Reversing the upward trend of the prior two weeks, Initial claims for the week of November 28 produced a significant drop both in California and the nation as a whole. In California, initial claims in the regular program were down 22.8% and PUA claims down by 6.1%. Nationally, regular program claims (not seasonally adjusted) dropped 14.6%, and PUA claims were down 9.5%. Combined, total initial claims dropped 19.9% in the state and 13.2% in the US.

The November 28 numbers show a more pronounced dip for California compared to the trend in recent weeks. While down, the decline for the other states still falls within the generalized stabilizing trend since early October. In both cases, however, claims remain high compared to historical levels.

These numbers do not necessarily reflect improving labor market conditions. The reporting period includes the Thanksgiving holiday, affecting both claims filed and the numbers processed by the states. The declining numbers also reflect continuing efforts by the states to combat the extensive fraud that became evident early in these programs as the upsurge in benefit amounts overwhelmed the management capabilities of the state agencies.

These numbers in California also reflect the situation that many workers have exhausted their regular benefits. The state’s restrictions including today’s stay-at-home measures continue to focus the economic costs on the same labor market segment of lower wage workers and have done so since they were begun in March. The higher wage industries and their workers instead have essentially continued as a separate tier of the economy made possible through telecommuting. Even in cases where telecommuting is feasible due to the nature of some lower and moderate wage jobs, state restrictions limit this option, and no actions have been taken to date to provide a more equitable playing field for these workers.

As a result, applications for an additional 13 weeks of extended benefits under the Pandemic Emergency Unemployment Compensation (PEUC) program remain high in California, exceeding 1 million a week since the week of October 17 and accounting for an average of 28% of all such claims nationally in this period. However, the PEUC along with the other emergency programs such as PUA expire at the end of the year. In the absence of congressional action to extend these benefits, the full economic consequences of the state’s current strategies on lower wage households will become more pressing.

In the current circumstances, any jobs recovery is tautologically “equitable” in that it will finally restore income opportunities to the lower income workers who have sustained the economic costs under the state’s current strategies. In the most recent county tier allocations under the state’s Blueprint for a Safer Economy, 99.4% of the state’s officially unemployed workers—not including workers who are no longer in the labor force—from the October data are in counties now subject to the most restrictive Tier1 provisions. And the longer these workers remain under these restrictions, the greater the likely dampening effects on their long-term income prospects.

The most recent backlog reports from EDD indicate a continued reversal in the previous progress in reducing the claims processing backlogs. While the overall numbers are down considerably from the beginning of this process, the initial claims backlog grew in the most recent week, while the continuing claims backlog was essentially unchanged. Backlogged initial claims are defined as those “applications for benefits that take more than 21 days to issue a first payment or to disqualify the individual, regardless of if the claimant or EDD need to take some kind of action.” Backlogged continuing claims are defined as a “subset of all individuals who received at least one payment and are now waiting more than 21 days for further processing of payment or disqualification.” Note that the EDD reports have changed for continuing claims and now report only weekly rather than daily results.