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Labor Department Curbs Announcements of Company Violations

For years, the Labor Department has made a practice of issuing sternly worded news releases calling out companies deemed by its enforcement staff to have violated the law, including rules governing discrimination, worker safety, the minimum wage and overtime.

But the department’s appetite for using that spotlight appears to have waned.

In a Sept. 24 memo, a copy of which was obtained by The New York Times, Deputy Secretary Patrick Pizzella instructed the heads of the department’s enforcement agencies that “absent extraordinary circumstances,” the findings of their agencies “generally should not be the basis” for news releases.

Mr. Pizzella argued that such releases tend to linger prominently in search results about companies and can prove misleading if a citation or other enforcement action “is ultimately found to be unjustified.” He instructed officials responsible for enforcing labor and employment laws to generally refrain from issuing releases until after a matter has reached its conclusion — for example, once a court has issued a judgment or an employer has reached a settlement with the department.

Citations are often issued at roughly the same point in the enforcement process that a prosecutor would bring an indictment in a criminal matter.

The memo may be having some effect already. Since its flurry of releases about citations in mid-September, the Occupational Safety and Health Administration has not issued discrete news releases about particular companies for Covid-related violations, instead providing a weekly summary of proposed penalties with a table listing up to three dozen companies that have recently been cited.

The summaries include little detail about what violations the companies may have committed and no comments from department officials.

News of the memo alarmed some experts in workplace regulation, who see publicizing violations as one of the most cost-effective tools the department has for ensuring compliance with regulations, such as those enforced by OSHA.

“OSHA is a tiny agency, and if it doesn’t amplify the impact of its inspections it will have very little effect on almost every workplace in the United States,” said David Michaels, an epidemiologist who headed the agency under President Barack Obama. “The basis of every inspection is to increase deterrence.”

A Labor Department spokeswoman said, “The departmental memo is part of an effort to take a more thoughtful and deliberative approach that informs the public about bad actors while allowing accused labor unions and employers the opportunity to defend themselves.”

She added that the recent, consolidated announcements of Covid-related violations were a response to the rising number of such citations — “to make it easier for the public to see all of the establishments.”

Dr. Michaels, who now teaches at the George Washington University School of Public Health, is credited for increasing the practice of issuing news releases when he was at the department.

In 2009, he helped make it OSHA policy to put out a news release in any case where the agency had proposed a fine of roughly $40,000 or more. At the time, Dr. Michaels said the purpose was to discourage other employers from running afoul of OSHA rules. Borrowing from an academic literature on the subject, he called the approach “regulation by shaming.”

An article by the Duke University economist Matthew S. Johnson, published this year in The American Economic Review, concluded that the policy had largely achieved its goals. Mr. Johnson found that an OSHA news release led to a more than 70 percent reduction in violations at facilities in the same sector within roughly three miles of the company cited, and a 30 percent reduction in violations at facilities within 30 miles.

According to Mr. Johnson’s analysis, the releases created negative publicity in the local press, mobilizing workers at other companies to increase pressure on employers.

To have the same impact as a single news release through inspections alone, Mr. Johnson estimated, OSHA would need to perform more than 200 additional safety inspections.

After President Trump’s inauguration in 2017, it was unclear if his administration would continue the practice. But after Alexander Acosta, Mr. Trump’s first labor secretary, was sworn in that April, the department largely resumed its publicity strategy, albeit with less frequency.

Under the Obama administration, the news releases “tended to be scathing, inflammatory, embarrassing for the company,” said Eric J. Conn, a lawyer who represents employers in OSHA enforcement actions and follows the department’s releases closely. “There was a lot of, ‘This company made employees choose between their lives and a paycheck, that sort of tone.’”

“What was really surprising to us was when the Trump administration started issuing press releases again, they maintained those D.O.L. and OSHA official quotations,” Mr. Conn added. “They were maybe marginally less inflammatory, but they still followed that same pattern.”

That appeared to continue through the pandemic. In the second week of September, the department issued a series of news releases citing employers for Covid-related violations. Among them was a release about a plant owned by the pork producer Smithfield Foods and a separate release about a plant owned by its fellow meatpacking giant JBS, both of which were cited for “failing to protect employees from exposure to the coronavirus.”

“Employers need to take appropriate actions to protect their workers from the coronavirus,” OSHA’s Denver-area director said in the release about JBS.

Arthur G. Sapper, a lawyer at Ogletree Deakins who represents employers in such matters, said such releases undermined the rule of law.

“Employers spend decades and resources, often in the millions of dollars, to ensure their good name, and they treat their customers well, and they believe they treat employees well,” Mr. Sapper said. “But with one press release issued by a prosecution-minded agency without any review by an impartial observer, all that can be destroyed. And it stays destroyed even if the employer is later vindicated.”

Mr. Sapper said that he was aware of several instances in which citations were thrown out but the employer could not undo the damage caused by OSHA’s news releases. Mr. Conn argued that the department could just as easily wait until the cases were fully resolved before issuing a news release and still have a steady flow of enforcement actions to publicize.

But M. Patricia Smith, the Labor Department’s top lawyer under President Obama from 2010 to 2017, said publicizing the findings of enforcement actions was standard practice across government, including at the Justice Department, where prosecutors routinely publicize charges before any trial or settlement.

“Press releases are good compliance tools,” Ms. Smith said. “You want the general public, the regulated public, to know what you’re doing.”

She said it was relatively simple for the department to update a news release on its website if the case status changed.

Dr. Michaels said waiting until the legal process runs its course could take years, as deep-pocketed companies contest and appeal. “It will have no effect if it will occur long after the inspection occurs,” he said.

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OSHA Criticized for Lax Regulation of Meatpacking in Pandemic

When the pandemic hit in March, a JBS meatpacking plant in Greeley, Colo., began providing paid leave to workers at high risk of serious illness.

But last month, shortly after the plant was cited by the federal Occupational Safety and Health Administration for a serious virus-related safety violation and given two initial penalties totaling about $15,500, it brought the high-risk employees back to work.

“Now the company knows where the ceiling is,” said Kim Cordova, president of the United Food and Commercial Workers union local that represents the workers, about half a dozen of whom have died of Covid-19. “If other workers die, it’s not going to cost them that much.”

JBS USA said the return of the vulnerable workers in late September had nothing to do with the citation. “It was in response to the low number of Covid-19 cases at the facility for a sustained period of time,” a spokesman said, noting that the company began informing workers of the return in late July.

The JBS case reflects a skew in OSHA’s Covid-related citations, most of which it has announced since September: While the agency has announced initial penalties totaling over $1 million to dozens of health care facilities and nursing homes, it has announced fines for only two meatpacking plants for a total of less than $30,000. JBS and the owner of the second plant, Smithfield Foods, combined to take in tens of billions of dollars worldwide last year.

The meat industry has gotten the relatively light touch even as the virus has infected thousands of its workers — including more than 1,500 at the two facilities in question — and dozens have died.

“The number of plants with outbreaks was enormous around the country,” said David Michaels, an epidemiologist who headed the agency in the Obama administration and now teaches at the George Washington University School of Public Health. “But most OSHA offices haven’t yet issued any citations.”

The disparity in the way OSHA has treated health care and meatpacking is no accident. In April, the agency announced that it would largely avoid inspecting workplaces in person outside a small number of industries deemed most susceptible to coronavirus outbreaks, like health care, nursing homes and emergency response.

Experts concede that with limited resources for inspections, OSHA, part of the Labor Department, must set priorities according to risk. Some, like Dr. Michaels, argue that this makes it more important to issue a rule instructing employers on the steps they must take to keep workers safe. But the agency chose instead to issue a set of recommendations, like six feet of distance between workers on a meat-processing line.

A Labor Department spokeswoman said OSHA already had more general rules that “apply to protecting workers from the coronavirus.”

Around the time of the recommendations, President Trump signed an executive order declaring meatpacking plants “critical infrastructure” to help ensure that they remained open during the pandemic.

Some union officials representing health care workers praise OSHA for its enforcement work. “Given the times we live in, frankly I am thrilled that we’ve gotten OSHA to issue so many citations,” said Debbie White, president of the Health Professionals and Allied Employees, which represents about 14,000 nurses and other health workers in New Jersey and Pennsylvania.

“We see improved health and safety in the workplace because of those citations,” she said. “That’s a win for us.”

But when it comes to meatpacking, many union officials and safety experts said there had largely been a regulatory vacuum, one they worry will lead to another round of outbreaks as cases spike again this fall.

“We’re worried that we’re going to see what happened happen again,” Ms. Cordova of the Colorado local said.

OSHA’s oversight of the meatpacking industry has been in the spotlight in a case filed by workers at a Maid-Rite plant in Dunmore, Pa., accusing the agency of lax regulation.

