The Unemployed Bulge
Unemployment Benefits Are Running Out
The carnage begins now, in September. Each week, from here out, tens of thousands of Massachusetts unemployed will lose their UI benefits. The bulge of people who lost their jobs in late March, 2020 are about to exhaust their benefits. (I focus on Massachusetts numbers). For this analysis I’m excluding the 13-weeks Pandemic Emergency Unemployment Compensation (PEUC) extension because it is unknown how many will be automatically enrolled.
Whenever benefits end, why is everyone so certain the Federal government can, or will, save them? In any of the dates below, feel free to push them back by three to six months.
The question remains the same. Without new jobs how can Massachusetts cope with all these jobless people?
Back on March 14th, 2020 it was another slow week at the Massachusetts Department of Unemployment Assistance. Around seven thousand people filed for unemployment insurance (UI). Generally, only half of those who filed would end up enrolled. If they didn’t find a job in 26 weeks Massachusetts would end up paying each roughly $300 a week, totalling $27 million for that week’s enrollments. No worries, the State had $1.7 billion in UI savings to pay for those who lost their jobs.
A week later, on March 21st, 148,422 workers filed for UI. Twenty-six weeks later, on September 19th, 2020, Massachusetts will have paid those unemployed workers (remember, about half that number) approximately $580 million.
In the next four weeks Massachusetts would be inundated with around 300,000 people ending up as beneficiaries. By next month, October, they will have collected $2.3 billion.
By the end of 2020 the $1.7 billion will have been wiped out and the State will have had to borrow almost $2.5 billion.
At the end of May, almost 600,000 people had lost their jobs and were paying their bills through UI benefits. That’s 1 out of every 6 people, employed in Massachusetts.
Since the beginning of June, the number of UI beneficiaries have been declining. However, the Federal Government created the Pandemic Unemployment Assistance (PUA) program for people who lost work but didn’t fulfil the requirements for UI.
The good news is that almost 1 million Massachusetts workers have been able to pay their bills. The bad news is that the program, and the latest trick of moving pandemic money into unemployment benefits, has confused the issue. Will these people get jobs when their benefits end? If not, who will support them?
Theoretically, we could witness hundreds of thousands of homeless next year!
I’ve tried to get clarity from the Massachusetts government and I have tried to prod reporters to pressure them for answers. (You know who you are).
Further complicating an assessment of everyone’s economic health is eviction and mortgage forbearance. One can’t manage what one doesn’t measure. How many people will lose their homes once these restraining orders end?
My analysis suggests that as of today, the beginning of September, 30% of all former workers are about to run out of standard UI benefits.
By the end of September, 50% of the people who lost their jobs from the pandemic will no longer be receiving checks. Many of those who would have filled those stadiums in the beginning of April will leave the UI program. In October, some weeks will experience 45,000+ cut off from benefits and facing poverty.
Despite a coming vaccine, the expected rise in the infection rate, from cooler weather, will keep business activity depressed.
By the end of October, 75% will be on their own.
By the end of December, it looks like everyone who lost their jobs from the onslaught of the pandemic will need to get work or — I don’t know what.
The government could survey these people for better statistics on how many have been rehired. It could survey to gauge their financial situation. The contact-tracers could add a few of these questions to their workflow.
By February 1st, 2021, Massachusetts is on track to count anywhere from 400,000 to 1 million residents, as permanently unemployed, bankrupt in all but legal designation.
Hopefully this isn’t what the data says. I’m waiting for someone to explain how it isn’t.
