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Jobs Report: Despite Job Growth, as Benefit Cliff Approaches, Renewing and Reforming Unemployment Insurance Is an Urgent Racial Justice Matter

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Home - National Employment Law Project

This month’s jobs report released today by the Bureau of Labor Statistics, continues to tell the story of an uneven labor market recovery rife with longstanding inequities.  In this context, the National Employment Law Project (NELP) is dedicated to transforming the system and paving the way for a more just economy that meets the need of those most impacted today and historically: Black workers and in particular Black women, who through racist policies, have been segregated into systemically low-paying industries, making it difficult to build up savings over time and be economically stable.  

 According to today’s BLS report: 

  • The economy added 943,000 jobs in July, and the unemployment rate dipped 0.5 percentage point to 5.4 percent.  
  • The jobless rates for teenagers (9.6 percent) and Asians (5.3percent) showed little change over the month. 
  • The unemployment rates declined in July for adult men (5.4 percent), adult women (5.0 percent), and white people (4.8 percent).  
  • A marginal 1 percentage point unemployment rate decline for Black and .8 percent for Latinx workers, continues to show a stark disparity. The still-too-high numbers 8.2 percent for Black workers, and 6.6 percent for Latinx workers, point to high unemployment prior to the pandemic, and the beginning of yet another an unjust economic recovery cycle unless major racial equity interventions are made.  
  • More Black workers were driven out of the workforce this month. This drop can be attributed to longstanding systemic racism and the absence of systemic support in integrating Black job seekers back into the labor market, which can result in Black workers being considered by BLS to be disconnected from the labor force. (1)
  • Today’s job report reveals one of the largest job gains since last August, but we are still far below pre-pandemic levels with 8.7 million people still unemployed and the economy still down 5.7 million jobs.   

“An uneven recovery is not a just recovery because the UI system was grafted onto the structurally racist foundation that undergirded much of the New Deal programs. Our solutions on unemployment must be structural and transformative, intentionally bringing in underpaid Black and Latinx workers, permanently and not just on a temporary basis in times of crisis,” said Rebecca Dixon, executive director of the National Employment Law Project. 

Today’s job report continues to demonstrate that as NELP, workers, and our partners have pointed out, unemployment insurance programs have been a lifeline throughout this crisis in supporting people to meet basic needs while searching for work and in stimulating the nation’s economic recovery by supporting consumer spending.   

As vaccine rates lag, COVID-19 variants rise, and the job market steadily improves, the looming benefit shutoff on Labor Day, September 6th, leaves an estimated 7.5 million workers without support and leaves millions of others at the mercy of an uneven patchwork of state coverage. Notably, in July, 1.6 million workers were prevented from looking for work due to the pandemic.  

With the looming expiration of successful pandemic unemployment programs and as Congress approaches the reconciliation process and infrastructure bill, Congressmembers must remember that investing in workers is a vital infrastructure investment. NELP, workers, and allies are calling on Congress to enact bold, structural UI reform beginning with expanded coverage, minimum benefit duration that aligns with the needs of every worker, and increased benefit amounts that are in line with basic living expenses.   

Workers need bold reform that will lay the groundwork for an equitable unemployment insurance system and labor market making it possible for all workers and communities to thrive.   

ENDNOTES

  1. According to Table A–2, the Black employment to population ratio declined by .1 percentage point to 55.8 and the labor force participation rate declined from 61.6 to 60.8. 

This post originally appeared at NELP on August 7, 2021. Reprinted with permission.

About the Author: The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting underpaid and unemployed workers.


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NEW REPORT PROPOSES CRITICAL UNEMPLOYMENT INSURANCE POLICY REFORMS

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NATIONAL DAY OF ACTION BEING HELD IN WASHINGTON D.C. AND SIX OTHER CITIES

As 25 states cut pandemic unemployment benefits prematurely, a new report from a coalition of advocacy groups and think tanks, in partnership with workers who have experienced unemployment during COVID-19, proposes a stronger federal role in the unemployment insurance (UI) system and a slate of permanent reforms to unemployment benefits that will sustain families and the economy.

The report is a joint project of Center for American Progress, Center for Popular Democracy, Economic Policy Institute, Groundwork Collaborative, National Employment Law Project, National Women’s Law Center, and Washington Center for Equitable Growth.

“A successful unemployment system can be the centerpiece of economic recovery, particularly for those communities, such as workers of color, who bear the brunt of downturns and are left behind in the wake of recessions,” said Heidi Shierholz, Director of Policy and Senior Economist at the Economic Policy Institute, and contributor to the report. “In addition to sustaining working families through jobless spells, swift and adequate unemployment benefits are good for the broader economy because they allow workers to search for a job that is a good match to their needs, instead of being so desperate that they have to take the first job that comes along no matter how bad it is for them.”

