Even as the federal government has paid out unemployment cash at an unprecedented level over the last three months, an estimated one-third of those laid off due to the pandemic’s economic meltdown have not gotten checks.
According to Bloomberg News, the feds disbursed a three-month record $146 billion in unemployment benefits over March, April and May. That’s more than all of 2009, when jobless rates skyrocketed due to the Great Recession.
But Bloomberg calculations estimate that the total in payouts that should have reached about $214 billion for the period, based on weekly unemployment filings and the average size of those claims.
For millions of Americans, the unemployment checks have not been in the mail. Or anywhere else.
Now, there’s “a huge hole,” said Jay Shambaugh, an economist at Brookings Institution who has been tracking the unemployment payments. “There’s a lot more money that should have gone out that has not gone out,” he told the news outlet.
The estimated gap of some $67 billion shows that states are failing to deliver on what they are supposed to do: Take care of as many as possible of the more than 40 million people who filed for unemployment as the economy shut down.
The COVID-19 crisis has triggered a massive economic dislocation. For example, the country’s manufacturing sector fell to its lowest output in 11 years in May, according to new data from the Institute for Supply Management (ISM). As reported, the mayhem “impacted all manufacturing sectors for the third straight month,” said ISM Chairman Timothy Fiore in a statement.
Meanwhile, economists estimate that another 1.8 million people filed for unemployment last week. That will push joblessness up to Great Depression levels.
What was supposed to happen, as the U.S. government ramped up programs — including a $600 weekly boost to unemployment benefits — was that the U.S. economy was stabilized. Another measure was to lower the standards for people to get unemployment benefits.
But it’s even more difficult to prop up the economy if millions of the unemployed are simply not getting the money.