Fraud, back­logs stall job­less claims

La­bor Depart­ment re­ported a slight rise in the al­ready-high num­ber of aid ap­pli­cants

The Times-Tribune - - BUSINESS - BY CHRISTO­PHER RUGABER AND MARYCLAIRE DALE

AS­SO­CI­ATED Press WASH­ING­TON — Many Amer­i­can work­ers ap­ply­ing for un­em­ploy­ment ben­e­fits af­ter be­ing thrown out of a job by the coro­n­avirus face a new com­pli­ca­tion: States’ ef­forts to pre­vent fraud have de­layed or dis­rupted their pay­ments.

Cal­i­for­nia has said it will stop pro­cess­ing new ap­pli­ca­tions for two weeks as it seeks to re­duce back­logs and stop phony claims. Penn­syl­va­nia has found that up to 10,000 in­mates are im­prop­erly col­lect­ing aid.

The big­gest threat is posed by so­phis­ti­cated in­ter­na­tional fraud rings that of­ten use stolen iden­ti­ties to ap­ply for ben­e­fits, fill­ing out the forms with a wealth of ac­cu­rate in­for­ma­tion that en­ables their ap­pli­ca­tions to “sail through the sys­tem,” said Michele Ever­more, an ex­pert on job­less aid at the Na­tional Em­ploy­ment Law Project.

The bo­gus ap­pli­ca­tions have com­bined with large back­logs and mis­counts to make un­em­ploy­ment ben­e­fit data, a key eco­nomic in­di­ca­tor, a less-re­li­able mea­sure of the na­tion’s job mar­ket.

On Thurs­day, the La­bor Depart­ment said the num­ber of peo­ple ap­ply­ing for un­em­ploy­ment rose slightly last week to 870,000, a his­tor­i­cally high fig­ure that shows the out­break is still forc­ing many com­pa­nies to cut jobs, six months into the cri­sis that has killed more than 200,000 peo­ple in the U.S.

The over­all num­ber of peo­ple col­lect­ing job­less aid in the U.S. fell slightly to 12.6 mil­lion. The steady de­cline in re­cent weeks in­di­cates some of the un­em­ployed are get­ting re­hired. Yet it also means oth­ers have ex­hausted their ben­e­fits, which last six months in most states.

About 105,000 peo­ple who have used up their reg­u­lar aid were added to an ex­tended job­less ben­e­fit pro­gram, cre­ated in the eco­nomic re­lief pack­age ap­proved by Congress this spring. That pro­gram pays 1.6 mil­lion peo­ple.

Ap­pli­ca­tions for job­less aid soared in March af­ter the out­break sud­denly shut down busi­nesses across the U.S., throw­ing tens of mil­lions out of work and trig­ger­ing a deep re­ces­sion. Since then, as states have slowly re­opened their economies, about half the jobs that were ini­tially lost have been re­cov­ered.

Yet job growth has been slow­ing, and un­em­ploy­ment re­mains el­e­vated at 8.4%. Many em­ploy­ers ap­pear re­luc­tant to hire in the face of deep un­cer­tainty about the virus.

Most economists say it will be hard for the job mar­ket or the econ­omy to sus­tain a re­cov­ery un­less Congress en­acts an­other res­cue pack­age. The econ­omy may not fully re­cover un­til a vac­cine be­comes avail­able.

The con­cerns about fraud have fo­cused mainly on a new pro­gram, Pan­demic Un­em­ploy­ment As­sis­tance, which made self-em­ployed peo­ple, gig work­ers and con­trac­tors el­i­gi­ble for job­less aid for the first time.

The pro­gram has been tar­geted for fraud in many states and has also dou­ble-counted ben­e­fi­cia­ries. Last week, Cal­i­for­nia cut nearly in half the num­ber of peo­ple re­ceiv­ing ben­e­fits un­der PUA, ap­par­ently af­ter purg­ing dou­ble­counts. It now says 3.4 mil­lion peo­ple are col­lect­ing the aid.

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