Record-breaking unemployment claims may be vast undercount

By Rebecca Rainey

The 3.3 million new unemployment insurance claims that the Labor Department reported Thursday is likely a significant undercount, experts say, because laid-off workers have been calling into state unemployment agencies much faster than the agencies can process their requests.

"There is reason to believe ... that even the 3.283 million figure understates the case," said Richard Moody, chief economist at Regions Financial Corporation. "Many states have reported their systems for processing claims have crashed under the weight of unprecedented volumes."

A tidal wave of workers trying to file claims has overwhelmed websites and jammed phone lines at state unemployment agencies, leaving states scrambling to hire more staff.

The disparities between unemployment claims reported by the Bureau of Labor Statistics and ground-level reports from state agencies can be enormous.

More than 1.7 million calls were placed last week to the New York State Labor Department seeking unemployment benefits, the department reported Wednesday on Twitter. But according to DOL's count, only 80,334 New Yorkers applied for benefits.

New York is ground zero for the coronavirus pandemic, accounting for half of all reported cases nationwide.

"If you have been unable to get through our phone and/or online system this week, please keep trying," New York's labor agency tweeted Wednesday in an attempt to assuage growing concerns. "You will still receive full UI benefits back to your date of unemployment."

The department said one week ago that it was averaging 250,000 logins per day on its website. It is hiring 200 additional staff, has upped server capacity, and has dedicated 700 people to answering calls.

In Texas, the state's workforce commission said it received calls last week from more than 800,000 people trying to file unemployment claims, The Dallas Morning News reported Wednesday. But DOL reported only 155,657 new claims there.

California Gov. Gavin Newsom said Wednesday that the state received more than 1 million claims over the past two weeks. But last week, DOL only tallied 186,809 new claims there for the past week.

AFL-CIO Chief Economist Bill Spriggs noted that some states "make it particularly hard to get unemployment insurance," and that layoffs are heavily concentrated in the service industry, "where workers are typically discouraged from applying from benefits."

Also left out of DOL's count is the large swath of unemployed workers who aren't eligible for jobless benefits, like independent contractors ("gig workers"), those who don’t make enough to qualify, and those who haven't worked long enough at a new job to qualify.

The $2 trillion Senate coronavirus package passed late Wednesday would create a new fund to extend eligibility to those uncovered workers, and would kick in an extra $600 per week.

Marie French contributed to this report.