Almost one-third of unemployment benefits estimated to be owed to the millions of Americans who lost their jobs as a result of the coronavirus slump haven’t been paid yet, as flagship policies struggle to cope with the unprecedented wave of layoffs.

The Treasury disbursed $146 billion in unemployment benefits in the three months through May, according to data published Monday – more than in all of 2009, when jobless rates peaked after the financial crisis.

But even that historic figure falls short of a total bill that should have reached about $214 billion for the period, according to Bloomberg calculations based on weekly unemployment filings and the average size of those claims.

The estimated gap of about $67 billion shows how emergency efforts to boost payments, and deliver them via creaking state-level systems, are lagging the needs of a jobs crisis during which more than 40 million people filed for unemployment as the economy shut down.

Safety net

The gaps in America’s social safety net are becoming apparent at the same time protests erupt over longstanding racial inequities. The debate over how and when to reopen businesses even as the pandemic continues is also turning acrimonious, in a nation that increasingly feels like a tinderbox.

There’s “a huge hole,” said Jay Shambaugh, an economist at Brookings Institution who has been tracking the unemployment payments. “There’s a lot more money that should have gone out that has not gone out.”

The bill is still mounting. Economists estimate that another 1.8 million people filed for unemployment last week. That data is due out on Thursday, while Friday’s monthly numbers are forecast to show a jobless rate of 19.5% in May, the highest since the Great Depression.

When the pandemic struck, policy makers responded with a $600-a-week boost to unemployment benefits, alongside measures to make more people eligible. The aim was to stop the spread of the virus by encouraging laid-off workers to stay home, and cushion its economic impact by replacing lost incomes, sometimes in full.

But for many people the money simply hasn’t turned up.

‘Running out’

Bob Radcliffe, who lives in Morristown, N.J., lost his job selling touchscreen displays to retailers in early March. He filed for unemployment shortly after, expecting to get the state’s maximum payment, about $1,300 a week after the federal top-up.

By that reckoning, he’s now owed almost $15,000. But Radcliffe, who has four children under age 8, says he still hasn’t received any benefits or an explanation for the holdup. For now, he’s taking advantage of the three-month mortgage forbearance on offer at his bank, and surviving on his last commission check.”

I’ve had money to live. I’m not a desperate case,” he said. “But I’m running out.”

The Treasury reports its unemployment disbursements daily. Bloomberg’s calculation of what should have been paid is based on continuing claims for benefits, including those filed under a special program that widened the safety net to include contractors and gig workers. (It assumes filings for missing weeks in May will be in line with the average in preceding weeks).

Those claims were multiplied by the weekly unemployment benefit, using the $378 state average plus the $600 boost that’s due to expire at the end of July.

State backlogs

In response to questions from Bloomberg News, a spokesperson for the Labor Department said that using its weekly claims report, which delineates those filing for continuing benefits each week, was “not an effective data point to get at unpaid claims.” The department doesn’t track how many claims haven’t been paid, the spokesperson said.

It is also challenging to use these numbers because states are struggling to keep up with demand and some have backlogs they are working through, the spokesperson said.

When all that paperwork is done, the Bloomberg calculation probably understates the total amount owed to unemployed Americans.

It doesn’t include the millions of workers around the country still waiting to have claims processed by overloaded systems or the retroactive benefits owed to some of the 7.8 million people now claiming under the Pandemic Unemployment Assistance program for independent contractors. That 7.8 million figure is also incomplete because not all states have reported how many of their residents have filed PUA claims.

‘Protracted recovery’

In Texas where more than 2.6 million unique claims for jobless benefits have been filed since March, the backlog of cases still waiting to be verified at the end of last week stood at almost 650,000.The state has expanded call centers and redeployed other workers to help deal with the claims. But attention has also shifted to other tasks like reopening the economy and helping people find jobs, though that will take time.

One in 5 workers in the state’s oil and gas industry, for example, has filed for unemployment. Those jobs will probably come back in the end, according to Jesse Thompson, a senior business economist at the Houston branch of the Federal Reserve Bank of Dallas, but it may take until early 2022 to run off the inventories of crude oil that piled up while the economy was in lockdown. “It’s going to be a protracted recovery.”

Nationally, economists expect the economy to be creating jobs again in the second half of this year – possibly at record rates, as states reopen. The bill for unemployment benefits will likely peak in May or June, according to Shambaugh at Brookings.

Republicans and Democrats have begun debating whether to extend at least some of the extra unemployment payments beyond their July expiration date. Business owners have complained that the benefits, which on average equate to an annual salary of more than $50,000, are discouraging employees from returning to work. But scrapping them could prompt a new crisis for millions of families and slow the economy’s recovery.

‘Fiscal fatigue’

Diane Swonk, chief economist at Grant Thornton LLP, says that failure to extend benefits may end up prolonging the crisis. But she’s worried that Congress, which has approved emergency measures worth some $2.2 trillion during the pandemic, may be suffering from “fiscal fatigue.”

“We’re really talking about an economy that is going to be operating at a fraction of its capacity for a long period of time,” she said.

At the local level, underinvestment has left many states with aging computer systems and unemployment programs that can seem more designed to slow payments than expedite them. Small mistakes can hold up claims for weeks. So can things like forgotten online passwords, with some states insisting on sending new ones out by the post, according to Michele Evermore, a senior researcher at the National Employment Law Project who’s been documenting such shortcomings for years.

The delays also point to the difference in the scale of the unemployment crisis in the U.S. versus European and other advanced economies with more robust safety nets.

Stimulus checks of as much as $1,200 per adult from the federal government have helped many families pay the rent or initial food bills. But that amounts to a little more than a week’s unemployment benefits for many who lost their jobs.“

On paper the U.S. strategy is very generous,” said Ernie Tedeschi, a former U.S. Treasury economist now at Evercore ISI. “But that generosity on paper is meaningless if it doesn’t translate into actual money in people’s pockets when they need it.”