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Democrats call for UI system fix as millions face another lapse in benefits

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Sen. Ron Wyden, the top Senate Democrat overseeing unemployment issues, is calling on Congress to give the Labor Department $500 million to shore up the bewildered state unemployment system.

Hobbled by antiquated computer systems, state agencies responsible for paying out unemployment benefits have struggled to administer new emergency aid programs created for the millions of people pushed out of work during the pandemic, leaving many jobless people without much-needed aid for weeks.

And if lawmakers are unable to move quickly on their latest pandemic rescue package, the issue could mean that as many as 11.4 million workers could face yet another lapse in benefits when expanded unemployment programs expire again next month.

A bill released Wednesday by Wyden and Democratic Sens. Sherrod Brown (Ohio), Mark Warner (Va.), and Catherine Cortez Masto (Nev.) is aimed at fixing those systemic issues, calling on the DOL to develop a uniform system for jobless benefits that states can use to remedy their systems.

“While enhanced jobless benefits have enabled millions and millions of families to pay the rent and buy groceries, state after state has been unable to get benefits out the door in a timely manner,” Wyden said in a statement. “My bill requires a complete overhaul of unemployment insurance technology, and paves the way for one website to apply for jobless benefits, not 53.”

But some state officials point the finger at Washington for not giving them adequate time to prevent a lapse in benefits, arguing that lawmakers have taken too long to approve extensions in the programs, resulting in delayed guidance on how to administer the changes.

As part of his $1.9 trillion economic rescue package, President Joe Biden has called on Congress to extend several federally funded CARES Act jobless benefit programs through September 2021. But, the legislation Democrats have proposed would only extend them through Aug. 29, 2021.

A Senate Finance committee staffer told POLITICO that Wyden is “certainly looking” at whether the proposals could fit into the relief package. But the measure would have to comply with the strict budget rules that accompany the fast-track process known as reconciliation that Democrats are using to pass the next Covid-19 aid package with a simple majority in the Senate.

Even if it is passed quickly under budget reconciliation, the bill won’t have an immediate effect, as it lays out a two-year timeline for implementation.

Currently, while DOL oversees the unemployment system rules and funds the administrative costs, it’s up to 53 individual state and territorial unemployment agencies to actually process unemployment claims and get the benefits into the pockets of those who qualify.

But their archaic systems have struggled under the fast pace of job losses caused by pandemic-related shutdowns throughout the past year and a wave of fraud targeting the beefed up unemployment benefits Congress provided under one of the pandemic aid packages.

As a result, any changes to jobless benefit programs have taken weeks for states to implement.

Some workers who used up all 39 weeks of their unemployment benefits offered under federal programs last year still haven’t been able to tap into the extra 11 weeks of benefit provided under the extension of unemployment aid enacted by Congress in December.

In California, six percent of unemployment claimants — 185,000 people — won’t have access to those benefits until March 7, according to California’s Employment Development Department.

“What’s the roadblock here?” California Assemblymember Jim Patterson (R-Fresno) said in reaction to news of the delay last week. “The roadblock to getting money to massive amounts of people who need it and need it desperately is the same old problem. Dinosaur technology.”

But in New Jersey, state officials blamed Congress for not giving states enough time to stand up the latest round of benefits. New Jersey prioritized getting the $300 benefit out the door first, as it would help all people who were receiving unemployment. But about 75,000 workers whose unemployment benefits had expired were left in limbo as programmers worked to feverishly update the 11-week benefits extension into their system.

The issue was ultimately resolved on Saturday, but New Jersey’s labor commissioner said in a press conference last week that Congress waiting caused “significant pain” for these 75,000 workers, who represented about 5 percent of the state’s claimants.

“The frustrations our workers are feeling are taking place all over the nation right now, as a result of last minute federal action,” Labor Commissioner Robert Asaro-Angelo said, before the programming problem was resolved. “If [Congress] had acted just weeks before the expiration date they knew was looming for months, states would have had the time needed to keep benefits for some from lapsing at all.”

New Jersey’s technology system is in desperate need of upgrades. But other states that have spent large sums of money modernizing their systems are having the “exact same challenges with this subset of claimants,” Asaro-Angelo said.

This blog originally appeared at Politico on February 10, 2021. Reprinted with permission.

About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter.


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Reversing job market opens door to larger Biden stimulus

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The latest coronavirus wave slammed the U.S. economy in December, wiping out 140,000 jobs, raising pressure to accelerate vaccinations and blowing the door open for President-elect Joe Biden and a narrowly Democratic Congress to push for even more stimulus spending within weeks.

The December employment report, the last to be released during President Donald Trump’s administration, leaves the nation around 11 million short of the level of jobs from before Covid-19 crushed the economy and wiped out around 23 million jobs. Trump’s record will now include a recovered stock market but an enormous net loss of jobs.

Most of the losses in December, nearly 500,000, came in the leisure and hospitality industries as fresh lockdowns and lower travel led to widespread layoffs. The expiration of some of the first big stimulus package, passed back in March, also left consumers with less money to spend, hitting demand in the economy.

The December tumble, which left the jobless rate at 6.7 percent, suggests the distribution and adoption of coronavirus vaccines must increase rapidly in order to avoid much worse damage and allow for potential recovery in the spring and summer. 

