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- The average unemployment check is likely lower, according to federal data and an analysis of weighted averages.
- An analysis of the pool of unemployed workers support the claim that 40 percent of workers earn more on unemployment than the would working, but it's less than 25 percent when all workers are considered.
Rep. Adriano Espaillat, a Democrat who represents parts of the Bronx and upper Manhattan, weighed in on why businesses are struggling to fill job openings. He blamed low wages.
He tweeted: "So, let me get this straight: 40% of jobs in this country pay less than the average unemployment check of $750/week. There’s no labor shortage, there’s a living-wage shortage."
Is Espaillat right?
His deputy chief of staff, Candace Person, sent us two sources to support claim.
The first, a news story from CNBC from June 2020, said around 40 percent of all workers could theoretically receive more in unemployment benefits than by returning to work. The story cited an analysis by Noah Williams, director of the Center for Research on the Wisconsin Economy at the University of Wisconsin-Madison.
As for the amount of the average unemployment check, Person directed us to a public radio story. That story quoted Daniel Alpert, a senior fellow in macroeconomics and finance at Cornell Law school and an investment banker, who said state and federal benefits average about $750 per week across the country.
We looked into both parts of Espaillat’s claim.
We asked Williams, author of the study cited by Espaillat, about the number of jobs paying less than the average unemployment check of $750 per week.
The study took into account the Cares Act, which added a $600 federal unemployment benefit to what each state provides, which varies.
The share of unemployed workers who receive more on unemployment than when they worked is about 40%, he said. But the share of all workers who earn less than the typical unemployment check is lower, around 20%, he said. That’s because people who are unemployed are disproportionately lower-wage workers. Federal unemployment benefits have dropped since Williams’s study, and he said his study’s findings do not directly apply to current conditions.
But later research looked at unemployed workers now receiving the $300 federal supplement, in place through September, and 42% of them receive more in unemployment benefits than by working, he said.
The average weekly unemployment benefit is lower than what Espaillat said, according to the U.S. Department of Labor. Williams, from the University of Wisconsin, said that data through the end of April 2021 showed the average weekly benefit from state programs is $317 per week, or $617 with the $300 federal benefit added.
Another analysis, using weighted averages based on the state’s average unemployment benefit amount and the number of beneficiaries in the state, found that the average weekly benefit is $348.35, or $648.35 when the federal benefit is added. That analysis is from Gary Burtless, a senior fellow at the Brookings Institution.
The Bureau of Labor Statistics reports that 25 percent of full-time workers earned $657 or less in the first quarter of 2021, while 50 percent earned $989 or less. Data for how much money 40 percent of workers earned is not available.
Wayne Vroman, an economist with the Urban Institute, said benefits vary greatly by state. He said the claim that the average unemployment check is $750 could make people think the program is more generous than it really is.
We checked with Alpert, an investment banker and senior fellow at Cornell Law School, about his claim that the typical unemployment benefit is $750 per week. He said it will take months to figure out the precise amount, as more data comes in. He based his estimate on survey data, and he acknowledged other analyses could produce a lower estimate.
Alpert said he analyzed pay for the 5.7 million low-wage jobs listed among the 8.3 million total job openings in March 2021, as reported by the U.S. Department of Labor. Whether the average unemployment benefit is $617 or $750, it’s still higher than the average weekly wages of the vast majority of the unfilled jobs, he said.
(Not all of the jobs in Alpert’s analysis offered full-time work, which is reflected in their low weekly incomes).
Espaillat claimed that 40% of "jobs in this country" pay less than the average unemployment benefit of $750 per week.
Espaillat based his tweet on findings from credible sources, but one source was from spring 2020, when federal unemployment benefits were higher. A strict analysis of the available data show that the average benefit across states is around $618, or $648, if a weighted average is used.
Some data showed less than 25% of all jobs pay wages lower than the average unemployment benefit. Another study showed that 42% of people who are unemployed would receive more in unemployment benefits than what they would be paid to work.
There is some truth to Espaillat’s claim, when the pool of unemployed workers is considered, not the entire American workforce.
We rate this claim Half True.
Twitter, tweet, @RepEspaillat, June 8, 2021. Accessed June 8, 2021.
Email interview, Candace Person, deputy chief of staff and director of communications, Rep. Adriano Espaillat, June 9, 2021.
CNBC, article, "It pays to stay unemployed. That might be a good thing," June 10, 2020. Accessed June 10, 2021.
KNAU, "Half Of States Are Ending Pandemic Jobless Aid Early, And The Economy Could Suffer," June 3, 2021. Accessed June 10, 2021.
Phone interview, Wayne Vroman, economist, Urban Institute, June 9, 2021.
Email interview, Gary Burtless, senior fellow, Brookings Institution, June 8, 2021.
Email interview, Rebecca Poutasse, communications associate, Center on Budget and Policy Priorities, June 8, 2021.
Email interview, Peter Ganong, assistant professor, Harris Public Policy, University of Chicago, June 10, 2021.
U.S. Bureau of Labor Statistics, Economic News Release, "Table 5. Quartiles and selected deciles of usual weekly earnings of full-time wage and salary workers by selected characteristics, first quarter 2021 averages, not seasonally adjusted," April 16, 2021. Accessed June 11, 2021.
Phone interview, email interview, Ben Zupnick, economic analysis and information, New York Office, Bureau of Labor Statistics, June 15, 2021.
Email interview, Noah Williams, Juli Plant Grainger Professor of Economics, director, Center for Research on the Wisconsin Economy, University of Wisconsin, June 15, 2021.
Phone interview, Daniel Alpert, senior fellow, macroeconomics and finance, Cornell Law School, June 15, 2021.
Email interview, Till Marco von Wachter, professor of economics, UCLA, June 16, 2021.
Phone interview, Erica Groshen, senior economics advisor, Cornell University School of Industrial and Labor Relations and research fellow at the Upjohn Institute for Employment Research, June 14, 2021.
"US Unemployment Insurance Replacement Rates During the Pandemic," Peter Ganong, Pascal Noel, and Joseph Vavra, May 12, 2021. Accessed June 21, 2021.
U.S. Department of Labor, Employment and Training Administration, State UI Program Data, U.S. Totals, April 30, 2021. Accessed June 21, 2021.
JobQualityIndex.com, table," Low‐wage/Low Hours Jobs Suffered the Most Pandemic Job Losses And are Still Down for the Count," March 2021. Accessed June 22, 2022.
"Amid Labor Shortages, Some States Opt Out of Enhanced Jobless Benefits," Society for Human Resource Management, May 12, 2021. Accessed June 22, 2021.
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