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Government Watchdog: Unemployment Statistics Likely Inflated Due to Backlogs | Economy

Unemployment statistics reported each week by the Labor Department have likely been inflated during the pandemic because of backlogs and other data issues, the nonpartisan Government Accountability Office said in a report released Monday that examined the government’s response to the coronavirus pandemic.

The issue lies in the Labor Department’s reporting of the total number of people claiming jobless aid. The department does not independently count every person who claims unemployment benefits, but rather uses the the state-reported number of continuing claims – or the number of people receiving benefits week over week – as a stand in for the total number of workers receiving benefits.

This typically results in an accurate approximation. But during the pandemic, states have been inundated with unemployment claims, leading to backlogs in their systems. The backlogs mean an individual might receive multiple weeks worth of aid in a single week. If that happens, each individual week of benefits will show up as a continuing claim, causing continuous claims to outpace the number of individual workers receiving benefits, GAO said.

“Thus, by using claims counts to represent the number of people, individuals who submitted multiple claims are counted more than once in DOL’s estimate, which has been prevalent during the pandemic,” the report says.

States have also been inconsistent in reporting claims made of the Pandemic Unemployment Assistance program, which was created by Congress for people who don’t normally qualify for typical state benefits, including gig workers and the self-employed.

For example, an analysis of 20 states found that the number of continuing PUA claims exceed the cumulative number of people who made an initial claim for relief by more than 20 million.

Inaccurate statistics make it harder to draw meaningful conclusions about trends in the data which makes it difficult for lawmakers to respond effectively to the pandemic, particularly as two key unemployment programs are set to expire at the end of December, GAO said.

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In addition to backlogs, unemployment data has been affected by fraud and other inconsistencies.

The investigative watchdog agency also found that states are paying millions of workers the minimum benefit instead of the amount owed to them based on past earnings.

The GAO is calling on the Labor Department to state clearly in its weekly releases that the numbers it reports for total unemployment claims do not accurately reflect the number of individuals who are receiving benefits, and to “pursue options” to report the true number of people claiming benefits.

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