The suit contended that OSHA had done little for weeks after a worker filed a complaint in April describing insufficient precautions amid an outbreak at the plant, and after other workers filed a complaint in May asserting that they faced “imminent danger” because of the risk of infection there.

When OSHA finds that conditions pose an “imminent danger” to workers, it typically intervenes quickly and asks the employer to mitigate the risk. But in a hearing before a federal judge in late July, a local OSHA official testified that she did not consider the term to be appropriate in the Maid-Rite case.

The official said that because OSHA’s central office had designated all meatpacking facilities to be “medium risk,” the agency would not rush to conduct a formal inspection absent some “outlying” issue. The OSHA area director said that of nearly 300 Covid-related complaints his office had received at the time, it had not deemed any an imminent danger.

The agency inspected the Maid-Rite plant on July 9, months after the initial complaint, finding that many workers were spaced two to three feet apart with no barriers separating them. A Labor Department lawyer said at the hearing that OSHA was still studying the feasibility of requiring the company to space them farther apart.

A Maid-Rite spokeswoman said the company was following guidelines suggested by the Centers for Disease Control and Prevention, “as we have been since they were released.”

OSHA has also been accused by union officials and even company executives of having been slow to visit the two meatpacking facilities that it has cited so far.

Ms. Cordova sent the agency a letter on March 23 asking it to conduct a spot check of the JBS plant and several other workplaces that her union represents. In response, she said, a local OSHA official told her that his office did not have capacity for inspections.

The agency eventually visited the 3,000-worker plant on May 14, after the plant had closed amid an outbreak and then reopened, and several workers had died.

At Smithfield, whose plant in Sioux Falls, S.D., was the other one cited by OSHA, even the company professed frustration over the agency’s inspection constraints.

Keira Lombardo, a Smithfield executive vice president, said in a statement that the company had “repeatedly urged OSHA to commit the time and resources to visit our operations in March and April,” adding, “They did not do so.”

The Labor Department spokeswoman said the agency had six months to complete an investigation under the law.

B.J. Motley, the president of the United Food and Commercial Workers local representing workers at the plant, said an OSHA inspection there in mid-May had been thorough, including several dozen interviews. But he said that the company had taken too long to add safety features, and that the penalty was insufficient.

According to Ms. Cordova and Mr. Motley, both plants have provided protective equipment like masks since the spring, but workers often still stand within a few feet of one another.

JBS and Smithfield said they were contesting their citations because the violations applied to conditions at their plants before OSHA had issued guidance. “It attempts to impose a standard that did not exist in March,” the JBS spokesman said.

The companies do not have to take the steps the agency recommended, such as distancing, while they contest the citations, but said their current standards largely exceeded OSHA’s guidance. Both companies said that they had installed barriers between many workers, taken air-purification measures and started virus screening and testing programs. They said that many of the safety measures were in place by late April, and that the rates of infection among their workers were low today.

The Labor Department has defended the penalties for JBS and Smithfield as the maximum allowed under the law for a single serious violation. While OSHA could have cited each plant for multiple instances of the same safety lapses, John L. Henshaw, who served as head of OSHA under President George W. Bush, said this practice was supposed to be reserved for employers who willfully failed to protect workers.

“Either the inspector or the area director or the solicitor’s office — somebody sort of looked at all the evidence and saw what maybe the company was trying to do and did, even though it wasn’t successful,” Mr. Henshaw said.

But Ann Rosenthal, who retired in 2018 as the Labor Department’s top OSHA lawyer after working under administrations of both parties, said the agency could have cited each facility for multiple violations — for different portions of the plant where there were hazards.

“They could well have said that hazards exist on the first floor, the second floor, etc., and could have gotten the penalty over $100,000,” Ms. Rosenthal said. “At least it would have looked like an effort to start to be serious.”

Other experts said the agency could fall further behind in protecting meatpacking workers in the coming months, pointing not just to rising infection rates nationally but to recent changes in the way OSHA regulates employers.

Dr. Michaels, the former OSHA head, cited the agency’s recent reinterpretation of an Obama-era rule that had required employers to report any hospitalization or amputation that resulted from a workplace incident.

Under the new interpretation, outlined last month, an employer is no longer required to report a Covid-related hospitalization within 24 hours of learning about it. Instead, the employer must report only hospitalizations that occur within 24 hours of the worker’s exposure to the virus on the job — timing that may be impossible to determine.

The spokeswoman for the Labor Department said that after initially considering the more expansive interpretation, it had concluded that only the narrower interpretation could be defended in court.

Dr. Michaels said that the regulation was critical for highlighting hot spots and problem areas, and that its weakening was deeply concerning.

“It’s a way to guarantee you have no reports,” he said of the change. “They’re telling employers: ‘Don’t worry. We’re not going to make you do anything.’”

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Unemployment Claims Rise Anew in Latest Sign of Economic Distress

The American economy is showing fresh signs of deceleration, hammered by layoffs, a surge in coronavirus cases and the lack of fresh aid from Washington.

The Labor Department reported Thursday that 886,000 people filed new claims for unemployment benefits last week, an increase of nearly 77,000 from the previous week. Adjusted for seasonal variations, the total was 898,000.

The rise follows the announcement of layoffs by major companies including Disney and United Airlines in recent weeks and an impasse between Republicans and Democrats over another round of aid for the economy. A recent jump in coronavirus infections, principally in the Midwest and Western states, only added to the grim outlook.

“It’s discouraging,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “The labor market appears to be stalled, which underscores the need for new stimulus as quickly as possible.”

The economy rebounded strongly in late spring and early summer as lockdowns eased in many parts of the country and employers brought back workers from furloughs. But those recalls have slowed, even as federal stimulus efforts have waned.

In past recessions, 800,000 new claims for state unemployment insurance in a week would have been extraordinary. But over the last 30 weeks, that figure has become a floor, not a ceiling.

The latest numbers “point to a lot of churn in the labor market, and it appears the rate of firings has picked up,” said Michael Gapen, chief U.S. economist at Barclays.

More layoffs are expected as sectors like leisure and hospitality struggle. In some states, restaurants have been able to salvage some business by serving diners outside, but that option will disappear in many areas as winter approaches.

“The course of the virus determines the course of the economy,” said Diane Swonk, chief economist at the accounting firm Grant Thornton. “You can’t fully reopen with the contagion so high.”

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Credit…John Bazemore/Associated Press

A federal program set to expire at the end of the year, Pandemic Emergency Unemployment Compensation, is seeing a surge in new applications. It provides 13 weeks of extended benefits after the end of regular state payments, which typically last 26 weeks.

In the week that ended Sept. 26, the most recent period with available data, nearly 2.8 million people were getting the extended benefits, a jump from fewer than two million the previous week. That increase was roughly equal to the decline in the number collecting state benefits.

But receiving those benefits, which are administered by the states, isn’t so easy, experts say. “The transition from regular state benefits to P.E.U.C. is not going smoothly,” said Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, a left-leaning research group.

In some places, recipients of state unemployment benefits haven’t been notified of their eligibility for the federal extension, and aging computer systems have slowed the processing of applications.

If the program is not extended by Congress, “we’re going to see a disaster,” Ms. Shierholz said. “There will be a huge drop in living standards and an increase in poverty as well as downward pressure on economic growth.”

For workers facing the end of regular benefits, the extended payments have proven to be a lifeline.

Jared Gaxiola of Torrance, Calif., was laid off from his job as a freelance lighting technician in March, after live events were canceled across the country. When his state benefits ran out in mid-September, he was able to get a 13-week extension through Pandemic Emergency Unemployment Compensation.

Mr. Gaxiola, 35, hopes to find a job by the time the federal payments run out in December. But with entertainment work still scarce, he worries about how he will pay his rent in the new year.

“I could probably borrow money from my sister if I needed to,” Mr. Gaxiola said. “But I really don’t want to have to do that.”

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Credit…Jose A. Alvarado Jr. for The New York Times

Some workers who are caught between an unforgiving job market and uncertain prospects for help from the government have taken matters into their own hands.

For three years, Lea Polizzi worked more than 50 hours a week as a nanny and a freelance photographer in New York City. But in March, when the pandemic hit, the family she worked for on the Upper East Side left the city, and all of her photography gigs dried up.

Ms. Polizzi, 24, filed for unemployment benefits and started receiving about $200 a week from the state, as well as a $600 federal supplement. Those payments enabled her to meet expenses — including the $1,100 rent for her apartment in the Bushwick neighborhood of Brooklyn — while she looked for a job.

But the $600 payments expired at the end of July. Since then, Ms. Polizzi has used about 75 percent of her savings — roughly $4,000 — to pay bills.

“That was the money I had saved to use for vacations or emergency funds,” she said. “I was going to buy a new camera. And then as soon as everything started going down, I had to put everything on hold, because I knew that I was going to end up having to pay rent with it eventually.”

