After last Friday’s weak jobs report, over a dozen GOP-led states have announced that they’ll be pulling out of federal unemployment benefits, with governors saying they want to urge workers to get back to work.
“Federal pandemic-related unemployment benefit programs initially provided displaced Iowans with crucial assistance when the pandemic began,” Iowa Gov. Kim Reynolds said in her announcement that the state would pull out of benefits on June 12. “But now that our businesses and schools have reopened, these payments are discouraging people from returning to work.”
The National Employment Law Project (NELP), a progressive think tank, has some ideas for how workers cut off by their states could still receive benefits.
It sent the Department of Labor (DOL) a letter with potential options for getting that funding to workers, and noted that the CARES Act stipulates that the DOL disburse Pandemic Unemployment Assistance (PUA) to everyone eligible, which includes gig workers. So while states could cut the additional $300 in benefits, the DOL may have to ensure that at least some federal assistance remains intact.
According to a report from The Century Foundation (TCF), at least 895,000 workers will be impacted by the cuts already announced – and more are likely coming. TCF’s report captured 12 states; a thirteenth, South Dakota, has since announced that it’ll be pausing benefits in June 26.
Some workers will lose benefits completely when these orders take effect. Millions of workers have received extended benefits, and are newly eligible under the PUA program – and ones in impacted states could be fully cut off from those. According to a Washington Post analysis, over 600,000 workers could lose all of their benefits. Others will see their incomes plummet to their state’s regular unemployment benefits, no longer beefed up by the additional $300.
“The way that the law, the CARES act is written, it requires DOL to provide Pandemic Unemployment Assistance,” Steve Gray, senior counsel on NELP’s Social Insurance Team, told Insider. He said it’s required to provide that for as long as funds are available, which is currently September. He added: “They’ve got a sort of statutory duty to do that.”
The NELP’s suggestions: The DOL could require that states continue to pay PUA. Alternatively, it could create agreements with states to provide PUA for individuals in other states where benefits have been rolled back – similar to prior hurricane relief measures.
Sen. Bernie Sanders wrote on Twitter on Thursday that he sent a letter to Labor Secretary Marty Walsh reminding him of the DOL’s mandate to provide PUA assistance, and calling for the department to ensure benefits to workers in states pulling back.
“It is critical that the Department of Labor does everything in its power to ensure that jobless Americans continue to receive this aid as the law intended,” Sanders wrote.
The Department of Labor told Insider it has received the NELP’s memo and is reviewing it.
‘These actions are based on the misguided belief that jobless benefits are creating labor shortages’
Groups like the Chamber of Commerce have advocated for ending the extended benefits, and, as Forbes’ Andrew Solender reports, at least 10 Senate Republicans are throwing their support behind a bill to end benefits in June, rather than September. Democratic Sen. Joe Manchin has said that he does not support extending the measure past September, when it’s set to expire.
As TCF notes, the move to pull out of federal benefits will likely disproportionately impact Black workers, who make up a higher percentage of UI recipients in at least three of the states.
“These actions are based on the misguided belief that jobless benefits are creating labor shortages, but we know this to be untrue as research has shown more generous unemployment insurance benefits has not reduced labor supply,” Rep Don Beyer (D-VA) said in a comment to Insider. “It is the pandemic, not the rescue, that is causing labor shortages.”
Some progressive lawmakers had already called for wider UI reforms, citing the number of workers who have used PUA as one reason to expand eligibility. In his latest economic package, President Joe Biden pledged to work on reforming unemployment insurance, although the promise did not come with any money or specifics.
One of those legislators calling for reforms was top Democrat Sen. Ron Wyden of Oregon, who has continually pushed for expanded unemployment benefits throughout the pandemic.
“The Labor Department must explore all options to keep these workers from losing their income,” Wyden said in a comment to Insider. “States enter into agreements with the Labor Department in terms of administering these benefits, and there are serious questions as to whether they can just back out. Mothers without child care are not going to be back on the job in just a few weeks’ time, and they shouldn’t face financial ruin for living in states run by Republicans.”
*story by Business Insider
