COVID & Unemployment

Republicans weigh options for pandemic unemployment wage replacement

Jasmine Garsd Jul 24, 2020
Heard on: Marketplace Morning Report
HTML EMBED:
COPY
Senate Republicans have delayed introducing a COVID-19 relief bill. Stefani Reynolds/Getty Images
COVID & Unemployment

Republicans weigh options for pandemic unemployment wage replacement

Jasmine Garsd Jul 24, 2020
Senate Republicans have delayed introducing a COVID-19 relief bill. Stefani Reynolds/Getty Images
HTML EMBED:
COPY

Republicans are still trying to come up with a plan to replace the pandemic unemployment benefits, which millions of Americans have been receiving. That $600 dollar a week benefit expires at the end of this month.

Treasury Secretary Steven Mnuchin said early Thursday that Republicans were talking about capping wage replacement at 70% of a worker’s prior pay. It’s not clear this will be the exact plan Republicans settle on, but what might it mean?

One of the arguments the Republicans have made is that $600 dollars a week is more than some people were earning, so they don’t have an incentive to go back to work.

For someone who used to earn minimum wage, 70% of their prior salary could be just a couple hundred dollars a week.

And, in the end, it’s too complicated for each state to figure out what 70% of everyone’s past wages would be, said economist Gary Burtless from the Brookings Institution.

“It is crazy to have waited this long,” Burtless said. “They should be planning on having something like six to eight weeks, at least, before states are going to be able to implement that in a uniform way.”

Instead, some expect Republicans to end up proposing a flat rate.

“I think the way they’re probably going to do this is just give everyone roughly $200 per week, flat, regardless of who they are,” said Ernie Tedeschi, an economist with Evercore.

Meanwhile, the clock is ticking on the current benefits expiring.

COVID-19 Economy FAQs

With a slow vaccine rollout so far, how has the government changed its approach?

On Tuesday, Jan. 12, Health and Human Services Secretary Alex Azar announced changes to how the federal government is distributing vaccine doses. The CDC has expanded coronavirus vaccine eligibility to everyone 65 and older, along with people with conditions that might raise their risks of complications from COVID-19. The new approach also looks to reward those states that are the most efficient by giving them more doses, but critics say that won’t address underlying problems some states are having with vaccine rollout.

What kind of help can small businesses get right now?

A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.

What does the hiring situation in the U.S. look like as we enter the new year?

New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.

Read More

Collapse

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.