Ms. Polizzi recently received $900 from Lost Wages Assistance, a short-term supplement from the federal government, and she expects one more payment from the program in the next few weeks.

In the meantime, she is making masks, lingerie, hats and jewelry and selling the items online at $25 to $200 apiece.

She has made about 60 sales. “Hopefully, I’ll be able to make it work and just pay all my bills through my art ventures,” she said.

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Despite the challenging picture over all, a few workers have been able to find better-paying positions, securing shelter in the coronavirus storm.

Before the pandemic struck, Chloe Ezi was a lifeguard at a public aquatic center in Powder Springs, Ga. It was part-time work that paid $11 an hour, but she was able to bring in an extra $300 a week by teaching private swim lessons.

In March, Ms. Ezi was sent home during coronavirus lockdowns. Because she continued to be paid half her wages — about $75 a week — the pool operators told her that she was not eligible to file for unemployment benefits.

Ms. Ezi, 19, was called back to work in May, but because virus restrictions kept her from teaching private swim lessons, she was able to bring in only about $150 a week — barely enough to cover her $280 monthly car insurance bill, her $80 cellphone bill, and $100 monthly payments to Penn Foster College, where she is completing a dental assistant certificate program, plus groceries and other necessities.

“That’s not a lot to live off of,” Ms. Ezi said. “I was zeroing out my paycheck every month.”

To save money, Ms. Ezi lived with her boyfriend in his parents’ house.

“We’re all just a big family living in this house together,” she said. “It can get pretty stressful living with so many people like this.”

Tired of living in such close quarters, Ms. Ezi began looking for a job that would pay more. In August, she found a full-time position as a sales representative at a store that sells birding equipment, where she makes $13 an hour plus tips. She remains on the staff at the pool, where she still picks up an occasional shift.

Now she and her boyfriend can afford to rent a one-bedroom apartment in Smyrna, Ga. They moved in on Wednesday.

“My new job allowed us to finally get our own place,” she said. “I’m feeling pretty proud of myself right now.”

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U.S. Unemployment Claims Remained Elevated Last Week

Applications for jobless benefits remained high last week, even as the collapse of stimulus talks in Washington raised fears of a new wave of layoffs.

Unemployment filings have fallen swiftly from their peak of more than six million last spring. But that progress has recently stalled at a level far higher than the worst weeks of past recessions. That pattern continued last week, the Labor Department said Thursday: More than 800,000 Americans filed new applications for state benefits, before adjusting for seasonal variations, roughly in line with where the total has been since early August.

“The level of claims is still staggeringly high,” said Daniel Zhao, senior economist at the career site Glassdoor. “We’re seeing evidence that the recovery is slowing down, whether it’s in slowing payroll gains or in the sluggish improvement in jobless claims.”

That slowdown comes as trillions of dollars in government aid to households and businesses has dried up. Prospects for a new stimulus package, already dubious in a divided Washington, appeared to fall apart this week when President Trump said he was pulling out of negotiations. Economists across the ideological spectrum warn that the loss of federal help will lead to more layoffs and business failures, and more pain for families.

The continued high level of jobless claims, combined with large monthly job gains, highlights the remarkable level of churn still roiling the U.S. labor market. Companies are continuing to rehire workers as they reopen, even as other companies cut jobs in response to still-depressed demand for goods and services. The result is a job market that is being pulled in two directions at once — and economic data that can appear to tell contradictory stories.

Adding to the challenge for analysts and forecasters, the pandemic has thrown the data itself into disarray. For the second week in a row, the jobless claims data carried a Golden-State-size asterisk: California last month announced that it would temporarily stop accepting new unemployment applications while it addressed a huge processing backlog and installed procedures to weed out fraud.

In the absence of up-to-date data, the Labor Department is assuming California’s claim number was unchanged from its pre-shutdown figure of more than 225,000 applications, or more than a quarter of the national total. The state began accepting new filings this week, and is expected to resume reporting data in time for next week’s report.

While the lack of data from California makes week-to-week comparisons difficult, the bigger picture is clear: The economic recovery is losing momentum, even as millions of Americans remain out of work.

Monthly jobs data released last week showed that job growth slowed sharply in September, and that last spring’s temporary furloughs are increasingly turning into permanent job losses. Major corporations like Disney and Allstate have announced thousands of new job cuts. And with winter approaching, restaurants and other businesses that were able to shift operations outdoors during warmer weather could be forced to pull back anew.

Separate data from the Census Bureau on Wednesday showed that 8.3 million Americans reported being behind on rent in mid-September, and 3.8 million reported that they were likely to be evicted in the next two months. Both figures have changed little since August.

“It seems increasingly unlikely that we’ll have a deal before the election, and bills are due now,” Mr. Zhao said. “Every week that passes puts extra pressure on workers’ households and small businesses, so any delay in the stimulus is going to have a meaningful impact on Americans.”

The situation is particularly dire for people who lost their jobs early in the pandemic, many of whom are now nearing the end of their unemployment benefits.

Last week was the 29th week since mass layoffs began in March. In most states, regular unemployment benefits last just 26 weeks, meaning that many people have already exhausted their benefits.

In March, Congress created a program funded by the federal government for people whose state benefits have expired. The number of recipients under that program, Pandemic Emergency Unemployment Compensation, swelled to nearly two million in mid-September, up from 1.4 million a month earlier.

The program adds only 13 weeks of additional benefits, however, so people who lost their jobs in March will receive those benefits only until mid-December. And the entire program will expire at the end of the year if Congress doesn’t extend it.

A separate program, which existed before the pandemic, offers an additional 13 to 20 weeks of benefits, depending on the state. But the benefits are based on state economic conditions, and the rapid decline in the unemployment rate means that workers in several states, including Idaho, Wyoming and Utah, would no longer qualify for it. Missouri will join their ranks next week.

Another emergency program, Pandemic Unemployment Assistance, also expires at the end of the year. That program covers freelancers, self-employed workers, part-timers and others who don’t qualify for benefits under the regular unemployment system. More than 460,000 people filed new applications under the program last week, and millions are receiving benefits in total.

The net result is that potentially millions of workers could see their benefits expire this winter. Epidemiologists warn that cases of the coronavirus are likely to rise as temperatures drop, and winter weather could reduce job opportunities.

“People are going to have their backs against the wall, and it’s pretty much the worst time of the year for the program to end,” said AnnElizabeth Konkel, an economist at the employment site Indeed.

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Jobs Report Shows Further Slowdown in U.S. Economic Recovery

Six months after the coronavirus pandemic tore a hole in the U.S. economy, the once-promising recovery is stalling, leaving millions out of work, and threatening to push millions more — particularly women — out of the labor force entirely.

The latest evidence came Friday, when the Labor Department reported that employers added 661,000 jobs in September, far fewer than forecasters expected.

It was the third straight month of slowing job growth, a worrying trend given the scale of the challenge ahead. The economy has nearly 11 million fewer jobs than it did before the pandemic, a bigger loss than the 8.7 million at the depth of the recession a decade ago.

Economists said the report underscored the need for more federal help. “It’s disturbing that we’re seeing such a dramatic slowdown in employment gains as we head into the fall,” said Diane Swonk, chief economist for the accounting firm Grant Thornton. “This is a red flag. We need aid now.”

The September slowdown was partly a result of public-sector job losses, particularly in school districts, where payrolls fell by more than 200,000. Economists said some of those jobs would come back if more schools opened for in-person instruction. But further cuts could be looming as state and local governments reel from a collapse in tax revenues.

The unemployment rate fell to 7.9 percent, down from a record high of nearly 15 percent in April. But even that good news carried a caveat: Nearly 700,000 people left the labor force, meaning they no longer counted as unemployed. And a rising share of the unemployed report that their job losses are permanent, rather than furloughs.


Unemployment rate



By Ella Koeze·Unemployment rates are seasonally adjusted.·Source: Bureau of Labor Statistics

The report was the last set of monthly jobs numbers — and one of the last major pieces of economic data — before the presidential election on Nov. 3.

Trump administration officials put a positive spin on the report. Larry Kudlow, the director of the National Economic Council, said on the Fox Business Network that analysts were misreading the numbers. “I think they are better than some people think,” he said. “The overall economy is looking good.”

It isn’t clear how much the economic data will matter to an election race upended by the news that President Trump tested positive for the coronavirus. But economists said recent data carried a clear message: Without a “Phase 4” spending package in Congress, the slowdown will only get worse.

“Everything depends on Phase 4 and whether we get that or not,” said Aneta Markowska, chief economist for the investment bank Jefferies. “There’s no middle ground.”

Prospects for a deal improved this week after seeming all but dead in September. House Speaker Nancy Pelosi on Friday floated the possibility that Mr. Trump’s coronavirus diagnosis could make an agreement more likely.