And it will give Biden and the Democrats wider leeway to force through trillions of dollars more in stimulus spending — by whatever legislative means available — including significant help for state and local governments. It also means the Democrats will likely be able to approve enough direct cash to reach the “$2,000 check” level they’ve long supported, when including the $600 checks approved by Congress and signed by Trump last month. 

“The economy went into reverse in December and we are still 11.5 million jobs short of where we were and the biggest problem was the virus and the expiration of stimulus,” said Harvard professor Jason Furman, who served as chair of the Council of Economic Advisers under President Barack Obama. “Much more action is needed to control the virus and support the economy. And I think that will be enough to generate large improvements over the course of 2021.”

The December jobs report cements a strange legacy for Trump. The nation will have millions of jobs fewer than when he took office, partly due to a slow and halting federal response to the coronavirus. But the stock market has regained all its losses from the spring and now is hitting records once again as many companies that thrived during lockdowns soar and investors bet on a stronger 2021.

The bifurcation has led to a stark “K-shaped” recovery in which the top level of workers have largely if not completely recovered while tens of millions of Americans in lower-paying service industry jobs suffer. Economic inequality, already bad before the virus hit, is now at levels not seen since the 1920s before the Great Depression. Reversing that trend is among Biden’s top priorities. And he now has more weapons at his disposal with the narrowest of Senate majorities following Democrats‘ two special election wins in Georgia. 

Biden will have full control of Washington — though not a filibuster-proof majority in the Senate — during the first two years of his term. And his economic advisers plan a heavy focus on spending to boost vaccination distribution, support strapped state and local governments, improve American infrastructure, further expand jobless benefits and pump more direct cash into individual households. 

Economists and Wall Street analysts say some of the recent market ebullience is based on the assumption that Biden will be able to deliver on much of this even if Democrats decide against blowing up the legislative filibuster, which requires 60 votes in the Senate to overcome. 

But they will have multiple opportunities to use the “budget reconciliation”vehicle to pass significant spending increases with a one-vote margin in the Senate. There is also the chance that more Republicans in the Senate will come around to the need for bigger stimulus spending given the wave of new coronavirus cases and the slow nature of the vaccine rollout.

“With the elections in Georgia giving control to the Democrats, we should expect to get a fairly large and targeted fiscal aid package in the first quarter of the year which investors clearly have seized on,” said Joseph Brusuelas, chief economist at consulting firm RLM. “We are going to get a targeted fiscal aid package quickly then another stimulus package and then infrastructure. And these are all huge things.” 

The state and local aid will be especially important as states are already struggling to pay billions in extended benefits approved by Congress last month, leading to several weeks of delays in payments in places like California, Michigan, Florida and Washington. Losses in state and local government jobs forced by lower Covid-era tax receipts and the need to balance budgets is also driving down the national jobs numbers. 

Failing to approve larger stimulus spending could push the economy into either a double-dip recession or a repeat of the slow, halting and unequal recovery that followed the financial crisis of 2008. The Biden team, many of whom worked in government during the Obama years, is determined to learn the lessons of the last major slowdown.

Still, even with major stimulus spending, the recovery will depend in large part on effective and widespread adoption of vaccines. And even then, it may take years to return to economic conditions before the virus hit. “I’m worried some of the scarring is extensive enough that we will be far from fully recovered at the end of 2021,” said Furman. “Today’s number expands what was already an open window for more support for the economy, but we will not be back in perfect condition until 2022 or 2023. It’s going to take a while in some places.”

Job losses in December, which ended seven months of gains following the enormous virus-induced declines, largely came in the service industry where restaurants and bars slashed 372,000 positions as cold weather and new lockdowns limited demand. Overall, employment in leisure and hospitality — which includes hotels, tourist sites and other categories, declined by 498,000. Gains in professional and business services, retail and other areas were not enough to offset the giant losses elsewhere. Government jobs declined by 45,000 amid growing budget crunches around the nation. 

There are now around 11 million unemployed and the jobless rate remained at 6.7 percent, well below its Covid-ear peak of over 14 percent but still double what it was before Covid hit. And there are still nearly 20 million Americans on some form of jobless assistance.

But Wall Street traders and many economists remain hopeful that the slide in jobs will reverse fairly early next year given prospects for vaccines and more fiscal aid. Should either of those things fail, however, the numbers could get significantly worse. 

“While we remain very upbeat on the US’ medium- to long-term prospects, we have to be braced for more bad economic data that could last well into the second half of 2021,” James Knightley, chief international economist at financial firm ING, wrote in a note to clients on Friday.

This blog originally appeared at Politico on January 8, 2021. Reprinted with permission.

About the Author: Ben White is POLITICO Pro’s chief economic correspondent and author of the “Morning Money” column covering the nexus of finance and public policy.


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“THIS IS NOT GOOD NEGOTIATING. THIS IS A COLLAPSE”–BERNIE SANDERS

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Late last night, Congress passed a $908 billion COVID relief bill that will extend unemployment benefits through the early spring, provide support for small businesses, schools, health care, nutrition, rental assistance, childcare, broadband, and the Postal Service, as well as funding to help distribute vaccines.

