AP Contends That Unemployment Claims Are 'Stabilizing,' Misses N.Y.-Only Element of the Verizon Influence

In his coverage of the Department of Labor's weekly report on unemployment claims this morning, the Associated Press's Christopher Rugaber, after noting how initial claims filed by Communications Workers of America members who are on strike against Verizon (more on that later) inflated this week's and last week's results, wrote that "excluding the work stoppage, layoffs appear to be stabilizing. That should help ease fears that the economy is on the verge of a recession."

The following chart, which excludes those workers' claims during the past two weeks, doesn't exactly give wholehearted support to Rugaber's key contentions:



WeeklyUnempClaimsExlVerizonCWA082011

Unless Chris's crystal ball is better than mine, a 10,000-claim, one-week jump is not a particularly strong indicator of "stabilizing," let alone a justification for contending that the news should ease recession fears -- and this is before the current week gets revised. In 23 out of the past 24 weeks, the initially reported claims number has been revised upward. Including the one week where there was no change, the subsequent-week revision has averaged over 4,000 claims.

Now let's look at those CWA/Verizon initial claims. Here's what Rugaber wrote about them:

... last week's non-seasonally adjusted total included about 8,500 of those employees, the department said. About 12,500 striking workers filed claims two weeks ago.

About 45,000 Verizon workers went on strike Aug. 7. Unions representing the workers ended the strike earlier this week.

Typically, workers who walk off the job aren't eligible for benefits. But states have specific rules governing labor disputes.

... Joshua Shapiro, an economist at MFR Inc., calculated that without the strike, applications would have dipped to 397,000 two weeks ago and risen to 407,000 last week. (The official all-inclusive totals are 412,000 and 417,000, respectively -- Ed.)

It turns out (HT to emailer Bill Sloat) that only one state allows striking workers to collect unemployment benefits, something I would think that those among Rugaber's readers who probably figured out on their own that less than half of those striking were collecting benefits would liked to have known (bold is mine):

Why Verizon Strikers Filed For Jobless Benefits

U.S. workers are usually denied jobless benefits when they go on strike. After all, they walked off the job.

Except in New York. The state is the only one in the U.S. that in some cases allows striking workers to receive unemployment benefits, according to a union official.

Apparently, thousands of workers at Verizon Communications (VZ) are trying to take advantage of the rare law. During a two-week strike that ended Tuesday, about 21,000 union members filed applications for unemployment compensation, according to the U.S. Labor Department.

Those workers might be eligible for the $405 maximum weekly benefit New York provides. The state labor office was unable to immediately say who is eligible and under what circumstances.

Interesting -- and outrageous. Go on strike in New York, get a check. Only 16,000 of the 21,000 mentioned live in New York; the other 5,000 filed in other states, and will presumably have their claims denied. Assuming seemingly safely that the large majority of the 16,000 workers living in New York were eligible and entitled to collect the $405 maximum benefit, the weekly cost to the state before workers agreed a few days ago to come back as negotiations continue was about $6 million.

If Empire State Democratic Governor Andrew Cuomo was really serious about getting the state's house in order, he'd put a stop to striker eligibility for unemployment benefits. I'd love to be surprised, but I'll bet it's not even on his radar.

Cross-posted a BizzyBlog.com.


Tom Blumer
Tom Blumer
Tom Blumer is a contributing editor for NewsBusters.