The report includes key insights from workers who experienced unemployment during the pandemic, including Sharon Shelton Corpening, a media gig worker in Georgia who has supported herself and her mother on Pandemic Unemployment Assistance.

“COVID unemployed workers like me are fighting to build a UI system that supports us until we can find good jobs that allow us to live in dignity and security. Next week, my financial lifeline will be yanked from under me because states like Georgia have too much power to reduce, restrict, or flat out deny benefits that are literally keeping us alive,” said Corpening, an Unemployed Action leader. “Unemployed people—especially Black people in the South who face systemic racism even as jobs return—want and need to work. But this current unstable unemployment insurance system hasn’t helped us get on our feet if we can’t even count on UI benefits. We need federal protections and we need them now.”

The report’s proposed structural changes include:

  • Guaranteeing universal minimum standards for benefits eligibility, duration, and levels, with states free to enact more expansive benefits;
  • Reforming financing of UI to eliminate incentives for states and employers to exclude workers and reduce benefits;
  • Updating UI eligibility to match the modern workforce and guarantee benefits to everyone looking for work but still jobless through no fault of their own;
  • Expanding UI benefit duration to provide longer protection during normal times and use effective measures of economic conditions to automatically extend and sustain benefits during downturns; and
  • Increasing UI benefits to levels working families can survive on.

“This report lays out the first steps toward transforming our unemployment insurance system, with racial equity concerns front and center. Black, Brown, and Indigenous workers in particular have borne the brunt of the pandemic and its unemployment crisis. They continue to grapple every day with workplace health and safety concerns, underpaid work, eroded transportation infrastructure, and lack of affordable child care options. The urgently needed unemployment reforms detailed in our report will be a win for everyone in our nation,” said Rebecca Dixon, Executive Director at the National Employment Law Project.

The report release coincides with a national day of action from the Center for Popular Democracy calling on Congress to act quickly and boldly to enact transformative changes for an equitable economy, including overhauling the UI system. Unemployed Action leaders from around the country will join excluded immigrant workers and others in Washington D.C. for a 5,000-person march to the U.S. Capitol. Workers will also rally in Las Vegas, Los Angeles, Atlanta, New Orleans, Austin, and Pittsfield MA.

As the report explains, when state UI structures became overwhelmed during the onset of the COVID-19 recession, federal policymakers realized that benefit levels were too low and not available to enough workers. In part to offer stimulus to a sharply contracting economy, the federal government provided unemployed workers claiming standard UI benefits with a supplemental $600 per week in additional benefits, as well as extended the duration of benefits and provided benefits to some groups of workers left out of the regular UI system, such as the self-employed and temporary workers.

But even those emergency programs have proven inadequate, with already overstretched state systems failing to get out emergency benefits in a timely manner. Half of the states are now choosing to cut off their residents’ access to these programs early, causing extraordinary harm to vulnerable families and impeding the economic recovery. These attacks on critical emergency benefits are the most vivid and recent manifestation of recurring dysfunction in the UI system: The federal government has ceded so much control to states that it has failed to equitably protect working people.

“Unemployment benefits are critical to keep us going as we continue to look for work, but our broken system keeps throwing obstacles in our paths,” said Nate Claus, an Unemployed Action leader and theater worker in New York. “Federal protections are desperately needed to strengthen unemployment insurance.”

This blog originally appeared at NELP on June 24, 2021. Reprinted with permission.

About the Author: NELP fights for policies to create good jobs, expand access to work, and strengthen protections and support for low-wage workers and the unemployed. 


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One Way to Boost Workers and the Labor Movement? Give Unions Power Over Unemployment Insurance.

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Francisco Díez - Worker Justice Policy Advocate - Center for Popular  Democracy | LinkedIn

A reform from Belgium in the early 1900s would both increase unemployment insurance benefits and decrease the cost of labor organizing. It’s time for the U.S. to embrace it.

Despite keeping tens of millions of Americans afloat during the pandemic, expanded unemployment insurance (UI) only reached 41% of unemployed workers according to Professor Eliza Forsythe of the University of Illinois’ School of Labor and Employment Relations, and even among those who did receive it, many saw frequent delays and dangerous pauses in benefits. These issues underline the importance of addressing the program’s systemic flaws. 

“It took five weeks to get the next round of extended benefits. I was so behind on rent and basic bills, I had to pay late fees that accrued because it took so long. Now I can barely buy food,” said Sharon Corpening, an unemployed worker in Georgia and member of Unemployed Action, a grassroots campaign run through The Center for Popular Democracy (where I work). 