This legislation also includes, importantly, a $600 direct payment for every working class American earning less than $75,000 a year or $150,000 for a couple — plus $600 for each child. Let me be clear: this provision was not in the bill just two weeks ago. And, given the enormous economic desperation that so many working families are now experiencing, it is nowhere near enough as to what is needed. But, given the strong opposition of the Republican leadership in Congress and a number of Democrats, it’s no stretch to say that it would not have happened at all without our efforts, the hard work of progressive members in the U.S. House and grassroots progressives throughout the country. Republican Senator Josh Hawley also played an important role.

But let me state the obvious. The total funding in this bill was not even close to good enough, and my fear is that by reaching this agreement we are setting a bad precedent and setting the stage for a return to austerity politics now that Joe Biden is set to take office.

Remember, way back in May, the House passed a $3.4 trillion HEROES Act, which was a very serious effort to address the enormous health and economic crises facing our country. Two months later, the House passed another version of that bill for $2.2 trillion.

That same month, Republican Majority Leader Mitch McConnell proposed a $1.1 trillion piece of legislation that included a $1,200 direct payment for every working class American.

Months later, Treasury Secretary Steve Mnuchin, negotiating on behalf of President Donald Trump, proposed a COVID relief plan with Speaker Pelosi for $1.8 trillion that also included a $1,200 direct payment.

And yet, after months of bi-partisan negotiations by the so-called Gang of 8, we ended up with a bill of just $908 billion that includes $560 billion in unused money from the previously passed CARES Act — a worse deal than was previously proposed by Mitch McConnell and Donald Trump.

So we went from $3.4 trillion, to $2.2 trillion, to $1.8 trillion from Trump and $1.1 trillion from Mitch McConnell to just $348 billion in new money — roughly 10 percent of what Democrats thought was originally needed and half of what Trump and McConnell offered in direct payments.

This is not good negotiating. This is a collapse. [my emphasis] It is also no coincidence that as it became clear Joe Biden would become the next president of the United States, we started to hear a lot of talk from my Senate colleagues in the Republican Party about their old friend the deficit.

We couldn’t afford $1,200 for every working class American and $500 for their children because of the deficit.

We couldn’t afford to support state and local governments struggling during the middle of this health and economic crisis because of the deficit.

We couldn’t afford more meaningful and robust unemployment benefits for those who lost their jobs during the middle of this pandemic because of the deficit.

Yet, this is the same Republican Party so concerned about the deficit that they passed a $1.9 trillion tax bill benefiting some of the richest people and largest corporations in this country.

This is the same Republican Party so concerned about the deficit that they, just last week, pushed through the largest defense spending bill in the history of this country, a total of $740 billion. This is more money than the next 10 nations combined spend in their defense budgets.

This is the same Republican Party so concerned about the deficit that they spent trillions of dollars on war over the past two decades.

This is the same Republican Party so concerned about the deficit that it gives hundreds of billions of dollars in giveaways to oil, gas and coal companies that exacerbate the climate crisis.

This is the same Republican Party so concerned about the deficit that it provides huge amounts of corporate welfare to companies like Walmart that pay their workers starvation wages and provide them meager benefits that must be supplemented by taxpayer-supported programs.

And during any of these debates, do you recall any of my Republican colleagues asking how these proposals were going to be paid for? I don’t. So forgive me for thinking their sudden display of concern for the deficit seems a bit insincere. More to the point: it’s total hypocrisy!

And our concern at this moment is that no matter what happens in Georgia next month, and which party controls the Senate, we cannot allow this type of inadequate negotiation again on major legislation. Yes. The deficit is important, but it is not the most important thing. At this unprecedented moment in American history, with a growing gap between the very rich and everyone else, and when many millions of Americans are suffering, Democrats in Congress must stand up for the working families of our country. No more caving in.

Today, half of our people are living paycheck to paycheck, one out of four workers are either unemployed or making less than $20,000 a year, more than 90 million Americans are uninsured or under-insured, tens of millions of people face eviction, and hunger in America is exploding. Tragically, there is more economic desperation in our country today than at any point since the Great Depression.

We have a responsibility to the struggling families of our country.

And let’s be honest: if we allow Republicans to set the parameters of the debate going forward, like they did in this current COVID relief bill, the next two to four years are going to be a disaster.

Want to expand health care? Where’s the money going to come from?

Want to rebuild our infrastructure? Where’s the money going to come from?

Want a Green New Deal, or even support for Joe Biden’s more modest climate proposal? Where’s the money going to come from?

So the fundamental political question of our time is: are we going to allow Mitch McConnell, the Republican Party and corporate America to return us to austerity politics, or are we going to build a dynamic economy that works for everyone?

My fear is that this COVID relief bill sets a very dangerous precedent for when Joe Biden takes office next month. And we cannot allow that to happen.

Going forward, Democrats must have an aggressive agenda that speaks to the needs of the working class in this country, income and wealth inequality, health care, climate change, education, racial justice, immigration reform and so many other vitally important issues. And in that struggle, we all have a role to play. So please, make your voice heard in the weeks and months ahead. Call your members of Congress, post your thoughts on social media, encourage progressives in your community to run for office, and volunteer and contribute to those who will fight for a government that will work for all of us, and not just the 1 percent and wealthy campaign contributors in this country.

This blog originally appeared at Working Life on December 22, 2020. Reprinted with permission.

About the Author: Jonathan Tasini is a political / organizing / economic strategist. President of the Economic Future Group, a consultancy that has worked in a couple of dozen countries on five continents over the past 20 years.


