California Policy Lab Analysis Shows State’s Jobless Claims Surge “Startlingly High”

California unemployment claims have risen to “startlingly high” levels with the downward trend in jobless filings suggesting the recovery will be “mixed,” as the Golden State strives to add luster to its economy amid the COVID-19 pandemic. New analysis of Unemployment Insurance (UI) claims filed in August by researchers at California Policy Lab at UCLA and the Labor Market Information Division at the California EDD sheds light on the rapid increase in initial Pandemic Unemployment Insurance claims, the skyrocketing number of Continuing UI Claims, and provides insights on the state of the California labor market.

Till von Wachter, UCLA economics professor and faculty director at the California Policy Lab, who co-authored the analysis, says, “Our analysis paints a mixed picture of the recovery: new initial claims for regular UI (not counting PUA) fell below the Great Recession peak for several weeks in a row, a first in this crisis and a positive sign. Another positive sign is that our new measure of how many people are receiving UI benefits for a given week also continued to trend downwards.”

The researchers say this measure is a more accurate reflection of the true state of the labor market because unlike the published continuing claims numbers, it is less likely to be skewed by the recent surge of backdated claims.

Conversely, researchers noted they are seeing additional claims holding steady at a high level, which indicates repeat layoffs still may be occurring for a large number of people last month. There’s also a shift in demographics of new claimants, as recent filings were more likely to be male, older, and more highly educated. The researchers say that’s a sign that “typically more stable workers may now be losing jobs.”

Key research findings:
• The number of workers receiving unemployment benefits remains startlingly high. More than 3.5 million claimants, or 19% of the state’s labor force, were paid benefits for unemployment experienced in the week ending August 15th.
• California experienced a surge in initial claims for PUA in August that led to the highest weekly count since the start of the PUA program.
• Initial claims for regular UI also surged in late August, albeit less pronounced than PUA.
• 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.

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