I just sat through the legislative budget briefing on Zoom. Buried amid the revelations about how our unemployed selves are all smoking and drinking a lot more than we were last year, even with the bars closed, a nugget of information revealed about unemployment claims deserves a bit more attention.
About 1.4 million people filed for unemployment in Georgia since the pandemic started, not counting today’s numbers. The state had 4.9 million people employed before the pandemic. That implies that 35 percent of working Georgians got fired.
Here’s the thing that needs exploring. The state has given 740,000 people unemployment so far. Three out of four of those filings were partial unemployment claims for people who lost hours. (Those folks won’t count as “unemployed” for statistical purposes. Lovely.) But … what’s up with the other 700,000 filings? Have they not been processed yet, or were they processed and denied?
Representative Dar’shun Nicole Kendrick has been trying to get the Georgia Department of Labor to tell us what the claim denial rate is. The department has flatly refused to say.
Earlier this week, Timothy Mitchell at DoL responded to her inquiry thus: “We presently are unable to provide such information as we do not maintain such data. In order to accomplish what you are requesting would require a great amount of computer programming and constant updating due to the appeals process. Please advise if you require additional information.”
Let me say this again for the folks in the cheap seats. The Department of Labor says it doesn’t know how many people are being denied unemployment coverage. One would think if they know how many people are getting coverage, and they know how many people have applied, it would be a matter of subtracting the one number from the other. But what do I know.
Why is that information important? Well, I suggested a couple of weeks ago that the state was reopening early because the unemployment fund and budget issues looked catastrophic. Half of us are putting off our taxes until July. (Those would probably be the people who owe money and got canned.) The deadline change makes projecting the actual shortfall weird, but the budget manager said it looks like a $600 million hit for April. The state had about $2.9 billion in the bank when this started. General revenue will be hard, but the rainy day fund can probably handle it while we get the budget in order.
But unemployment is a different monster. If we’re paying 1.4 million people $300 a week, that’s $420 million a week in claims … or six weeks, since the fund had about $2.6 billion when this started. If only a quarter of claims are receiving full benefits (the full claim rate we have now), that’s $105 million a week plus the freight for the partial claims … or something less than six months. Probably half that. The state can only borrow $1 billion or so under the constitution … another 10 weeks (or less) of claims.
But if half the claims are being denied, the math changes.
I do not find it suspicious that the labor commissioner will say, loudly, that everything is fine and that everyone will be paid. The instant that Mark Butler suggests in public that the fund might not be able to carry the burden here without intervention, the bond market will start to trash Georgia’s credit rating, at a cost to taxpayers of millions of dollars. I do not expect a forthright analysis to emerge from his office about this.
One way to test my hypothesis would be to look at the rate of claim denial a year ago, across employment categories, and compare it to the claim denial rate now. If it has suddenly become a lot harder to get unemployment to pay up, it might be because they’re playing games with eligibility.
But the labor department doesn’t want to say. I find that suspicious.