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‘We’re already too late’: Unemployment lifeline to lapse even with an aid deal

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U.S. lawmakers are struggling to hammer out another economic relief package before Congress adjourns next week. But for millions of Americans, the deadline may have already passed.

Even if Congress reaches a deal, some 12 million unemployed people could see their benefits lapse after Christmas. Worker advocates say it could take weeks for the jobless aid programs to get back online as lags in programming for outdated state systems cause delays in relief checks.

“We’re already too late,” said Michele Evermore, an unemployment insurance expert at the National Employment Law Project. From the time Congress passes an extension of unemployment aid, she said, many states wouldn’t be up and running for “three weeks or four weeks” at the fastest.

That would not only fuel the desperation of unemployed households but could also cut into consumer spending as the coronavirus resurges across the nation, jeopardizing the economic recovery just as Joe Biden’s presidential administration gets under way.

Several federal unemployment programs are set to run out the day after Christmas, cutting millions of Americans off from their financial lifelines if Congress doesn’t pass another relief package.

What’s worse for the unemployed, the nonprofits and food banks that many have been turning to have themselves been bleeding workers under the crushing demand during the pandemic.

A bipartisan group of lawmakers is circulating a proposal that would extend two major programs — Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation — through the spring. Both are slated to expire Dec. 31, with final payments going out Dec. 26 — which is less than a week before a federal moratorium on evictions is also set to expire.

The provisions are the only source of aid for those who have exhausted state benefits, as well as for gig workers, the self-employed and others hit hardest by the pandemic.

Anything Congress includes in the next round of aid that is even modestly different from the programs implemented earlier this year “is going to take time to reprogram,” said Elizabeth Pancotti, a policy adviser at the pro-worker Employ America. “In some states that might be a week or two; in other states, we’ve seen it [take] five, six, seven weeks.”


“Anything that’s just the slightest bit different is a nightmare to reprogram,” she added.

A spokesperson for the Illinois Department of Employment Security agreed that any delays depend on how the congressional programs are structured, adding that new programs — and often extensions of existing ones — “take time to stand up.”

Angela Delli-Santi, a spokesperson for the New Jersey Department of Labor and Workforce Development, said the state anticipates “no lapse” in providing benefits to people, although she also said it hinges on what the final language is on restarting the programs.

The bipartisan congressional proposal would provide the jobless with an extra $300 a week in their benefit checks — which would require state agencies to restart a program that expired at the end of July. The Federal Pandemic Unemployment Compensation program originally offered the unemployed an extra $600 a week, but Congress failed to extend it when it lapsed July 31.

Should Congress pass an extension of the programs, states would then have to wait for the U.S. Labor Department to issue guidance before sending out payments — which could be hard to turn around quickly during the holidays.

At the same time, the need for more aid is growing. About 1.3 million applications for unemployment benefits came in last week in both regular state programs and the federal PUA program, the Labor Department reported Thursday — the highest number of new claims since September.

New applications in state unemployment programs alone saw a more than a 30 percent jump in the week following the Thanksgiving holiday.

Without the cash, many unemployed will have no choice but to turn to food banks and other nonprofits. Miles-long lines of people have been overwhelming food banks, with demand rising by about 60 percent from last year, according to the nonprofit Feeding America.


Yet since the outset of the pandemic, nonprofits have shed nearly 1 million of their own workers: Not only has that created a greater need for services, but it has also driven up costs due to the need to purchase protective gear and execute other measures to keep volunteers safe.

“We’re already seeing nonprofits closing their doors — and we’re the backup for people,” said Rick Cohen, chief communications officer for the National Council of Nonprofits. “We are where they go when the government programs run out or when they’re not enough. And if we’re not there. Where do people turn?”

Nonprofits “weren’t designed to hold up this many people for this long,” NELP’s Evermore said. “These are all finite resources.”

“Unemployment insurance is the program that we created to deal with this particular problem,” she went on. “And without it, we can’t.”

Jessica Oyanagi, 40, was running a photography business out of Maui when the pandemic hit and she lost most of her customers. Because her photographers were independent contractors rather than employees, she was only eligible for unemployment insurance under PUA.

The program affords her about $1,000 a month, which is still not enough to make ends meet: She and her husband were forced to move in with her parents, and they rely in part on food stamps to keep themselves and their daughter fed.

It has been “the most stressful year of my entire life, I’m not going to lie,” Oyanagi said. “Every area of our life has been just completely turned upside down.”

Oyanagi isn’t alone: In mid-November, more than 27 million individuals told the Census Bureau they were relying on unemployment benefits to meet their spending needs. More than 75 million said they expected to lose their employment income in the next four weeks. And nearly 17 million people reported using SNAP benefits — better known as food stamps — to get by.

“They’re already behind on rent, they’re already behind on bills, they’re already struggling to pay utilities, and now they’re about to lose the little bit of income they still have,” said Julia Simon-Mishel, who leads the unemployment compensation practice at Philadelphia Legal Assistance, which provides services to low-income families.

The end of the eviction moratorium that the Trump administration imposed in September also poses a threat.

About 11.4 million renter households will owe an average of just over $6,000 in back rent, utilities and late fees totaling some $70 billion come January, according to Moody’s Analytics.

“Eviction notices are piling up on sheriffs’ desks across the country to be executed if the moratorium is not extended or renters don’t receive help with the back rent they owe,” the firm said in a statement. “Mass evictions in the dead of winter and during a raging pandemic will be unbearable for those losing their homes as well as being a blow to the already-fragile collective psyche.”

