Federal unemployment aid is now a political starting point


Of the more than four million people whose unemployment benefits will be cut in the next few weeks, Bre Starr will be among the first.

That’s because Ms. Starr – a 34-year-old pizza delivery driver who has been unemployed for over a year – lives in Yes, where the ruler decided Withdrawing all federal unemployment assistance related to the pandemic next Saturday.

Iowa is one of 25 states, led by Republicans, that recently decided to halt some or all emergency benefits months ahead of schedule. With the report of the Ministry of Labor on Friday shows that Job growth fell below expectations For the second month in a row, Republicans have stepped up their argument that easing epidemics of unemployment is hampering recovery.

The aid, which was renewed in March and funded through September 6, does not cost states anything. But business owners and managers argued that income, which enabled people to pay rent and stock up on refrigerators when the economy collapsed, now discourages them from applying for jobs.

“Now that our businesses and schools have reopened, these payments are discouraging people from going back to work,” Iowa Governor Kim Reynolds said in announcing the dismissal. “We have more jobs available than the unemployed.”

While the governor is complaining that people are not returning to work soon enough, some Iowans respond that they are being forced to return too soon.

“I have type 1 diabetes so it is really important that I stay safe from Covid,” said Ms Starr, explaining that she was at a higher risk of infection. “I know that for me and other people at high risk, we can’t risk going back to the work force until everything is fine again.”

But what does “good again” mean?

Cases of Covid-19 are down in Iowa as they are across the country, and deaths are at their lowest levels since last summer. status restrictions Lifted in February, businesses reopened, and Iowa’s unemployment rate was 3.8 percent in April, the most recent period for which state numbers are available — well below the national rate of 6.1 percent that month. (unemployment rates In the 25 states that cut benefits, it ranged from 2.8 percent to 6.7 percent).

Most economists say there There is no single clear explanation Yet the difficulty some employers face in hiring. Government relief may play a role in some cases, but it can play a lack of child careContinuing concerns about infection, low wages, difficult working conditions and normal delays Associated with the reopening of a huge economy.

However, private complaints that government benefits undermine the desire to work have struck a chord among Republican political leaders.

In Ms. Starr’s case, Ms. Reynolds’ move to end Iowa’s federal unemployment benefit is likely to have its intended effect.

Ms. Starr can be counted among the long-term unemployed. She’s relied on a combination of pandemic-related benefits since last spring, when she quit her job as a delivery driver for Domino’s Pizza after co-workers started getting sick.

She may have already regained her job; Domino’s in Des Moines announces to drivers. But Mrs. Starr was reluctant to come forward.

“A lot of people in Iowa don’t wear masks – they think Covid is fake,” said Ms Starr, who worries not only about her susceptibility to infection but also about the health of her 71-year-old father. Who you help care for: He suffers from emphysema, diabetes and heart problems.

Early withdrawal from the federal government’s network of jobless relief programs affects everyone in the state who collects unemployment insurance. Ms. Starr, like all recipients, will lose a $300 weekly federal salary that is designed to supplement unemployment benefits, which generally replace a fraction of someone’s previous wages. In most states, the decision will also end pandemic unemployment assistance, which includes the self-employed, part-time workers and the self-employed who typically do not qualify for unemployment insurance. It will stop emergency compensation for pandemic unemployment, which continues to pay compensation to people who have exhausted their usual benefits.

In addition to the supplemental $300, Ms. Starr gets $172 a week in help combating epidemics and unemployment. The total amount is about $230 less than what she earned in her previous job. She said government checks pay for her rent, food, and some of her father’s medicine.

Ms Starr, who has been vaccinated, said the governor’s order may force her to return to work despite her health concerns. She said she was considering some sort of customer service job from her home, although that would require her to buy a laptop and possibly get landline phone service. Absent that, she said, you may have to get another delivery job or work in an office.

Whether her case is evidence that ending unemployment benefits early makes sense depends on one’s point of view.

In many cases, the problem is not people’s unwillingness to work, said Jesse Rothstein, professor of public policy and economics at the University of California, Berkeley. Instead, benefits give the unemployed more choices, he said, such as the ability to “say no to things that may not be safe or not appropriate.”

However, Mr. Rothstein cautioned against drawing general conclusions.

“It reopened very quickly,” he said. As a result, he said, it is not surprising that there is friction in raise and hiring that may not have anything to do with benefits. “It may take a few weeks to reopen the door,” he added. “Some of the problems that employers have with finding workers is that they try to find them on the same day.”

On the online job site, job searches are up in states that have announced early termination of federal unemployment benefits compared to the national trend. Jed Kolko, Indeed’s chief economist, said the increase was modest – around 5 per cent – and disappeared a week later. And it wasn’t the only low-paying jobs that were attracting more responses; So did jobs and funding slots for doctors.

Aside from any discussion about the impact of unemployment benefits on the labor market, economists have warned of the long-term scars that the pandemic has inflicted on the economy.

“It is important to remember that we are not going back to the same economy,” said Federal Reserve Chairman Jerome H. Powell, He said. “This would be a different economy.”

“The real concern is that long-term unemployment can allow people’s skills to atrophy, their ties to the labor market diminish, and they have difficulty returning to work,” he said.

Nearly 41 percent of the country’s 9.3 million unemployed fall into the long-term category, defined as more than 26 weeks. About 28 percent of the total are unemployed for more than a year.

Historically, this group, which is disproportionately made up of blacks and older Americans, has had a more difficult time hiring. Carl Van Horn, Founding Director of Heldrich Center for Workforce Development at Rutgers University.

Mr Van Horn said employers tend to take a negative view of people who have been out of work for too long or have holes in their resumes, regardless of the reasons.

“Employers are always complaining about not being able to find the job seeker they want at that moment at the price they are willing to pay, whether it’s the best economy in 50 years or a bad economy,” he said.

The problem with early termination of unemployment benefits, he said, is that “this broad brush policy also punishes people who are desperately looking for work.”

This is the situation Amy Cabrera says she faces in Arizona. Since being furloughed last summer, Ms. Cabrera, 45, has been living on about $500 a week in unemployment benefits, after taxes — nearly half of her $50,000 salary at her previous job conducting audits at Meetings and Events at American. Express.

To make ends meet, she gave up her car lease and sublet a room in the house she rented in Saint-Tan Valley, southeast of Phoenix. “I pay for my food – everything I need to survive – and that’s it,” she said, as she sat in a second-hand 2006 Jeep she bought so she wouldn’t be neglected. Food vouchers help pay for her meals.

But Mrs. Cabrera rejected the idea of ​​so many jobs in Arizona, as the governor moved there Ending the $300 Federal Supplement on July 10. She said many of the positions eligible to fill her, including executive management and office management positions, pay $15 an hour, not enough to pay her $1,550 monthly rent and a portion of her son’s college tuition. Jobs in Phoenix or Tempe require her to travel approximately two hours each way during rush hour. Because of her bad back, she cannot get a job that requires her to spend time on her feet.

“I’ve been really looking for work,” said Ms. Cabrera. However, out of about 100 jobs she was estimated to have applied for, only one interviewed.

She said she doesn’t know how she’ll survive on her remaining unemployment benefits — $214 a week after taxes — when she loses the extra $300.

“I don’t have an answer for that yet,” she said. “I was just trying to beat the punches.”

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