Democrats Want To Keep Increased Jobless Benefits, Want Bill Tying Compensation To Unemployment Rate

The day before the June unemployment figures are released, Senate Democrats on Wednesday introduced legislation that would extend supplemental coronavirus pandemic benefits beyond their July 31 scheduled expiration.

The Department of Labor releases its monthly jobless report Thursday, a day early because of the Fourth of July holiday. Experts expect the rate to fall at least a point from May’s 13.3% rate, reflecting easing of coronavirus restrictions.

The numbers, however, would have been collected before the number of new daily cases began hitting records across the South and West in areas largely unscathed in the initial wave of infections. It also was unclear whether the Bureau of Labor Statistics has been able to correct an error in the system that statisticians admit could mean the actual rate is at least 3 points higher.

The CARES Act, adopted in March, provided an extra $600 a week in unemployment benefits. Republicans oppose any extension, fearing it dissuades people from accepting new jobs and have suggested, instead, a $450 weekly bonus to people who return to work.

At a news conference Tuesday, Senate Minority Leader Chuck Schumer said a hiring bonus does nothing to help people who can’t find work.

The measure introduced by Schumer, D-N.Y., and Sen. Ron Wyden, D-Ore., the ranking member on the Senate Finance Committee, would extend the benefit boost until a state’s unemployment rate falls to a three-month average of less than 11%. The benefit then would decrease by $100 a week until unemployment dips to less than 6%.

Some 20 million Americans currently are collecting unemployment benefits.

“If we fail to renew the $600 per week increase in UI, millions of American families will have their legs cut out from underneath them at the worst possible time – in the middle of a pandemic when unemployment is higher than it's been since the Great Depression,” Schumer said in a statement Wednesday.

The Schumer-Wyden proposal also extends the Pandemic Emergency Unemployment Compensation program until a state’s unemployment rate falls below 5.5%. The program applies to people who have exhausted their state’s unemployment benefits, providing them with an additional 13 weeks of compensation.

The Federal Reserve has predicted the unemployment rate will remain high through the end of the year, about 9.3% by December, and not fall back to 5.5% until 2022. Indeed.com chief economist Jed Kolko noted Tuesday though postings for low-paying jobs show a modest increase, those for higher-paying jobs show much lower gains.

“Income inequality has been exacerbated by the downturn and will likely persist,” Bankrate.com senior economic analyst Mark Hamrick said in an email to International Business Times. He noted much of the improvement in May was in hiring by bars, restaurants and hotels – all especially vulnerable to a resurgence in coronavirus cases – and in retail.

“But there’s still a long way to go given that the jobless rate for leisure and hospitality alone was a stunning nearly 36%,” he noted.