“This kind of changes the dynamic, because here they see the reality of what we have been saying all along: This is a vicious virus,” Ms. Pelosi said on MSNBC.

For small businesses in the industries hit hardest by the pandemic, the lack of federal assistance is an existential threat — and time is running out.

When the pandemic shut down movie theaters last spring, Cleveland Cinemas was able to stay afloat in part thanks to a loan under the Paycheck Protection Program. But that money is long gone. So are the cash savings that the company, which operated five theaters in the Cleveland area, had set aside to pay for new seating to help compete with big multiplexes.

Jon Forman, who has owned Cleveland Cinemas since 1977, isn’t sure what to do next. He has reopened only two of his theaters, and neither is attracting enough patrons to break even, even with fewer than 10 employees, down from 85 before the pandemic.

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Credit…Da’Shaunae Marisa for The New York Times
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Credit…Da’Shaunae Marisa for The New York Times

Many Americans remain wary of sitting indoors with strangers for two or three hours. And studios, hesitant to distribute big-budget movies when few people will pay to see them, have been delaying major releases until 2021.

Big chains may have the resources to wait for better days, but Mr. Forman isn’t sure he does. He has closed one theater permanently. Two others have been dark since March, and he is thinking about shutting the two reopened ones until demand picks up.

“We’re on a slope going down,” he said. “Without some sort of support, businesses are not going to survive.”

Stories like Mr. Forman’s reflect the mounting risks that as the crisis drags on, it will do lasting damage to the economy.

When unemployment spiked in March and April, most of the job losses were temporary layoffs or furloughs. But that is beginning to change. The number of people reporting they had been permanently let go rose to 3.8 million in September, nearly twice as many as at the height of the pandemic in April.


Job losses are more likely to be permanent than earlier in the pandemic

Share of jobs lost each month that are temporary layoffs



By Ella Koeze·Data is seasonally adjusted.·Source: Bureau of Labor Statistics

“The temporary layoffs in the beginning are turning more and more into permanent layoffs now as companies begin to see what their near future looks like,” said Erica Groshen, a Cornell University economist and the former head of the Bureau of Labor Statistics.

Prospects are particularly grim for those who lost their jobs in the first weeks of the crisis. More than 2.4 million people have been out of work for 27 weeks or more, the formal — if somewhat arbitrary — threshold for long-term joblessness. An even bigger wave is on the way: Nearly five million people have been out of work for 15 to 26 weeks.

Research has found that people who are out of work for six months or more have a harder time getting jobs even when the economy improves, and many end up leaving the work force. That can leave lasting scars on both workers and the broader economy.

Connie Sarmiento used to work three jobs to support her family as a single mother. She lost all of them in a matter of weeks: The Grand Hyatt in San Francisco, where she worked as a telephone operator, laid her off in March. The following month, she lost her jobs working at Oracle Park, the Giants’ baseball stadium, and Chase Center, home of the N.B.A.’s Golden State Warriors.

Initially, Ms. Sarmiento was able to make ends meet thanks to the $600 a week that the federal government added onto her $450-a-week unemployment payment from the state. But the supplemental benefits expired at the end of July, and she is falling behind on her bills.

Ms. Sarmiento’s $3,000 monthly rent was due Thursday, but she has only half the money she needs to pay it. “I have to tell my landlord that I am unable to pay,” she said. “I’m afraid he’s going to tell me I have to move out. That’s really scary.”

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Credit…Brandon Ruffin for The New York Times

Ms. Sarmiento hopes to return to work at the Hyatt this fall and at Oracle Park next season. But she worries about her prospects if those jobs don’t return.

“I feel hopeless,” she said. “Some of the only jobs I can find are in warehouses. I’m 60 years old and I don’t know if I can lift big, heavy stuff anymore. My body is getting weak.”

The September data carried particularly grim news about the pandemic’s impact on women. Initial job losses were concentrated among employers with heavily female work forces, like the hospitality and retail industries. While employment in those businesses has begun to bounce back, many women have been unable to return to work because they are disproportionately shouldering the burden of having children home from school.


Unemployment for women is worse than men’s across most demographics

Unemployment rates by race for men, women and over all


Black
Hispanic
Asian
White


By Ella Koeze·Rates are seasonally adjusted except those for Asian men and women.·Source: Bureau of Labor Statistics

The number of women working fell by 143,000 in September, and the share of women working or actively looking for work — a measure known as the labor force participation rate — dropped to 55.6 percent from 56.1 percent. Apart from April and May 2020, that is the lowest reading for women’s labor force participation since 1987.

Economists worry that the unexpected pause in their careers could prove to be a long-term setback for many women.

“We know that women leaving the work force to care for children for a while has lasting effects on their earnings, their seniority and their climb up the ladder,” said Julia Pollak, a labor economist with the career site ZipRecruiter. “Career interruptions have a huge effect.”

When schools and child care centers closed in March, Darsheen Sargent began bringing her 11-year-old daughter with her to her job as a home health aide in the Seattle area. During the day, she juggled two jobs at the same time — caring for her client, and running into the other room to help her daughter adjust to online schooling.

But Ms. Sargent, 48, grew increasingly concerned about the risk she posed to herself, her daughter, and her client by continuing to go to work each day. And she found balancing work and child care too much to handle. In mid-April, she decided to take a leave of absence from her job.

But the relief she felt at being able to focus purely on her daughter’s needs was quickly replaced by anxiety over keeping up with her bills now that she was no longer working. She has had to borrow money from friends to pay her rent, utilities and car payment.

As soon as schools and child care centers reopen, she plans to return to work. But she has no idea how long that will take.

“As a single parent, I’m the sole provider for my daughter, and I’m just doing the best I can to manage,” she said.

Jeanna Smialek, Alan Rappeport and Emily Cochrane contributed reporting.

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Unemployment Claims Fraud Exploits Weak Spots in System

The for-sale ad appeared last week in an underground internet bazaar that specializes in selling stolen accounts and data. It was for access to a filched unemployment insurance claim in California that had been approved and offered benefits worth $17,550.

The black-market sale of jobless benefits is just one sign that the unemployment insurance system — the main artery for delivering financial assistance to laid-off workers — has been besieged during the coronavirus crisis by criminal networks intent on bilking the government out of hundreds of millions of dollars.

In California, fraud was so pervasive that officials have suspended processing jobless claims for two weeks to put new controls in place and reduce a bulging backlog.

The U.S. Labor Department recently made fraud detection a priority, dedicating $100 million to combat the problem. But several state officials and cybersecurity experts say some of the efforts have been misdirected, designed to uncover workers misrepresenting their eligibility instead of large-scale identity theft.

“The focus continues to be on lying instead of stealing,” said Suzi LeVine, the commissioner of the Employment Security Department in Washington, one of the first states to be flooded with fraudulent claims.

Social service agencies have historically been preoccupied with preventing potential beneficiaries from cheating the government — individuals who lie about seeking a job or the date of their return to work.

“Anti-fraud systems are organized around that,” Ms. LeVine said. “Saying I was looking for a job when I was actually on a beach in Cabo.”

But most fraud is now being engineered by cybercriminals, some of them working together, who have stolen or bought other people’s identities and are using them to raid state unemployment systems.

Since March, Washington State has turned up nearly 87,000 impostor cases. From January 2018 to June 2019, there were 184.

Traditional fraud-prevention strategies, Ms. LeVine said, “will not help us catch these thieves.”

Think of it as the difference between an attack within and one coming from the outside. Previously the cheating came mostly from workers who were in the system and trying to get something they were not entitled to. Now “it’s people outside of the system who are impersonating other people or breaking in,” explained Roman Sannikov, director of cybercrime and underground intelligence at the cybersecurity firm Recorded Future.

Using stolen identities to steal from the government, of course, is not new. Such thefts have bedeviled programs from school loans to Medicare and disaster relief. But unemployment insurance has generally not been a ripe target because states have been reducing benefits and tightening access since the last recession and caseloads have been falling.

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Credit…Recorded Future

That changed after Congress moved in March to deliver assistance to suddenly jobless workers when the coronavirus outbreak upended the economy.

“Criminals go where the money is,” said Avivah Litan, an analyst at the research and consulting firm Gartner. After Congress passed the CARES Act, the emergency relief — including the Pandemic Unemployment Assistance program and a temporary $600 weekly supplement — was where the money was.

And that is where the bulk of the fraud has been aimed. Handled by the states, pandemic jobless benefits were meant to fill gaping holes in the safety net by covering self-employed, part-time and gig workers; independent contractors; and others ordinarily ineligible for unemployment insurance.

But the desire to quickly get money to households facing eviction, hunger or financial ruin made the program vulnerable to swindlers.

In Ms. Litan’s view, the federal government has not devoted sufficient resources to secure its systems against cybercrime and identity theft.