Anneliese Monkman, 28, who lost her job at a hotel in the spring and has struggled to find demand for her fledgling wedding planning business, receives about $355 a week in unemployment — all of which will disappear if Congress does not extend the emergency unemployment programs.

“We’re kind of choosing what bills we’re going to pay,” she said.

Workers are likely to dig themselves deeper into debt to weather the lapse in income — a spiral that economists warn could worsen the recession. Last resorts like payday loans or credit cards could serve to dig low-income workers into an even deeper hole, exacerbating wealth inequity.

“They only have high interest options available to them,” Evermore said. “Whenever they do get their pittance for [unemployment insurance] turned back on again … it’s going to go to paying back the debt that they’ve accrued.”

Eleanore Fernandez, 48, was working as an executive assistant at a Silicon Valley startup when the pandemic hit and she lost her job. She makes about $900 a month under one of the federal programs set to expire at the end of the month.

She said if her benefits lapse, she will need to consider taking out a loan on top of the money she already owes her landlord, who has been allowing her to pay 25 percent of her rent.

“I’ve gone through my savings almost now,” she said. “So if [the aid] runs out, then I don’t know.”

This blog originally appeared at Politico on December 11, 2020. Reprinted with permission.

About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter.

About the Author: Eleanor Mueller is a legislative reporter for POLITICO Pro, covering policy passing through Congress. She also authors Day Ahead, POLITICO Pro’s daily newsletter rounding up Capitol Hill goings-on.

About the Author: Kellie Mejdrich is a reporter for POLITICO Pro Financial Services.

About the Author: Katherine Landergan covers the state budget, tax policy and labor issues for POLITICO New Jersey.


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Three things unemployed people should know right now, this week in the war on workers

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Unemployment claims just hit their highest level in months, Republicans are still refusing to negotiate a stimulus package that does half what the country needs, and people who have been unemployed for months are increasingly desperate. Only the government can truly help unemployed people, but the National Employment Law Project’s Michele Evermore has three pieces of advice for unemployed workers in the coming weeks. It’s not cheerful news, but it’s worth knowing.

First, “If you have received a [Pandemic Unemployment Assistance] overpayment notice, you are not alone.” But you do have the right to appeal. Second, know that both PUA and Pandemic Emergency Unemployment Compensation are slated to end on December 26 (Merry Christmas and a happy New Year, everyone!), and if Congress extends them at the last minute, there will likely still be a lapse.

”The takeaway is that, if Congress extends CARES Act benefits, you may have to wait through part of January to get access to benefits that stopped at the end of December,” Evermore writes. “And again, if Congress passes relief, it has historically been structured so that your benefits are restored beginning the date of enactment. So there shouldn’t be a gap in your eligibility if that happens, just a gap in when you get paid.”

Finally, no matter what happens: organize, organize, organize. Make sure this kind of congressional contempt for millions of struggling people doesn’t happen again.

This blog originally appeared at Daily Kos on December 12, 2020. Reprinted with permission.

About the Author: Laura Clawson has been a contributing editor since December 2006. Clawson has been full-time staff since 2011, and is currently assistant managing editor at the Daily Kos.


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Economy hurting after Congress fails to act on stimulus

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Just weeks after Washington lawmakers allowed a $600-a-week boost in payments for millions of unemployed workers to expire, the economy is already starting to feel the pain.

The number of workers lining up for jobless aid has been rising. The retail and delivery sectors, which especially benefited from laid-off Americans spending the extra cash, have cut back on hiring. Walmart, the nation’s biggest retailer, reported record profits in the second quarter thanks to government aid to consumers but now says sales growth is slowing.

As lawmakers dig in their heels over how much cash to spend to prop up the pandemic-battered economy, the cut in unemployment aid and the expiration of a program that provided more than $500 billion in loans to small businesses to keep workers on the job are threatening to drag on the recovery. That’s likely to ratchet up pressure on Congress and the White House to come to a deal on a new economic relief package.

Unemployment insurance added about $25 billion a week to the economy during the four months the additional aid was in place, and now since the expiration of the extra benefit, it’s running closer to $10 billion, former U.S. Treasury economist Ernie Tedeschi said. That’s going to have “devastating individual implications for the families that receive that payment and also going to have economic implications for America as a whole,” he said.

“When you have $60 billion less going to families,” Tedeschi added, “that means that there’s going to be something close to that less in spending.”

With less money to spend on groceries, gas and other goods, the lapse of federal pandemic aid has aggravated the labor market outlook. Businesses acutely affected by consumption have started hiring fewer workers, according to Nick Bunker, economic research director at Indeed Hiring Lab. Listings for jobs in beauty and wellness seeking workers like hairdressers, nail technicians, fitness instructors and cosmetologists are falling, as are those for retailing and delivery drivers and truckers.

The number of job listings posted in the week ending Aug. 14 were 20 percent lower than they were at this time in 2019 — and the first drop the website has seen since late April, according to Indeed.

“Really the last few weeks we’ve started to see a significant slowdown in the trend in job postings,” Bunker said.

Hiring, hours worked and the number of employees working over the last six weeks — a period that began before the extra unemployment aid ended on July 31 — has slowed down or flatlined, according to data from workforce management platforms Kronos and Homebase.

