The Covid-19 pandemic has been a traumatic tragedy for many, not only because of the loss of lives of their loved ones but also due to the economic consequences of social distancing and lock-downs. The US welfare system has been unable to cope. State unemployment systems continue experiencing long delays, backlogs of unemployed claims, errors and long arbitration periods that have left millions of workers in the US without any unemployment benefits while they are out of work due to the coronavirus pandemic.
Several states still have thousands of unemployed claims backlogged. New Jersey has taken several weeks to restart benefits for 75,000 unemployed workers in the state whose benefits had expired in December 2020, but has yet to restart benefits for many still unemployed. The state’s labor department also noted about 20,000 claimants experience holds to their claims every week after answering a question wrong on their weekly claim.
According to a Washington Post analysis in January 2021, more than 1.2 million Americans were waiting on appeals to denied unemployment claims or for their initial claims to be processed.
An analysis of unemployed workers in January 2021 by the labor economist Eliza Forsythe at the University of Illinois, estimated unemployment systems are currently only reaching at most 30% of all unemployed workers, leaving an estimated 8 million unemployed Americans not receiving benefits.
Weekly unemployment claims have declined in recent weeks but have remained higher than the worst week of the 2008 recession for 49 straight weeks.
The US labor market currently has 9.9m fewer jobs than before the pandemic. Officially the US unemployment rate is 6.3% but as the Federal Reserve chair, Jerome Powell, noted last month the real unemployment rate in the US is closer to 10%.
The situation for many of those out of work is getting worse.
Delays in extending unemployment benefits across the US that expired on 26 December 2020 cost unemployed workers $17.6bn in lost benefits in the month of January 2021, according to an analysis. Pandemic unemployment benefits are set to begin expiring again for millions of Americans starting on 14 March if Congress doesn’t act to extend them in time. Millions who have relied on unemployment benefits for the past year of the pandemic may also be faced with expensive tax bills in April on their unemployment income.