Some of the schemes, like those that hit Washington State in the spring, were linked by federal investigators to a Nigerian-based criminal ring called Scattered Canary. The ring used stolen Social Security numbers and other identity theft, and was suspected of operating in North Carolina, Massachusetts, Rhode Island, Oklahoma, Wyoming and Florida.

Washington State officials shut down the unemployment system for two days in mid-May as part of an effort to halt illegitimate payments that ended up totaling $576 million. The state has recovered $346 million so far.

Parker Crucq, a senior threat intelligence analyst at Recorded Future, said the number and types of perpetrators had grown, ranging from organized networks and technological whizzes to bush-league hucksters.

“While many of these threats require knowledge of social engineering techniques, they likely do not require a degree of technical sophistication,” Mr. Crucq wrote in an assessment of unemployment insurance schemes. “This means that there is a low barrier to entry for potential scammers and criminals who are interested in getting involved with this form of fraud.”

In hacker forums and on the so-called dark web, where users can hide their identity and location, “some of these actors are specifically calling out state agencies by name, boasting that it’s quite easy to fill out applications on multiple occasions from information scraped from previous data breaches,” he said.

Over three weeks in September, the police in Beverly Hills, Calif., arrested 87 people from states as far away as Alaska and New York on charges related to unemployment insurance fraud. The accused were not working in tandem but followed a similar pattern, applying for benefits with Social Security numbers stolen from people who had died or were in prison or nursing homes, said Lt. Max Subin, a department spokesman.

Sometimes using false addresses and “mules” or intermediaries, they then picked up debit cards loaded with thousands of dollars’ worth of jobless benefits from the state’s Employment Development Department.

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Credit…Beverly Hills Police Department

Those involved used the cards — often several at a time — to embark on shopping sprees, buying high-end handbags, belts, wallets, shoes and clothing or renting luxury cars, the police said.

Identify theft is a particularly insidious form of unemployment insurance fraud, frequently pre-empting benefits for those entitled to them and undermining confidence in the program.

“The thing that is so maddening about impostor fraud is that it strikes at the core of how unemployment insurance systems operate,” said Scott Jensen, director of the Rhode Island Department of Labor and Training. “If fraudsters are giving us fake information, it’s hard to verify it.”

An inaccurate Social Security number, for instance, is spotted immediately. “But if a fake Scott Jensen comes in with the real Scott Jensen’s Social Security number, then it checks out,” he said. Most of the fraud is not discovered until people get letters or checks from the agency and call to say they never applied.

For years, “this has been a weakness that has been really hard to fix,” Mr. Jensen said. “What is different now is the scale.”

Fraud linked to identity theft made up about 3 percent of all unemployment claims last year, according to government audits. With the pandemic program, that figure has skyrocketed.

Last week, Arizona said it had flagged over one million of 2.4 million claims — more than 40 percent — as potentially fraudulent. Over the summer, Connecticut found that 77 percent of Pandemic Unemployment Assistance claims were faked.

With state unemployment claims, there is a built-in verification process because employees have to submit their W-2 tax form and a document from their employer showing that they are no longer employed. Pandemic Unemployment Assistance, by contrast, depends largely on individuals’ certifying that they are unemployed because of the coronavirus outbreak.

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Credit…Beverly Hills Police Department

Ms. LeVine in Washington State said that the U.S. Labor Department’s most recent directives focused more on data integrity, but that other efforts — like demanding that applicants certify their status each week — did little to catch the widespread fraud linked to identity theft.

“It’s better suited to catching people who might be lying or making sure they comply with eligibility requirements,” she said. “It will not help us fight impostor fraud.” For thieves, it’s just another box to check on an already fraudulent claim.

In response, a Labor Department representative said that “the department has been focused on ensuring program integrity” and that it provided a wide range of information, tools and resources as well as extensive technical assistance to prevent fraud and improper payments.

State and federal officials are caught between getting money as quickly and efficiently as possible to people who desperately need it and erecting roadblocks to cut off criminals from improperly collecting benefits.

“There are a lot of fraud tools,” like multifactor identification, said Mr. Jensen, Rhode Island’s labor chief, “but if you front-load the unemployment insurance system with them, then claimants can’t get through.”

Mr. Jensen contends that significant improvements and more sophisticated detection tools — including questions to verify a user’s identity, like the model of a first car — could be put in place quickly and inexpensively if unemployment insurance systems, antiquated in many states, switched to cloud-based computing.

“People are always going to try to steal money,” he said. “We have to work harder and faster and smarter to defeat them.”

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Unemployment Claims Dip, but Layoffs Remain a Worry

The number of Americans filing for unemployment benefits fell last week, but employers continue to lay off workers at an extraordinarily high pace that exceeds the worst levels of past recessions.

Initial claims for state benefits totaled 790,000 before adjustments for seasonal factors, the Labor Department reported Thursday. The tally, down from 866,000 the previous week, is roughly four times what it was before the coronavirus pandemic shut down many businesses in March.

The latest data suggests that jobless claims have flattened since the big gains in hiring recorded last spring as the economy bounced back, economists said. And layoffs continue — on Wednesday, for example, Raytheon said it would eliminate 15,000 commercial aerospace and corporate jobs.

“I’m concerned about a plateau,” said Gregory Daco, chief U.S. economist at Oxford Economics. “It suggests we are entering the second phase of the recovery, one that is slower and more susceptible to downside risk.”

Other economic data has been mixed. The Commerce Department reported Wednesday that retail sales rose 0.6 percent in August, compared with a 0.9 percent gain in July, as consumers grew more cautious.

And in a sign of how guarded the long-term economic view remains, the Federal Reserve indicated that it would keep interest rates near zero at least through 2023.

“The labor market continues to heal from the viral recession, but unemployment remains extremely elevated and will remain a problem for at least a couple of years,” said Gus Faucher, chief economist at PNC Financial Services.

Initial weekly state unemployment claims

By Ella Koeze·Not seasonally adjusted. Does not include claims made under the Pandemic Unemployment Assistance program.·Source: Labor Department

New claims last week for Pandemic Unemployment Assistance, an emergency federal program for freelance workers, independent contractors and others not eligible for regular unemployment benefits, totaled 659,000, the Labor Department said.

Federal data suggests that the program now has more beneficiaries than regular unemployment insurance. But there is evidence that both overcounting and fraud may have contributed to a jump in claims.

The largest surge by far last week was in Arizona, where the Labor Department reported more than 165,000 initial claims under the program, an increase from 101,000 the week before. Both weeks, only California — which has also reported widespread fraud — had a higher tally.

“We are reviewing over one million P.U.A. claims for likely fraudulent activity,” Brett Bezio, deputy press secretary of the Arizona Department of Economic Security, said in an email. To give a sense of the scale of the attempted abuse, he pointed out that the state had received nearly 2.7 million jobless claims during the pandemic, which represents 80 percent of Arizona’s work force.

While Pandemic Unemployment Assistance has been hit with allegations of fraud, another new program, Lost Wages Assistance, has struggled to pay any money at all.

President Trump created it last month with federal disaster funds after Republicans and Democrats in Congress deadlocked on a relief bill. The payments of $300 per week — half the amount of a federal supplement that expired at the end of July — are retroactive to the week that ended Aug. 1. But officials said there was money for no more than six weeks, so states have been told that the coverage ended Sept. 5.

More than 30 states have begun paying benefits, but “it’s kind of a zombie program,” said Michele Evermore, senior researcher and policy analyst at the National Employment Law Project, a worker advocacy group.

“Every state seems to be doing it differently,” she added, with some paying a lump sum of $1,800 to cover six weeks after getting off to a late start.

As with the earlier supplement, overwhelmed computer systems have added to delays. Colorado was set to begin making payments this week, but its certification process briefly froze because of demand, news reports said.

As programs like Pandemic Unemployment Assistance and Lost Wages Assistance expire or run out of funds, job searches might be expected to increase. But they haven’t — a sign some unemployed workers are giving up on finding a new position for now.

“Job-seeker numbers are pretty flat,” said Julia Pollak, labor economist at ZipRecruiter, an online employment marketplace. “People still expect to get their old jobs back.”

Ms. Pollak said she was surprised because 36 percent of those surveyed in July by ZipRecruiter said they would spend more time searching for work if the $600 weekly supplement ended. Just over 40 percent said they would be willing to take a less appealing position.

Instead, people aren’t budging. “We see a level of stasis in the economy,” Ms. Pollak said. “The uncertainty causes people to sit and wait. The whole economy is in a bit of a freeze.”

In some cases, workers have dropped out of the labor market. Labor Department data showed that 125,000 women ages 25 to 54 left the work force in August.

“This is a situation where many people are choosing to delay re-entering the labor force or to withdraw,” Ms. Pollak said. “In some cases, it makes more sense for workers to wait for conditions to improve in their industry. It’s costly for people to switch.”