At the same time, the number of jobless claims rose to 1.1 million in the week ending Aug. 15, halting several weeks of decline and suggesting that large numbers of people are still being pushed out of work due to the pandemic.

Economists say the July-to-August plateau is especially concerning because jobs usually pick up this time of year due to increased demand in the summer season.

“We’re expecting the next few months to be — even barring a significant recurrence of some Covid hot spots — a very slow recovery,” said David Gilbertson, vice president at Kronos.

Republican lawmakers have argued that the $600-a-week boost allowed many laid-off workers to make more money at home than they earned at their previous jobs. That, they said, was creating a disincentive for them to return to work and slowing down the economic recovery.

But the lack of a pickup in business activity is “a warning sign,” said Ray Sandza, vice president of data and analytics at Homebase. “Any expectation that removing [unemployment insurance] benefits was going to suddenly fill a bunch of jobs was, predictably, misplaced,” he added in an email. “There just aren’t enough jobs to go around right now; it’s not a supply issue.”

According to the Real-Time Population Survey, which was created by researchers at Arizona State University and Virginia Commonwealth University, the unemployment rate was 15.5 percent in the week ending Aug. 15.

“There was a really rapid recovery going on in May and June, and then since June things still have been modestly getting better but just at a much slower pace,” said Adam Blandin, assistant professor of economics at VCU, who helps develop the real-time survey. “And between the new virus cases and the changes in policy … the million dollar question is are we going to stay at something above 10 percent unemployment, for a long period, or is it going to continue to go down like it did early in the summer?”

Without another stimulus deal from Congress and less money for Americans to spend, companies are unlikely to risk expanding their workforce, meaning fewer jobs available for laid-off workers to fill and tamer growth in the economy.

“Consumers are not spending money, at least in some sectors,” Gilbertson of Kronos added. “The face of our economy is changing.”

Until businesses are confident that Americans will start spending more, “they’re probably not going to be expanding their hiring,” he said.

The stock market’s robust performance isn’t doing much to spur lawmakers into agreeing to provide more relief. While fears of a slowdown led shares to plummet in March — and motivated Congress to take sweeping action to rescue the economy — the precarious state of the nation’s workforce now hasn’t generated a similar reaction.

While jobless Americans are facing dire economic conditions, Wall Street has gained back all the losses it suffered early on in the pandemic. The S&P 500 has been hitting record highs.

Even a slide in share prices at the opening bell Thursday, in response to newly rising unemployment claims, was short-lived as prices recovered by midday.

The stock market also isn’t representative of most Americans, especially the low-wage workers hit hardest by the recession. While about half of American families own stocks, the vast majority of the value of shares is held by wealthier investors.

The stalemate in Washington over how much additional Covid-19 aid the federal government will offer to help struggling businesses and Americans has also clouded the outlook for large companies, many of which have done considerably well during the pandemic.

When Walmart touted its second-quarter profits during its quarterly earnings call on Aug. 18, it cited spending “aided by government stimulus.” But Brett Biggs, the chief financial officer and executive vice president, said sales began to revert back to normal toward the end of the quarter when $1,200 stimulus checks the government had doled out to millions of Americans ran out.

“There’s just a lot of uncertainty right now and so much variance in how customers are feeling about their situation,” said Douglas McMillon, Walmart’s president and CEO, during the call.

Target, bracing for an additional drop in expected fall demand because of schools switching to remote learning, has offered to extend its back-to-school season.

“It’s a very challenging environment for us to provide guidance,” Brian Cornell, the chairman and CEO of Target, said during the company’s earnings call Wednesday. “We’ve got the pandemic in front of us. We’ve got uncertainty about back to school, back to college, the state of the economy.”

Now that laid-off workers are no longer receiving the extra $600-per-week unemployment payment, Behnaz Mansouri of the Unemployment Law Project, which provides services to laid-off workers in Washington state, says her clients are facing more difficult choices than they encountered at the beginning of the pandemic.

The year “has been made bearable by this patchwork of financial assistance,” Mansouri said. “And now without it, I fear, it’s going to become unbearable.”

“I’m hearing a lot of people struggling to assess their living situations over the next couple of months,” she added. “Do they potentially start looking for jobs, even if they’re in a high risk category or live with someone who’s in a higher risk category?”

Kellie Mejdrich contributed to this report.

This blog originally appeared at Politico on August 24, 2020. Reprinted with permission.

About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter.


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A $6.5 Trillion Stimulus Plan Now! Hong Kong Labor Activists Under the Gun

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Let’s go really big! I outline a $6.5 trillion stimulus—more than double what the Democrats in the House passed—because that’s what the people need over the next year: $1.3 trillion in wage guarantees; $715 billion for state and local governments; $600 billion for a “Pandemic Medicare For All”; $1.5 trillion to cancel all student debt; $200 billion for a rent and mortgage freeze…and a lot more. Fight me on the specifics—but let’s expand the debate and the way people think about what is possible, what is needed and what should be done.

Just a few days ago, China imposed a new National Security Law which is aimed at shutting down the mass protests that have consumed Hong Kong for more than a year. In the crosshairs especially are union activists who have been signing up people to dozens of new unions which doesn’t thrill China’s leaders who manage the linchpin for the global corporate supply chain. Cathy Feingold, the director of international affairs for the AFL-CIO and deputy president of the International Trade Union Confederation, joins me with a look at the pressures facing unions in Hong Kong.

