Unprecedented: A Brief Review of the Extraordinary Unemployment Benefit Response to the Coronavirus Crisis

Key Points

• In the two weeks ending on March 28, 2020, 10 million American workers filed initial claims for unemployment insurance (UI) benefits, including a record 6.6 million in the week ending March 28, an unprecedented spike that came after a record labor market expansion. (Another 6.6 million initial claims were reported on April 9 for the week ending April 4, and the prior week was adjusted up. The total initial claims filed in the past three weeks ending April 4 totals nearly 17 million.)¹
• The federal government’s initial response to the enormous economic dislocation caused by the coronavirus has been equally unprecedented and ambitious and includes numerous changes, such as expanding the UI program and offering new unemployment benefits to millions of previously ineligible Americans.
• A number of these changes are specifically suited to an economy that is shuttered to slow the spread of the coronavirus. But when and where this health crisis eases and workers can safely return to work, those extraordinary policies should be lifted so workers and the US economy can quickly recover.

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Introduction

The recent rise in unemployment caused by the coronavirus crisis is unprecedented. The US labor market’s 113-month expansion came to an abrupt end in March 2020 as the nationwide response to the coronavirus took hold. Instead of unemployment rates matching 50-year lows, millions of American workers have filed for unemployment insurance (UI) benefits in recent weeks.

As displayed in Figure 1, initial UI claims have skyrocketed now that broad swaths of the economy are shut down.² For the week ending March 21, 2020, there were 3.3 million initial claimants for UI benefits, followed by 6.6 million initial claimants for the week ending March 28, 2020. The highest prior level in the program’s history was for the week ending October 2, 1982, when 695,000 individuals filed initial claims for UI benefits.

Never before in the UI program’s history have initial claims for benefits exceeded continuing claims, as has occurred over the past two weeks. As these unprecedented initial UI claims are processed, continuing claims data will skyrocket, too. Initial claims in the past two weeks suggest that more than 11 million Americans are now on (or about to be on) state UI benefits. That is already more than 50 percent greater than the prior national record of 6.6 million recorded in 2009 during the Great Recession.

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Notes

1. US Department of Labor, “Unemployment Insurance Weekly Claims,” press release, April 9, 2020, https://oui.doleta.gov/press/2020/040920.pdf.
2. US Department of Labor, Employment and Training Administration, “Office of Unemployment Insurance Weekly Claims Report,” https://oui.doleta.gov/unemploy/claims_arch.asp.