In the meantime, the delays and other logistical headaches in jobless programs are taking a toll on workers and their families.

Marcos Quintana, 29, was laid off in December from his job as a seasonal custodian at a school in Bakersfield, Calif. He expected to find new work quickly, but the pandemic hit, and many custodial jobs dried up.

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Credit…Horatio Baltz for The New York Times

He started receiving $200 a week in state unemployment benefits, as well as a $600 boost from the federal government. When the $600 program expired in late July and his state unemployment benefits ran out, he was left with $230 a week from Pandemic Emergency Unemployment Compensation, a federal program for those whose state benefits have expired.

Mr. Quintana lived with his girlfriend, who lost her job as a hairstylist in March when salons closed. She filed for unemployment benefits but never received them, so Mr. Quintana supported them, paying the $935 in rent and as much as $300 in utilities for their apartment. To avoid falling behind on his $357 car payment and $185 car insurance bill, he cut off cable television and borrowed from his father.

Then Mr. Quintana found that he was eligible for Lost Wages Assistance. He was certified to receive the payments on Sept. 15, but he’s not sure when they will arrive.

Regardless, the money will be too late to avoid upheaval in Mr. Quintana’s life. His relationship with his girlfriend soured as the financial stress mounted. And Mr. Quintana couldn’t afford their bills.

So last week the couple split up, and he moved in with his parents.

“I feel like a kid again,” he said. “Like I’ve taken two steps backward in life.”

Even though it has been unpredictable, Lost Wages Assistance has been helpful for some workers as they navigate an unforgiving economic climate.

Mary Costanzo was laid off as a bookkeeper at an accounting firm on March 27. She filed for unemployment benefits and started receiving $451 a week after taxes in Massachusetts benefits, plus the $600 federal supplement.

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Credit…Philip Keith for The New York Times

When the federal supplement ended, she didn’t have enough to cover September’s $2,262 mortgage payment on their four-bedroom house in Burlington, northwest of Boston. Her husband pulled $6,000 out of his 401(k) savings to make the mortgage payment and to have money on hand for October and November in case Ms. Costanzo hasn’t found work by then.

This month, she stopped receiving the state benefits, too. The unemployment office told her that she needed to refile her claim. She did so, but no benefits have materialized.

Lost Wages Assistance produced a lump sum of $1,200 this week. Ms. Costanzo doesn’t know if she will receive any more from the program. She does know that if she doesn’t get a job soon, she and her husband will keep draining their retirement savings.

After months of fruitless searching, Ms. Costanzo had her first job interview this week. If she gets the job, she will start on Monday.

She will be relieved if she is hired, but she will also be concerned, because the job requires working in an office. She had wanted a job she could do remotely, because she fears bringing the coronavirus home to her sons, 27 and 31, who have cystic fibrosis and are prone to lung infections.

“At this point, I don’t have a choice,” she said. “I need to work to pay the mortgage.”

Patricia Cohen contributed reporting.

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Why Unemployment Claims May Be Overcounted by Millions

Economic statistics were never designed to measure the sudden shutdown and restart of large segments of the U.S. economy. Still, if there is one question that the government seemingly should be able to answer, it is this: How many Americans are receiving unemployment benefits?

Since the start of the pandemic, however, federal data on the unemployment insurance system has been plagued by errors, double counting and other issues. And even after the initial flood of layoffs slowed, the problems have only grown in recent weeks, in part because of an apparent spike in fraudulent claims for benefits.

The biggest problems appear to involve Pandemic Unemployment Assistance, a program created by Congress in March to cover freelancers, self-employed workers and others who are left out of the regular unemployment system. Federal data implies that nearly 15 million Americans are now receiving benefits under the program, but some economists believe that overstates the true number by millions.

The scale of the overcounting issue varies by state. In Texas, figures for Pandemic Unemployment Assistance claims closely match the federal government’s. But in Montana, the state says just 9,000 people are receiving benefits under the program, versus the more than 60,000 reported by the federal government.

The biggest problems, at least in absolute numbers, are in California. The federal data suggests that nearly seven million Californians are receiving pandemic benefits. The state’s data shows that number is under two million.

The counting issues don’t change the broad contours of the crisis: By any measure, millions of Americans are relying on unemployment benefits to buy groceries and pay rent. But they do make it harder to answer basic questions about how quickly the economy is improving and how successful government programs have been at mitigating the damage.

“This does really underscore just how important it is that we make key investments in our data infrastructure, because now we know what it feels like when we don’t have good data,” said Heidi Shierholz, director of policy for the Economic Policy Institute.

The United States doesn’t have an unemployment insurance system. It has 53 systems, one for each state plus the District of Columbia, Puerto Rico and the Virgin Islands. Each operates independently, with its own rules and procedures, subject to policies set at the federal level.

State unemployment offices report data to the U.S. Labor Department, which compiles the numbers into a weekly report. One number in that report, known as “continuing claims,” counts filings of people who have previously filed for benefits and have remained unemployed since the previous week.

That figure is often treated by economists as an estimate of the number of people receiving unemployment benefits. But that isn’t actually what it measures, at least not directly. It counts applications, not all of which are approved. And rather than counting the number of individuals applying for benefits, it counts the total number of weeks of benefits they apply for.

That distinction doesn’t matter much in normal times, when most people apply for benefits on a weekly basis and are quickly approved. But because benefits are paid retroactively, if there are delays processing applications, people can end up applying for multiple weeks of benefits at once, skewing the continuing-claims number.

That seems to be a particular issue in California, according to a new analysis of state unemployment data by researchers at the California Policy Lab. Some of the recent flood of applications for Pandemic Unemployment Assistance there are from people saying they lost jobs in the early weeks of the pandemic, meaning they could be owed months’ worth of benefits, said Till von Wachter, an economist at the University of California, Los Angeles, who was an author of the Policy Lab analysis.

State officials say many backdated claims in that new flood may be fraudulent. But others may not be, Mr. von Wachter said. Someone in the film industry, for example, might not have applied for benefits right away last spring, on the assumption that business would bounce back relatively quickly. But now, with no reopening in sight, the worker might decide to file — and to claim, legitimately, to have been out of work since April.

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Credit…Brian van der Brug/Los Angeles Times, via Getty Images

Weekly unemployment filings were not intended to be an economic indicator. They aren’t collected by the Bureau of Labor Statistics, the Labor Department agency that produces the unemployment rate and related measures, and they aren’t subject to the quality controls applied to official statistics.

Instead, the data is collected by the states and reported to the Employment and Training Administration, a Labor Department agency charged with overseeing the states’ unemployment systems. Asked about the data discrepancies, the department said the numbers were intended primarily for administrative purposes, like allocating federal funding for state employment agencies.

Economists pay attention to unemployment filings because they’re often an early-warning system for trouble in the labor market. But once the alarm has been sounded, economists usually turn to more reliable monthly and quarterly data to get a more complete picture of what is going on.

The speed of the present crisis has put a premium on timely data. At the same time, state unemployment systems, many of which run on decades-old software, were overwhelmed by the flood of applications for traditional unemployment benefits, while carrying out a new program that covered a separate category of workers. That made it hard for them to report accurate data.

“It’s a fast number, but that doesn’t make it a good number,” said Eliza Forsythe, a University of Illinois economist who studies unemployment.

The standard unemployment system leaves out a lot of people: freelancers, self-employed workers and people with too little work history to qualify. (That can include some low-paid part-time and low-wage workers.) The Pandemic Unemployment Assistance program is meant to fill that gap.

By many measures, the program has been a success, helping millions of workers who would otherwise have had no source of income. But data on the program has been troubled from the start. Many states took weeks to get the program up and running, and when they did, many did not begin reporting data right away.

Once the data started coming in, it was often hard to interpret — some states would report thousands of recipients one week, then zero the next. Processing backlogs made it hard to separate recent job losses from layoffs that happened early in the pandemic.

“The claims that are coming in are borderline nonsensical sometimes,” said Kathryn Anne Edwards, an economist at RAND who studies the unemployment system.

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Credit…Nick Oxford/Reuters

The Labor Department says about 13 million people are receiving benefits under regular state unemployment programs. An additional 1.5 million or so are covered by various programs for people whose regular benefits have run out. Economists consider those figures generally reliable.

But few economists believe the federal government’s figures for the pandemic assistance program, which on paper is now larger than the regular state programs.

California’s data alone indicates the count of continuing claims could be overstated by about five million. Other states report their own discrepancies that, taken together, suggest the federal count could be inflated by a further two million or more, although too few states are reporting individual-level data to allow for a precise estimate.

Other sources, including surveys and federal spending data, likewise suggest that the number of people receiving benefits under the pandemic program is below 10 million, and perhaps as low as five million. That would mean the number of people receiving unemployment benefits of any kind right now is 20 million to 25 million, rather than the 30 million suggested by federal continuing-claims data.