This blog originally appeared at Working Life on July 8, 2020. Reprinted with permission.

About the Author: Jonathan Tasini is a political / organizing / economic strategist. President of the Economic Future Group, a consultancy that has worked in a couple of dozen countries on five continents over the past 20 years.


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Chicago Window Workers Who Occupied Their Factory in 2008 Win New Bankruptcy Payout

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kari-lydersenSeven years after Republic Windows & Doors workers occupied a recently-shuttered factory in Chicago, making international news, and three years after they opened their own window company, they are receiving a $295,000 payout in bankruptcy court that is both a symbolic and pragmatic victory.

When a company goes bankrupt, workers are usually at the end of the line to get paid, as they are considered “unsecured creditors” behind various secured creditors who are owed money. That means workers often never get money they are owed.

But the Republic Windows workers have broken the mold in many ways, starting when they occupied the factory on Goose Island in the Chicago River, receiving massive community and political support and convincing Bank of America and JP Morgan Chase to hand over the severance and vacation pay due them.

They became a poster child of the American Recovery and Reinvestment Act (or the “stimulus”) after the company was bought by a California-based maker of highly energy efficient products. Then they occupied the factory again when that owner threatened to close it. Finally in spring 2013 they opened their own factory, New Era Windows.

In January 2009, not long after the occupation, the United Electrical Workers (UE) union, which represented Republic workers, filed a complaint with the National Labor Relations Board charging that the company violated the union contract by closing abruptly without negotiating over the closure terms. Two years later, the board ruled in favor of the workers and decided they were due two weeks’ wages, the estimated amount of time that bargaining over a closure would have taken.

The company was in bankruptcy proceedings by then, however, and it wasn’t until this week that the bankruptcy court ordered the release of the funds. The NLRB will distribute the money to individual workers.

A release from the NLRB this week noted:

The Board found that the employer violated the National Labor Relations Act when they closed their Goose Island facility and moved operations to an alter ego operation in Iowa. However, ongoing bankruptcy procedures made full or partial compliance with the order unlikely until a successful suit against the employer’s insurer made additional assets available for the repayment of debts.

The board continued that: “Bankruptcy proceedings often prevent compliance with Board-ordered remedies as employer’s assets are liquidated through Chapter 7 processes. While the employees did not receive full back pay, obtaining partial compliance in this case is a victory for workers who have been waiting for a remedy since 2008.”

“Some people feel like it’s not enough, but it’s symbolic,” said Armando Robles, one of the New Era worker-owners and a leader of the occupation and ensuing efforts. “It’s a huge victory.”

UE organizer Leah Fried noted that the payout is thanks to “the constant haranguing we had do to. We had to wait until everyone else came out of the woodwork, but the fact we kept pressuring the court” paid off.

“It’s great that seven years later, [the workers are] still winning money,” she says.

The former Republic Windows CEO, Richard Gillman, was sentenced to four years in prison for fraud charges related to the closing of the factory and the purchase of another window factory in Iowa. He was released after serving significantly less time than the sentence.

New Era has been growing, with 14 worker-owners and four new hires, Robles said. This is the slow season, however, when few people are ordering windows. Robles said the bankruptcy payment should mean about $1,200, helping him pay rent and bills until New Era business picks up in the spring.

“It hasn’t been easy, obviously,” said Fried. “But they’ve shown you can run a company without bosses, and do well.”

This blog originally appeared in inthesetimes.com on January 25, 2016.  Reprinted with permission.

Kari Lydersen, an In These Times contributing editor, is a Chicago-based journalist and instructor who currently works at Northwestern University. Her work has appeared in the New York Times, the Washington Post, the Chicago Reader and The Progressive, among other publications. Her most recent book is Mayor 1%: Rahm Emanuel and the Rise of Chicago’s 99 Percent. She is also the co-author of Shoot an Iraqi: Art, Life and Resistance Under the Gunand the author of Revolt on Goose Island: The Chicago Factory Takeover, and What it Says About the Economic Crisis.Look for an updated reissue of Revolt on Goose Island in 2014. In 2011, she was awarded a Studs Terkel Community Media Award for her work.


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Full Employment Is More Than Possible. It Is Essential.

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Dave JohnsonProgressives have not only been able to beat back the D.C.-elite effort to cut Social Security, we put the idea of expanding Social Security on the table instead. We pushed LGBT rights and gay marriage and have won significant victories. Sunday’s Climate March will force climate onto the map.

We got the discussion of income inequality going. We have achieved minimum wage increases and paid sick days in several cities and states. The National Labor Relations Board is functioning and we even saw labor-movement gains in the South this week. We have held back (so far) the drumbeat for big cuts in corporate taxes they’re calling “tax reform.”

Now it’s time to put our demand for full employment policies on the table. And guess what – it’s a great way to win elections!

What would it mean in people’s lives if there were more job openings than people? Right now people suffer terrible job fear that forces them to accept pay cuts, benefit cuts, extra hours and other things that increase profits for the giant corporations.

Think about the huge change in the mood and structure of the country if employers had to fight to get employees. If your boss couldn’t find the people needed to do the work and knew that you had three job offers, you might be getting a raise instead of a pay cut – and you would know that, too.