As pressure builds to reform the program for the first time in decades, one policy change could both dramatically improve benefit access for workers like Corpening and give a much-needed boost to the labor movement: Let unions help run the UI system. 

Unemployment insurance, if administered, managed or distributed by unions, could unleash a wave of union growth and dramatically improve access to benefits for millions of workers. Commonly called the ?“Ghent” system, after the city in Belgium where it was first developed as a form of union-led mutual aid in the early 1900s, these policies increase the expected benefits of unemployment insurance for workers and decrease the cost of organizing. The pandemic exposed the cracks in the U.S. unemployment system?—?and how desperately we need bold, new ideas like this. 

At least two legislative proposals to expand access to UI?—?one state-level effort in Maine and one coming out of the House of Representatives’ Ways and Means Committee?—?would, if enacted, begin to bring organized labor into the system and plant the seeds of an American Ghent system. 

UI currently leaves many workers uncovered, such as undocumented immigrants, unpaid caretakers and graduating students (re)entering the workforce. Most states’ weekly benefits are too low and the benefit periods too short to protect workers from crisis, whether it’s a financial downturn or a pandemic. The average benefit amount replaces about 40% of pre-layoff wages and some states like Florida provide just 12 weeks. Plus, benefits currently depend on ?“experience rating”: a funding mechanism that rewards employers who challenge employee unemployment claims with lower taxes. 

Meanwhile, the state-federal structure helps perpetuate racial disparities. States with higher relative Black populations have less generous benefits and more barriers to access those benefits, even though Black workers suffer twice the unemployment rate of their white counterparts. 

Those barriers, like limited benefits for low-wage workers and racist fraud detection systems, contribute to costly delays for countless workers of color, often leading to food insecurity and housing instability. 

The CARES Act and subsequent relief packages patched up some of the biggest holes in UI, supplementing and extending inadequate state benefit amounts, and covering independent contractors. Still, these patches did not address access limitations or the fundamental flaws of UI’s design. 

To increase access to unemployment benefits and build worker power, future reforms should include a benefits navigator program and government subsidized, union-led wage replacement funds. The federal government could implement these programs or states could lead on their own. Together, these programs would help establish an American Ghent system. 

The impacts of these programs?—?both the benefits navigators and the union-led funds?—?could transform labor relations in America. Union density in countries with Ghent programs, such as Finland and Belgium, hovers 20 percentage points higher on average above those without them. As Dylan Matthews writes at Vox, the Ghent system ?“is a key part of how Sweden, Denmark, Finland, and Belgium have achieved the highest union membership rates in the developed world.”

Here’s what it would look like to receive unemployment benefits under a navigator system: If you were a non-union worker, you could head to an office led by a coalition of unions and community organizations where you would talk to a navigator about your case. They would help you file the paperwork, ensure you quickly received your benefits and help advocate on your behalf. They might connect you to job opportunities and provide support for you as you reentered employment. 

This may sound familiar. The Affordable Care Act set up a benefits navigator program that successfully increased health insurance enrollment. In 2015, the navigators helped increase enrollment from 84.9% to 93.1% among low-income Americans, with larger gains among low-income Blacks and Latinos.

In a UI benefits navigator program, federal or state governments would provide grants to unions and community organizations to hire navigators in order to help unemployed workers receive benefits. As a result, unions would meet and interact with workers right before they enter a new workplace, while helping secure them the benefits they deserve. In the process, it would help tie organized labor to non-unionized unemployed workers. 

Navigators can boost workers’ benefits by expanding access to UI. Union workers are more than twice as likely to apply and receive benefits than non-union workers. Moreover, gaps in unemployment benefit access across racial groups drop from 32 percent to 9 percent while disparities across education levels largely disappear among union workers. Navigator programs would help expand these advantages to nonunion workers as well. 

More expansive positive effects would come from instituting government-backed, union-led wage replacement funds in addition to a navigator program. 

Under a full Ghent system, here’s how it would work: If you’re a non-union worker, you would be provided the basics of the navigator system described above, but would also get an entirely new set of benefits. For example, the union could provide a benefit to supplement your regular government UI benefit so that your total benefits could equal 90%, for instance, of your pre-layoff earnings. Plus, the union office could connect you to job retraining programs to help keep your skills sharp or even shift your career. If you were a union member, you could pay to keep your membership and you might receive extra benefits or services. For example, your wage replacement benefit might be slightly higher if you were a union member. 

