To put that in perspective, in 2019 the average was 5,686. The average has remained around 30,000+ since July 1, 2020. Initial claims have NOT been decreasing (this week they increased again!).
In total, there are 730,251 workers in MA that are collecting benefits. Many of them are near the end of their benefits eligibility which ends in either 26 weeks or 26 + 13 weeks of extended benefits. Most began collecting in April, 2020
Put another way, last week there was close to 60,000 MA workers who are no longer receiving an unemployment check and probably don’t have a new job. Like the virus, the number of people living without income is about to grow to a point where it might overwhelm social services.
One can argue about how many claims will remain in the system, but one can’t dispute the actual dollars MA borrows from the U.S. Treasury to pay for these benefits.
As of October 14th, MA has borrowed $1,900,384,723. In the month of September, it borrowed $407,112,227.
Back of the envelop I assume MA runs a budget based on $35 billion in expected revenues. MA seems to be running 10% short of expected revenues. Therefore, MA is running up ~$300 million in debt every month, probably since April. Through a new $1.5 billion credit line from BofA, and accounting tricks, the government is keeping that simple fact from the public that doesn’t really want to know anyway.
The unemployment data suggests that the State will find much of itself blighted come 2021. It will have debts to pay off plus a large part of the population, without jobs, that must be fed, clothed and housed.
I created a model to predict when and how many people lose unemployment benefits in the coming months.
In the chart above I use weekly unemployment claims to estimate continued claims (assume a super conservative 30% conversion rate). My first question is why do I get close to the actual continued claims reported by MA? The answer, I believe, is that almost no one who lost their job in MA is getting it back, or a new one; that is, everyone who has filed for unemployment, since March, is taking the full 28 to 39 weeks.
If people were getting jobs the continued claims would be lower than my estimates from initial claims.
What we know for sure is MA has been borrowing $400 million a month to keep these people afloat. The question of who will pay for this isn’t as important as how much downward pressure such liabilities will exert on the MA economy in 2021 forward. We have the highest unemployment in the nation, or close to it.
The longer a balanced budget is pushed into the future, the costlier today’s liabilities.
In order to work with that data, you need to reference the data maps below for column descriptors and then the ETA 401 Handbook to make sense of what data is being collected.
States can slowly report what they’re doing from their citizens, but they can’t hide what they borrow from the U.S. Treasury, on a daily basis, or spend from various programs.
All the data meant to confuse.
At some point in the future I don’t expect bondholders to allow States like Massachusetts to be so slow in their reporting.
What kind of people are losing their jobs?…
Feel free to contact me at max at this site’s name.
UPDATE 10/1/20: Massachusetts reported 24,631 new Unemployment Insurance (UI) claims for the week ending 9/26, an increase of 1,057.
MA reported 10,925 Initial claims for Federally funded Pandemic Unemployment Assistance (PUA) .
For the week ending, 9/26, MA reported a total of 35,556 workers seeking unemployment benefits.
UPDATE 10/15/20: Massachusetts reported 39,063 new Unemployment Insurance (UI) claims for the week ending 10/10, an increase of 9,582.
10/8/20: Massachusetts reported 28,724 new Unemployment Insurance (UI) claims for the week ending 10/03, an increase of 3,264.
MA reported 11,478 Initial claims for Federally funded Pandemic Unemployment Assistance (PUA) .
UPDATE 10/22/20. Once again, weekly claims are up. 44,518. (PUA up too). Did you know that 25% of all claims are from people over the age of 55? Think about that. Over hundred thousand people in Massachusetts who, even in “normal” times, would find it hard to find a new position.
UPDATE 10/29/20. Once again, weekly claims are up. Close to 60,000 this past week. Did you know that 30% of all claims are from people over the age of 50?