It has been a while, but imagine the situation in our economy if working people had the upper hand. This is what full employment would mean. And it is possible to achieve full employment – but only if We the People decide to just go ahead and pursue this, through our government.

How To Get To Full Employment

There are so many things we could be doing to bring about full employment. For example, this is the record of the 2009 “stimulus.” We were losing more than 800,000 jobs a month in the wake of the 2008 recession, then because of “government spending” we were gaining 100,000-250,000 jobs a month. Look at this chart and think, “No wonder Republicans don’t want more government spending to create jobs.”

Monthly_0208_0514[1]
This blog originally appeared in Campaign for America’s Future (Ourfuture.org) on September 19, 2014. Reprinted with permission.  http://ourfuture.org/20140919/full-employment-is-more-than-possible-it-is-essential

About the Author: Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

 


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Assert Yourself, America; Don’t be an Illegal Trade Victim

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Leo GerardLong-suffering victim is hardly the American image. Paul Revere, Mother Jones, John Glenn, Martin Luther King Jr. — those are American icons. Bold, wry, justice-seeking.

So how is it that America finds herself in the position of schoolyard patsy, woe-is-me casualty of China’s illegal trade practices that are destroying U.S. renewable energy manufacturing and foreclosing an energy-independent future?

Come on, America. Show some of that confident pioneer spirit. Stand up for yourself. Tell China that America isn’t going to hand over its lunch money anymore; international trade law will be enforced now.

That’s the demand the United Steelworkers (USW) union made this week when it filed a 5,800-page suit detailing how China violates a wide variety of World Trade Organization (WTO) obligations.

The case, now in the hands of the U.S. Trade Representative, shows how China uses illegal land grants, prohibited low-interest loans and other outlawed measures to pump up its renewable energy industries and facilitate export of those products at artificially low prices to places like the United States and Europe.

The U.S. aids renewable energy industries, like solar cell and wind turbine manufacturers, but no where near the extent that China does. And the American aid lawfully goes to renewable manufacturers that produce for domestic consumption. China, by contrast, illegally subsidizes industries that export, a strategy that kills off competition.

The USW recognizes and appreciates that trade with China has lifted millions there out of poverty. But truly fair trade would benefit workers in both China and the United States. And that is what the USW is demanding.

The USW is far from alone in accusing China of violations. New York Times reporter Keith Bradsher described them in a story Sept. 8, titled “On Clean Energy, China Skirts Rules.” It ends with this quote from Zhao Feng, general manger of Hunan Sunzone Optoelectronics, a two-year-old solar panel manufacturer that exports nearly 95 percent of its products to Europe and is opening offices in three U.S. cities to push into the American market:

“Who wins this clean energy race really depends on how much support the government gives.”

The U.S. isn’t providing support that violates WTO regulations. China is. And it’s hundreds of billions — $216 billion from China’s stimulus package, another $184 billion to be spent through 2020, $172 million in research and development over the past four years.

Bradsher’s story details illegal aid given Sunzone and says that it’s common, not exceptional. It includes China turning over land to Sunzone for a third of the market price and government-controlled banks granting Sunzone low-interest loans that the provincial government helps Sunzone repay.

In addition, the USW suit notes that China, which accounts for 93 percent of the world’s production of so-called rare earth materials like dysprosium and terbium essential for green energy technology, has severely restricted their export. That practice, illegal under WTO rules, forces some foreign companies to move manufacturing to China to get access.

And when corporations move, China routinely – and illegally — mandates they transfer technology to Chinese partners, which often means U.S.-tax-dollar-supported research and development benefits China.

That is one reason China rose to first in the world in clean energy so quickly. China now leads globally in producing solar panels. It doubled its wind power capacity in one year – 2009. Worldwide, Chinese manufacturers supply at least half of all hydropower projects and fabricate 75 percent of all compact fluorescent light bulbs.

Meanwhile, here in the United States, BP shut down its solar panel manufacturing plant in Maryland this year and Evergreen Solar of Marlboro, Mass., plans to close its American plant, eliminating 300 U.S. jobs. Both are moving manufacturing to China.

Germany’s Solar World still manufactures in Europe and the United States, and its chief executive, Frank A. Asbeck, told Bradsher the German solar industry association is investigating whether to file a suit of its own to try to stop China’s illegal practices:

“China is cordoning off its own solar market to fend off international competition while arming its industry with a bottomless pile of subsidies and boundless lines of credit.”

The Times story also says China’s “aggressive government policies” are designed to ensure “Chinese energy security.”

China’s illegal aggression to secure its energy independence and dominate world production of green technology threatens the energy security of the United States.

America turned to renewables not just to diminish climate change but also to reduce dependence on foreign oil, an addiction that has entangled the U.S. in costly and bloody wars.

If the United States can’t build its own renewable energy products, it will forfeit the next generation high technology industry and good manufacturing jobs, and it will remain dangerously beholden to foreign nations for energy.

China agreed to follow international regulations when it joined the World Trade Organization. This pledge was crucial because China’s economy is government-controlled, very different from the free market economies of the United States and most Western nations.

Faced with blatant rule-flouting that has cost USW members their jobs and threatens to cost their children high-technology manufacturing of the future, the USW is demanding the American government put a stop to it.

That is how a true American acts. Americans have a sense of justice. They follow the rules and expect trading partners to do the same. When they don’t, Americans do something about it.


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