In the United States, some workplaces organized by the United Auto Workers have generous supplemental unemployment benefits that members pay into and use when they become unemployed so that their total UI benefits better match their pre-layoff wages. A Ghent system would make similar programs universal, and provide greater governmental support. In Denmark, for example, participating in union-run UI remains technically optional, but about 85% of unemployed workers receive benefits, which is among the highest in industrialized countries.

The wage replacement funds would be owned and administered by unions but heavily subsidized by the government, and would either supplement or replace the existing UI system to better match pre-existing wages. The funds wouldn’t discriminate, would be voluntary, and would likely lead to high rates of participation in the program. 

By providing wage replacement funds, unions could give non-union workers easier access to much-needed benefits in times of crisis. Additionally, they would provide a clear incentive for these workers to join a union. State governments could set up the funds through new taxes like small employee-side payroll tax. (Currently, almost all unemployment insurance benefits are financed by employer payroll taxes.) They could also allow labor organizations to use these funds to provide additional benefits like job training. 

Such programs would almost assuredly be very popular. One recent survey from the Washington Center for Equitable Growth showed that union-led benefit funds and job training opportunities were some of the most popular labor law reform proposals. The workers surveyed also indicated they would be more likely to join a union if the union provided those benefits. Another survey from Data for Progress showed overwhelming support for benefits navigators.

These policies are not a panacea. Wage replacement funds would pose an administrative challenge in states with low-union density. Moreover, they cannot replace the militant organizing needed to revive the labor movement in the United States. Labor membership matters, but so does using labor power effectively through tactics like striking. Ghent-style policies do not aim to replace organizing but rather facilitate it by decreasing some of the costs and increasing the immediate benefits of doing so. They increase the access and contacts workers have to labor organizations, and vice-versa. 

While unions, grassroots groups and advocacy organizations fight for continued unemployment relief, many of them are pushing for an overhaul of UI. In mid-April, Sens. Ron Wyden (D?Ore.) and Michael Bennet (D?Colo.) released a discussion draft of a bill that would begin to address many of the flaws in the current UI system through federal standards to expand coverage, minimum benefit standards, and automatic stabilizers. At the end of May, the Biden administration included similar reforms in its 2022 budget draft.

Although these proposals don’t include any Ghent-inspired policies, other officials have put forward plans that would expand UI program access and facilitate labor organizing. 

In late April, Rep. Richard Neal (D?Mass.), Chairman of the House Ways and Means Committee, unveiled legislation called the Worker Information Network that includes a benefits navigator program for UI as well as paid leave and childcare. However, the plan allows for a variety of non-profit organizations to receive funding, not just labor organizations. Due to their budgetary nature, federal UI reforms, including Ghent policies, could likely pass through the Senate’s reconciliation process which would require just 50 votes in the Democratic-controlled chamber. On the state level, a coalition of labor and community organizations, including the Maine AFL-CIO, is championing UI reform that includes UI benefit navigators that could be deployed by either community or labor organizations. 

The Center for Popular Democracy’s Unemployed Action project members and many of its local partners developed a federal #FixUI platform that includes not just navigators, but greater union and community organization involvement in training and boosting benefits. The Center for American Progress’ David Madland has proposed both UI navigators and a Ghent system. While no international or national labor union is currently campaigning for a full Ghent system, some labor leaders, like David Rolf, president of SEIU 775 in Seattle, have expressed support for Ghent-style policies. 

Sharon Corpening, the worker in Georgia, said, ?“This pandemic widened the fissures that were already there. To patch them, we’re missing the voice of workers who have to receive the benefits, who are really not making it, even in the best of economic circumstances. Unemployment is broken beyond repair without a serious overhaul.”

The UI system’s weaknesses are now more apparent than at any point since the Great Recession. The best chance to reform unemployment insurance in decades is here. And with it, we have the chance to implement policies that could help give both the labor movement and workers?—?organized and not yet organized?—?the boost they badly need. 

The ideas put forward in this article represent the views of the author alone and not their employer.

This blog originally appeared at In These Times on June 23, 2021. Reprinted with permission.

About the Author: Francisco Diez is an organizer from Philadelphia and the Worker Justice Policy Advocate at The Center for Popular Democracy.


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HISTORIC FIX TO NEW YORK’S PART-TIME UNEMPLOYMENT SYSTEM A WIN FOR WORKERS; BOOSTS NEW YORK’S ECONOMIC RECOVERY BY ENCOURAGING RETURN TO WORK

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NEW YORK, June 10, 2021 (GLOBE NEWSWIRE) — This week, New York’s legislature and Governor Cuomo announced a historic deal to fix the state’s worst-in-the-nation unemployment insurance rules for part-time work that were disproportionately hurting low-and-moderate income workers, especially Black and Brown workers, and holding back New York’s economic recovery. Senator Jessica Ramos and Assemblymember Al Stirpe championed this long overdue reform.

