 10 and 11 million were receiving temporary pandemic benefits (PUA). The Century Foundation estimates 43 million cumulative initial claims March 1 through July 15, and 24 million cumulative first payments made March through July.

Source: The Century Foundation, Unemployment Insurance Data Dashboard, Table 2.

Race and Ethnicity Estimates

Summary: Cross-tabs from Nyanya Browne and William Spriggs based on the COVID Impact Survey show that 24% of white jobless workers, 22% of Latinx workers, 13% of Black workers, and 18% of workers of other races were receiving unemployment benefits.

Details: The COVID Impact Survey determines the number of jobless similarly to the Pulse survey: “In the past 7 days, did you do any work for pay at a job or business?” As with the 72 million jobless number above, this analysis removes retired and voluntarily unemployed from the jobless count and shows UI application and receipt by race and gender. Below are the shares of application and receipt from the COVID Impact Survey by race, ethnicity, and gender:

Men Received Applied for Tried to Apply for Did Not Apply
(1) White, non-Hispanic 26.40% 18.70% 4.10% 50.80%
(2) Black, non-Hispanic 11.90% 18.30% 6.90% 62.90%
(3) Hispanic 28.70% 17.40% 4.80% 49.10%
(4) Other, non-Hispanic 19.30% 12.30% 14.90% 53.50%
Women Received Applied for Tried to Apply for Did Not Apply
(1) White, non-Hispanic 21.30% 16.90% 6.20% 55.60%
(2) Black, non-Hispanic 13.00% 11.70% 5.40% 69.90%
(3) Hispanic 16.60% 13.10% 12.70% 57.50%
(4) Other, non-Hispanic 16.20% 13.10% 2.30% 68.40%

Source: Nyanya Browne and William Spriggs cross-tabs of data retrieved from weeks 1-3 combined in Abigail Wozniak, Joe Willey, Jennifer Benz, and Nick Hart. COVID Impact Survey: Version 1 [dataset]. Chicago, IL: National Opinion Research Center, 2020. Week 1 data are from April April 20-26; week 2 are from May 4-10; and week 3 data are from June 1-8.

How do these numbers compare to other measures of jobless and unemployment insurance recipiency?

The jobless count is a simple, straightforward illustration of the number of people who are out of work and not by their own choosing (i.e., retired or don’t want to work). It’s not meant to show every American that should be eligible for unemployment insurance, but to show the breadth of the economic struggle during this recession compared to the relief that’s available. The 76 million jobless is from the Census Household Pulse Survey and is broader than the BLS estimates of the unemployed. BLS imposes additional requirements on who is considered in the labor force and unemployed, such as the requirement to be actively seeking work, while the Census number includes others who may not be able to seek work, e.g. 9 million who report having caregiving responsibilities, and another 9 million who were sick with COVID symptoms or afraid of getting or spreading COVID.

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