GAO Says States Are Underpaying Unemployment Claims

The Government Accountability Office says the jobless benefits program consistently underpaid some workers.

Flawed Estimates 

The GAO claims the Labor Department Publishes ‘Flawed Estimates’ of Weekly Jobless Claims.

Weekly news releases issued by the Department of Labor (DOL) do not provide an accurate estimate of the total number of individuals actually claiming unemployment insurance (UI) because they have potentially both over-estimated and underestimated the total number of individuals actually claiming unemployment insurance. That is because DOL presents state-reported data on the total count of weeks claimed, nationwide, as the number of people claiming benefits. DOL has traditionally used the total count of weeks claimed to estimate the number of individuals claiming benefits because the two numbers were a good approximation of each other. However, due to state backlogs in processing claims and other data issues, these traditional estimates are not appropriate in the context of the pandemic. For example, state backlogs in processing claims led to individuals submitting claims for multiple weeks of retroactive benefits during single reporting periods. So, by using claims counts to represent the number of people, many individuals are counted more than once in DOL’s estimate.

In addition, DOL has also inaccurately characterized changes in claims numbers from week to week, in large part because of inconsistency in the group of states reporting Pandemic Unemployment Assistance (PUA) data each period. For example, in its July 23, 2020, publication, DOL reported that the number of claims in all programs for continuing unemployment during the week ending July 4 decreased by about 200,000 from the previous week. However, Arizona did not report PUA data for that week, after reporting almost 2.3 million claims the previous week. Had Arizona submitted data, DOL likely would have reported a significant increase in claims from the prior week instead of a decrease. To understand the role UI benefits are playing in the economy during the pandemic, reliable data are needed on both the number of new claimants each week and the number of claimants who continue to rely on UI benefits. DOL should revise its weekly news releases to clarify that in the current unemployment environment, the numbers it reports for weeks of unemployment claimed do not accurately estimate the number of unique individuals claiming benefits. DOL agreed.

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