The official unemployment insurance figures almost certainly overstate the number of people receiving benefits. But they might still underestimate the number of people whose livelihoods have been affected by the pandemic.

Some groups, like undocumented immigrants, are excluded from the unemployment system. Others have been improperly denied benefits, or have been unable to apply. Surveys and other evidence suggest a sharp increase in food insecurity during the pandemic, a sign that even the expanded benefit programs aren’t reaching everyone in need.

“It’s both an overcount and an undercount at the same time,” Ms. Forsythe said.

The good news is that there is little evidence that the recent increase in unemployment claims, particularly in the pandemic program, reflects a real-world increase in the rate of job losses. While layoffs are continuing, most public and private data sources show a gradual improvement in the labor market. But those same sources suggest that progress has slowed in recent weeks, and that the absolute level of joblessness remains high.

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Unemployment Benefits Program Has Issues With Fraud and Math

Two weeks ago, shortly after she advertised an apartment for rent in the Bay Area, Barbara Lamb found five envelopes from the state’s unemployment office in the building’s communal mail slot. They kept coming, day after day, until a stack of more than 30 piled up, bulging with notices of benefit approvals, questionnaires about job status — and debit cards with money.

“They could barely get them through the mail slot, they were so thick,” she said.

But Ms. Lamb had not applied for benefits, and had never heard of the people to whom the envelopes were sent. Fearing the address of the vacant unit was being used as part of a fraud scheme to collect the money, she contacted the F.B.I.

California is at the center of increasing concerns about extensive fraud in a federal program to push unemployment benefits to freelancers, part-timers and others lacking a safety net in the coronavirus pandemic.

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Credit…Jim Wilson/The New York Times

At the same time, there is growing evidence of problems keeping track of how many people are being paid through the program. The Labor Department reports about 15 million claims for benefits nationwide. A comparison of state and federal records by The New York Times suggests that total may overstate the number of recipients by five million or more.

If the number of people getting unemployment benefits is lower than officially reported, it could affect thinking about the scale of the pandemic’s economic impact. In addition, the taint of fraud could undermine support for the program, and efforts to combat abuses may make it harder for legitimate applicants to collect benefits, which are distributed by the states.

The program, Pandemic Unemployment Assistance, is part of a $2.2 trillion relief package hurriedly enacted in March. In the latest Labor Department tally, the program accounted for nearly half the total recipients collecting jobless benefits of any kind.

Those figures imply that nearly seven million people are collecting Pandemic Unemployment Assistance benefits in California alone, far more than its population would suggest. The state’s own data suggests the number may be less than two million. Experts on the unemployment system say such discrepancies seem to reflect multiple counting as states rushed out payments.

But a surge in new claims in California — where they have risen to more than 400,000 a week, twice the level in August — is attributed not to accounting, but to fraud.

“We do suspect that a big part of the unusual recent rise in P.U.A. claims is linked to fraud,” said Loree Levy, a spokeswoman for the California Employment Development Department. She said the state was investigating “unscrupulous attacks” exploiting identity theft and vulnerabilities in the system.

Pandemic Unemployment Assistance is meant to provide benefits to the self-employed, independent contractors, gig workers, part-timers and others ordinarily ineligible for state unemployment insurance. Set up to last through the end of the year, it was a major element of the CARES Act, which economists widely agree has kept the country from a far greater economic calamity. According to the Labor Department, $47 billion in pandemic unemployment benefits have been paid so far.

Fraud is not uncommon in hastily assembled disaster programs, including the Paycheck Protection Program, the component of the CARES Act that provided forgivable loans to small businesses to help weather the pandemic without layoffs.

But signs of trouble with the Pandemic Unemployment Assistance program have surfaced for months as people who did not file claims — including the governor of Arkansas — found benefits issued in their names. A growing number of states have signaled that the problems with the program go beyond the routine.

California has warned that it is cutting off recipients when it detects irregularities, like mailings stacking up at a given address. “These situations are believed to be fraud, and scammers will often try to intercept, redirect, or gather mail associated with these claims,” the state’s employment agency wrote.

Colorado said Thursday that in a six-week stretch this summer, 77 percent of new claims under the program were not legitimate.

“Nationally, it’s just presented an opportunity for criminals to take advantage of a program that doesn’t have a lot of safety measures in place,” said Cher Haavind, deputy executive director of the Colorado Department of Labor.

Citing a significant increase in fraud, the Labor Department set aside $100 million recently to help states prevent, detect and investigate misuse of Pandemic Unemployment Assistance and a smaller federal jobless benefits program. But fraud is not the only issue raising questions about the surge in recipients reflected in official data.

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Credit…Bryan Woolston/Reuters

Experts on the unemployment system figured out months ago that the tallies being reported to the Labor Department were overstated in many states, most likely because of processing backlogs that led to multiple counting of individual recipients. They expected the issue to fade as backlogs cleared and job losses slowed. Instead, the overcounting issue may even have become more serious in some states.

“It’s a perfect storm,” said Stephen A. Wandner, a former top Labor Department official who is now a senior fellow at the National Academy of Social Insurance. “You’ve got insane numbers of applications compared to what the states are used to and inadequate numbers of staff to process and adjudicate claims.”

Determining the scale of the problem on a national level has proved difficult, however. Overwhelmed state employment offices have struggled to provide timely data to the federal government, and there have been several examples of outright errors making their way into the official data.

At least some of the overcounting appears to reflect the way the Labor Department collects statistics on unemployment benefits. The government does not track the number of individual people receiving benefits, but rather the total number of weeks of benefits claimed. During normal times, when claims are processed on a weekly basis, the number of recipients and the number of weeks are essentially the same — each person files for one week of benefits each week. (Further complicating matters, the department tracks claims for benefits, not all of which are approved.)

During the pandemic, however, the flood of claims overwhelmed state employment offices. Because benefits are paid retroactively, processing delays meant that by the time many people were approved for benefits, they were owed several weeks at once — so they counted as multiple “continuing claims” in a single week.

In the absence of a reliable count from the Labor Department, economists have tried to estimate the number of recipients using data from surveys, federal spending data from the Treasury Department and other sources. Those approaches yield a wide range of estimates, but most suggest that the official total overstates the true number of recipients by millions.

“It’s almost certainly lower than is being reported,” said Daniel Zhao, senior economist for the career site Glassdoor. He said it was hard to come up with a precise estimate, but that the true number was most likely below 10 million, not the nearly 15 million counted by the Labor Department.

The Labor Department did not immediately respond Friday to a query about the reporting discrepancies.

Mr. Zhao said that the counting issues did not fundamentally alter the bigger picture: Millions of Americans are still relying on unemployment benefits to pay rent and buy food, and that number has fallen only slowly over time.

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Credit…Jonathan Ernst/Reuters

Pandemic Unemployment Assistance aims to capture those lacking a path into traditional state benefits and accounts for the pandemic’s particular disruptions. A college student could qualify if she interviewed for a job in February and was set to start working in March but never did. So could people with limited earnings histories, and some of those unable to work because of child-care needs arising from school shutdowns.

The minimum payment is usually half the average weekly benefit paid under a state’s regular unemployment program. The maximum for an individual ranges from $235 a week in Mississippi to $823 in Massachusetts, according to the job site ZipRecruiter.

And the claims process is streamlined compared with conventional unemployment insurance, making it more vulnerable to fraud, said Michele Evermore, senior researcher and policy analyst at the National Employment Law Project.

Before collecting state unemployment insurance, applicants usually must provide proof of past work or have state agencies contact employers. With Pandemic Unemployment Assistance, many people can start collecting the minimum with far less documentation. Then they generally have 21 days to provide evidence of lost work, like a pay stub or a 1099 form from the Internal Revenue Service.

In an emergency program like Pandemic Unemployment Assistance, Ms. Evermore said, there is a natural tension between the need to get payments flowing and the risk that some people will take advantage and fraudulently apply for benefits.

“There is a choice between denying benefits or accidentally overpaying people,” she said. “With Pandemic Unemployment Assistance, scammers may be getting money that is meant for the unemployed.”

Erica Quealy, communications director of the Michigan Department of Labor and Economic Opportunity, said the program had become the prey of “large fraud rings.” Michigan’s attorney general has conducted hundreds of investigations, and the state has appointed a special fraud adviser and brought in the consulting firm Deloitte to help.

Some schemes involve using false Social Security cards and fake driver’s licenses to apply. One man was charged with filing applications in Pennsylvania under false names, and then having benefits worth $150,000 in debit cards mailed to addresses in Michigan, according to the state attorney general. Prosecutors said he used the money to buy a $45,000 Rolex watch.

