A new report published by the California Policy Lab on September 15 adds important detail to the dramatic rise in Pandemic Unemployment Assistance (PUA) claims in California in recent weeks. Last week, California officials suggested “a big part” of the state’s recent rise in PUA claims “is linked to fraud.” As I noted previously, the rise in California’s continuing claims for PUA has been so massive that it accounts for all of the 33 percent increase in PUA continuing claims nationwide in the most recent two weeks of federal data. Meanwhile, PUA continuing claims outside of California fell in those two weeks.

Here are some highlights from the report, titled “An Analysis of Unemployment Insurance Claims in California During the COVID-19 Pandemic.”

Initial claims for PUA and Unemployment Insurance (UI) surged in recent weeks in California:

“California saw a surge in initial claims for PUA in August that led to the highest weekly count since the start of the PUA program. … EDD has stated concerns that a recent increase in fraudulent PUA claims may be contributing to this surge.” [Note: EDD is the California Employment Development Department, which administers unemployment benefits.]

“Initial claims for regular UI have also surged in late August, albeit less pronounced than PUA.” (Page 1)

 

The number of PUA continuing claims, which include backlogged weeks of benefits, has been driven up by recent claimants seeking more weeks of back benefits:   

“A dramatic and recent increase in the number of payments processed each week (often called “Continuing Claims”) has been driven by a rise in claimants certifying retroactively for multiple weeks of benefits. … The increase in retroactive payments has been primarily driven by new PUA claimants certifying for benefits for weeks of unemployment experienced back to the earlier stages of the crisis. The average number of payments each PUA claimant has certified for has risen from about four weeks in June to over eight weeks of payments more recently.” (Pages 1-2)

PUA recipients are far less likely than UI recipients to leave benefits:

“Throughout the summer, claimants of regular UI have been almost five times more likely to exit UI in any given week than those receiving PUA benefits.” (Page 2)

An enormous share of younger workers has claimed PUA or UI benefits:

“Table 5 of the report shows 58.8 percent of members of ‘Gen Z’ (ages 16-23) in the California labor force have filed a claim for UI or PUA since mid-March. That is nearly double the share of Millennials (32.0 percent; ages 24-39) or Gen X (32.5 percent; ages 40-55) who have applied for unemployment benefits.” (Page 17)  

Most California PUA claimants are previously self-employed individuals:

“We found that 89% of all initial PUA claims during the crisis were from previously self-employed individuals, with the remainder from individuals that had not qualified for regular UI for other reasons.” (Page 4)

The data suggest every self-employed person in California has filed a claim for PUA benefits:

“Since the start of the crisis, there have been 2.2 million PUA claims by individuals indicating previous self-employment. According to available estimates, there were only approximately 2.2 million self-employed individuals in CA prior to the start of the pandemic.” (Page 4)

This article was first published by the American Enterprise Institute. 

Image: Reuters