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Congress using new unemployment report to make key funding decisions

Posted at 2:42 PM, Jun 11, 2020
and last updated 2020-06-11 17:48:53-04

Millions of people have filed for unemployment each week for the past two and a half months, with a peak of 6.9 million at the end of March.

On Thursday, the Department of Labor released its latest jobless claims report showing another 1.5 million people filed for unemployment last week.

However, with more than a million people still filing new unemployment claims, the Bureau of Labor Statistic’s monthly report showed the country’s unemployment rate declined from April to May by 1.4%.

“I think myself and many other analysts thought this is the report we would see next month,” said William Rodgers.

Rodgers is the Chief Economist and a professor of public policy at Rutgers University’s Edward J. Bloustein School of Planning and Public Policy. He and other experts have been surprised by the June unemployment situation because it seemed to be ahead of the weekly jobless numbers.

“BLS has noted, if they included or adjusted for how people had answered their questions, you would have an unemployment rate of about 16%,” added Rodgers.

While BLS acknowledges it may have miscategorized some respondents and that may have led to a lower unemployment rate reported, analysts and economists still have concerns about this month’s unemployment report. One of the biggest concerns are around the unemployment rate in minority communities. For example, the adjusted report showed a showed a decline in unemployment for white Americans but an increase in unemployment for those in minority communities.

“The big concern there that I have is that this is potentially writing the same rules we have seen in previous recessions,” said Rodgers. “That African Americans, Latinos and other groups, but especially African Americans, they are the first ones to be fired and they are the last ones to be hired when there is a recovery.”

The unemployment rate in minority communities is also particularly notable now, given continued protests and frustration around the country over racial disparities, institutionalized racism, and discrimination.

“We have the chance of the continued growing income inequality, which has led to instability, which has led to the visceral response and reaction we have seen to the murder of George Floyd,” said Rodgers.

Right now, in Congress, the unemployment rate and report are being used to decide key funding. Particularly, whether or not to provide a second round of stimulus checks and whether or not to extend the federal government $600 weekly PUA payment for those unemployed.

Republicans are pointing to the declining rate to pitch a position that there is no longer a need for either, while Democrats are pointing to BLS’s adjusted unemployment rate and other disparities realized in the report as an indicator that more Americans still need substantial help.