The rate of fraudulent claims in Colorado has been striking. After adding more screening measures to catch fraud, Colorado found that more than three out of four claims filed over a six-week period for jobless benefits under the federal Pandemic Unemployment Assistance program were bogus.

On Thursday, the state said it had reduced its count of new claims filed from July 12 to Aug. 22 by 48,000 because of new fraud-detection efforts. Before being discovered, though, those responsible for the fraud were able to collect $40 million during that period, said Jeff Fitzgerald, head of the state’s unemployment insurance program.

Officials estimated that the state’s screening tools had saved the federal government $750 million to $1 billion over eight weeks by halting wrongful payments or by flagging them before they were made.

“What we’re looking at is quite sophisticated,” Mr. Fitzgerald said. “It is something that a common individual would not be able to do, and really it points to orchestrated, very sophisticated, large fraud schemes. These aren’t onesies and twosies.”

The fraud detection efforts are putting an enormous burden on the states. Mr. Fitzgerald said that Colorado had assigned 60 people to investigate unemployment fraud, compared with five in normal times.

In the meantime, the mail keeps coming. Ms. Lamb, whose East Bay rental unit had been inundated with envelopes, rubber-banded them into neat stacks Thursday to send back to the state unemployment office. She had given the five addressees’ names to the F.B.I.

On Friday, two more envelopes arrived from the state, bearing a new name.

Tara Siegel Bernard contributed reporting, and Sheelagh McNeill contributed research.

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Unemployment Claims Send Another Worrisome Note

Despite some signs of economic revival, the outlook for American workers remains treacherous, with layoffs continuing to claim hundreds of thousands of jobs a week.

The weekly figures on unemployment claims from the Labor Department on Thursday showed no relief, reflecting what Michael Gapen, chief U.S. economist at Barclays, said was “a transition to a slower pace of recovery, and one that will be more uneven.”

The department reported that more than 857,000 workers filed new claims for state unemployment insurance last week, before seasonal adjustments, a slight increase from the previous week. On a seasonally adjusted basis, the total was 884,000, unchanged from the revised figure for the previous week.

In addition, about 839,000 new claims were tallied under a federal program called Pandemic Unemployment Assistance, which provides assistance to freelancers, part-time workers and others who do not ordinarily qualify for state benefits. That figure, which is not seasonally adjusted, was up from 748,000 the previous week.

“It’s a gut punch to see these numbers every Thursday with no improvement,” said Diane Swonk, chief economist at the accounting firm Grant Thornton in Chicago. “The numbers are going in the wrong direction.”

Although weekly unemployment insurance filings are down from the peak of more than 6.5 million in early spring, they remain frustratingly high. Before the pandemic, new weekly claims were typically a little over 200,000. Many economists had expected them to fall much further by now.

Initial weekly unemployment claims, both regular claims and those under the Pandemic Unemployment Assistance program

By Ella Koeze·Pandemic Unemployment Assistance extends eligibility to some workers who would not otherwise be able to apply for unemployment benefits, such as part-time and self-employed workers. Neither regular claims nor P.U.A. claims are seasonally adjusted.·Source: Labor Department

There have been some hopeful signs. The unemployment rate in August fell to 8.4 percent. Many states are moving forward with reopening businesses. Home sales are strong.

A wild card is the congressional standoff over another coronavirus relief package. House Democrats have passed a $3 trillion bill that would restore a $600 weekly unemployment benefit supplement that expired in July. A much smaller Republican package reviving the supplement at $300 a week failed to advance in a Senate vote on Thursday.

President Trump ordered a stopgap $300-a-week replacement last month through the Federal Emergency Management Agency, but it has been slow to get off the ground and has funds for only a few weeks.

Eighteen states have begun making the payments, said Michele Evermore, senior researcher and policy analyst at the National Employment Law Project. “It would have been so much easier and faster if Congress would have passed an extension,” she said.

At the same time, the Pandemic Unemployment Assistance program is drawing millions of recipients — and allegations that some are abusing it.

A California official said the state suspected that much of the recent increase in claims under the program was a result of fraud, and was investigating “unscrupulous attacks” that have taken advantage of identity theft and other vulnerabilities in the system.

The program, created as part of pandemic relief efforts enacted in March, is intended to help gig workers, part-timers, independent contractors and the self-employed. In the week that ended Aug. 22, 14.6 million people were collecting benefits under the program, and nearly half were in California, the Labor Department said.

A spokeswoman for the California Employment Development Department, Loree Levy, said the state was “aggressively fighting” fraud in the program. “We do suspect that a big part of the unusual recent rise in P.U.A. claims is linked to fraud,” she said.

Ms. Levy said the state was suspending or closing claims that match suspicious patterns and was working with local and federal authorities to expose and prosecute offenders.

“Perpetrators are often using stolen identity information from national and global data breaches, as well as exploiting expedited payment efforts,” she said.

In August, 21 current and former inmates of the main San Mateo County jail in California were charged with fraud after they successfully applied for benefits under the program while in custody. The bogus claims yielded more than $250,000 in payments.

Whatever the problems with fraud, the program provides a lifeline to many individual workers with legitimate claims.

Pedro Night, a D.J. in the Washington area, saw his livelihood fade as events and other gatherings were halted. “By April, it hit me, and I realized that we were definitely in this for the long haul,” he said.

He applied for Pandemic Unemployment Assistance, and in June he started receiving $350 each week in benefits after taxes, in addition to a $600 federal supplement.

Although the supplement ended in late July, the basic payments have continued, giving him just enough for his share of the $750 monthly rent for an apartment in Rockville, Md., his $400 car payment and his $120 car insurance bill.

Even as Congress debates extending supplemental aid to the unemployed, some find themselves struggling to do without.

Robert Rooney was furloughed as an engineer at the Bellagio Hotel in Las Vegas on March 15, and then permanently laid off on Aug. 31. After the $600 supplement ran out, Mr. Rooney was left with $423 a week in Nevada unemployment benefits after taxes.

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Credit…Bridget Bennett for The New York Times

Mr. Rooney’s wife, Jennifer, is still working, but they believe they will be unable to pay the $1,200 rent for their two-bedroom house by the end of the year. They are considering selling one of their cars and have given up on buying a home, something they expected to do this fall.

They are using credit cards to pay for groceries, gas and the roughly $300 per month in medical costs for Mr. Rooney’s mother, who has a lung ailment. They are dipping into their small pot of savings for the minimum payments on their credit card bills.

Ms. Rooney hung on to the entry-level job she got last year doing data entry at a local nonprofit organization. Her wages, $12 per hour, are close to what she made 10 years ago, before earning her bachelor’s degree. She hoped to work her way up as she changed industries from her prior work in health care. But her paychecks alone are too scanty to keep the family afloat.

The couple, both 41, have had fertility challenges, and before the pandemic, they were looking into fertility treatments or adoption. Now, without Mr. Rooney’s job and with his company health insurance running out at the end of the month, they can’t afford either possibility.

“It’s really painful to think about what might have been,” Mr. Rooney said. “The pandemic has taken all of that away.”

The Rooneys are planning to move to Texas by November to take advantage of lower housing costs and in hopes that he will have more luck finding work there.

Joe Braxton has been similarly devastated by the disappearance of the $600-per-week supplemental benefit.

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Credit…Ting Shen for The New York Times

For 10 years, Mr. Braxton helped brands market themselves at events like South by Southwest and Comic-Con. But after events across the country were canceled because of the pandemic, Mr. Braxton found himself out of work.

Thanks to a job early in the year at an auto show, he qualified for unemployment benefits, including the $600 federal supplement. That allowed him to keep paying the $1,200 in rent for his one-bedroom apartment in Bladensburg, Md.

When the supplement ended, he was left with $100 a week in state benefits. His landlord allowed him to pay less than the full rent each month until he could find work.

But Mr. Braxton, 40, has not been able to pay for his car loan or auto insurance — which total $860 a month — and he owes $2,700. Now he waits for his car to be repossessed.

“Every day I wake up and I’m like, did they come pick it up yet?” Mr. Braxton said. “I feel like I’m being punished by the pandemic, and it’s not even my fault.”

Some are more fortunate. Pamela Álvarez, 28, was a librarian in Chicago until the pandemic struck. She was furloughed on May 1, and then laid off permanently on July 1. Her husband continued to work, but his overtime shifts were cut back, and when she lost the $600 unemployment supplement, it was hard for them to make their $1,200 monthly rent payment.

Last week, Ms. Álvarez was offered a one-year position with a nonprofit organization that helps low-income people get their furnaces repaired and replaced. She accepted, relieved to have a job even though it paid $16 an hour, compared with her previous $23.

“I still cannot believe that I got a job after applying for over 50 positions,” she said. “It feels like a bit of a dream, and a nightmare at the same time, because now I have to work outside the home during the pandemic and I am afraid of getting sick.”