Unemployment claims are soaring. Are the states ready for the onslaught?
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Last Friday was Steve Banchero’s last day of work at David Kerr Violin Shop in Portland, Oregon, where he’s fixed instruments for 30 years. With music performances cancelled and business down, the shop has closed indefinitely.
Layoffs are skyrocketing across the country as COVID-19 spreads along with government instructions to stay home.
Those job losses will start showing up in a Labor Department report due tomorrow: the count of first-time claims for unemployment benefits from all 50 states, the District of Columbia and Puerto Rico. Predictions range from a million new claims — which would be astronomical — to more than 2.5 million. And that’s just for last week.
State unemployment insurance is the first-line safety net for laid-off workers. But many states have cut back since the Great Recession and cover fewer people and offer lower benefits.
Congress, though, is coming to the rescue, promising to send states $1 billion in help with staffing and administration to deal with the onslaught of claims.
And the stimulus bill the Senate has now agreed to will reportedly provide an estimated $200 billion dollars in federal money to pay jobless benefits to workers laid off during the pandemic, workers like Banchero.
“We can do some work at home and we can do repairs, but it’s not exactly a telecommuting business,” he said.
Banchero didn’t apply for unemployment right away. He had heard horror stories of the Oregon website crashing. He finally tried Tuesday night and after some initial glitches, got his claim filed.
Congress is sending money to the states to beef up staffing and administration. But many states make qualifying for and receiving benefits difficult, according to Michael Graetz, professor of tax law at Columbia Law School. Since the Great Recession, some states have reduced unemployment payments, and eight states no longer offer the standard 26 weeks of benefits.
“We’ve got poor and inadequate finance, very inadequate coverage,” Graetz said. “It’s just an archaic, ineffective system.”
The Senate’s new stimulus bill will send billions more to the states, said Michele Evermore, senior policy analyst at the National Employment Law Project.
“I think this will go a long way to smoothing the transition into the next recession,” she said.
It will pay benefits to workers staying at home to care for family members, plus the self-employed and independent contractors.
“This bill also will give everyone — whether they’re on the new pandemic unemployment assistance program or traditional unemployment insurance — an extra $600 dollars a week for four months,” Evermore said. “That increase is huge.”
Evermore says the goal is to replace workers’ pre-coronavirus paychecks and make sure people remain eligible for benefits without having to go out and look for work — the last thing they should be doing during a pandemic.
COVID-19 Economy FAQs
What’s the latest on the extra COVID-19 unemployment benefits?
As of now, those $600-a-week payments will stop at the end of July. For many, unemployment payments have been a lifeline, but one that is about to end, if nothing changes. The debate over whether or not to extend these benefits continues among lawmakers.
With a spike in the number of COVID-19 cases, are restaurants and bars shutting back down?
The latest jobs report shows that 4.8 million Americans went back to work in June. More than 30% of those job gains were from bars and restaurants. But those industries are in trouble again. For example, because of the steep rise in COVID-19 cases in Texas, Gov. Greg Abbott, a Republican, increased restrictions on restaurant capacities and closed bars. It’s created a logistical nightmare.
Which businesses got Paycheck Protection Program loans?
The numbers are in — well, at least in part. The federal government has released the names of companies that received loans of $150,000 or more through the Paycheck Protection Program.
Some of the companies people are surprised got loans include Kanye West’s fashion line, Yeezy, TGI Fridays and P.F. Chang’s. The companies you might not recognize, particularly some smaller businesses, were able to hire back staff or partially reopen thanks to the loans.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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