Unlike in virtually all other states, New York’s unemployment insurance rules arbitrarily and sharply reduce an individual’s benefits when they return to work part-time a few hours a day spread over several days. The poorly designed policy unduly complicates decision-making by employers and workers considering a partial return to work, hurting hundreds of thousands of part-time workers across the state.

The new pair of measures (S7148 and S1042), collectively revamp New York’s partial unemployment system so that it reduces benefits based on earnings the worker receives from part-time employment, rather than the arbitrary days-worked approach. Currently, the system disincentivizes part-time work by taking away almost all unemployment benefits when a person works just a few hours per week spread out over three or four days.

The new law also establishes an earnings disregard equal to one-half of a worker’s weekly UI benefit. It puts New York on a par with its five neighboring states and a total of thirteen states nationally and the District of Columbia, which all provide for comparable or more generous partial unemployment benefits. The reform especially reduces the heavy burden on part-time workers whose hours are spread over three or four days per week.

In addition, the law requires New York State’s Department of Labor to implement an immediate interim fix by allowing workers to work up to 10 hours a week without reduction in part-time unemployment benefits, up from the current 4 hours. The full reforms implemented in the new law are scheduled to take effect by April 2022.

This historic reform is a meaningful step for New York economic recovery and for the 600,000 workers who currently receive part-time unemployment benefits. More than two-thirds of recipients come from low-and moderate-income industries including accommodations, food services, healthcare, social assistance, and retail and more than half are workers in Black and Brown communities.

“Making critical updates to New York State’s antiquated Partial Unemployment Insurance system is a huge win for working families across our state. By changing the way we calculate eligibility we are ensuring New Yorkers who are working part-time or being called back to work at reduced hours can do so knowing that they will be able to provide for their families no matter how many days and hours of work they are offered each week,” said State Senator Jessica Ramos, the bill’s Senate sponsor.

“For far too long, New York’s unemployment insurance benefits wrongfully penalized claimants seeking part-time work,” said Assemblymember Al Stirpe, the bill’s Assembly sponsor. “These arbitrary regulations have made it incredibly difficult for many part-time workers to make ends meet. After the significant challenges of the pandemic, our state should not have a system with a disincentive to part-time work built in. Instead we should have a system that helps our families get back on their feet and encourages economic recovery and growth.”

“Central to New York’s recovery is getting people back to work,” said Senate Majority Leader Andrea Stewart-Cousins. “Expanding and increasing part-time unemployment insurance benefits will encourage New Yorkers to seek out and secure meaningful part-time work, while ensuring their income is supplemented appropriately to help them get back on their feet. This legislation passed by the New York State Senate Majority stands up for working-class New Yorkers whose hours were cut due to the pandemic or who were left unemployed and will help them in returning to the workforce. I thank Senator Jessica Ramos and Assemblymember Al Stirpe for championing this critical legislation, which will support New York’s economic recovery.”

“My colleagues and I in the Assembly Majority believe in putting New York families first and we know that unemployment benefits are a lifeline for families, especially during this health and economic crisis,” said Assembly Speaker Carl Heastie. “Many workers have faced a reduction in their hours or are only able to find part-time work, and this legislation ensures that they can take that work without losing their unemployment benefits. This change is critical as families and businesses work to get back on their feet. I would also like to thank Assemblymember Al Stirpe for commitment to getting this bill across the finish line.”

“Throughout the pandemic, New York’s stingy partial unemployment rule has been denying urgently needed benefits to workers whose hours have been cut — and now that the pandemic is easing it’s punishing workers who return to work part-time. NELP thanks Senator Ramos, Assemblymember Stirpe, and the legislative leadership for championing this long overdue common-sense reform, and Governor Cuomo for supporting it,” said Paul Sonn, State Policy Program Director at the National Employment Law Project.

“Our research makes it clear that the reform will benefit both the unemployed, incentivizing them to take on part-time work and moderately increase their total income, and employers and the economy overall, supporting a return to work that helps businesses and allows workers to keep their skills current and mitigating the adverse effects of prolonged periods of high unemployment,” said James Parrott, Director of Economic and Fiscal Policies at the Center for New York City Affairs at The New School.

“With the passage of this legislation, New York State moves from one of the worst to one of the best states for part-time workers supporting the most vulnerable and essential workers in our economy. This new system allows more part-time workers to collect unemployment at a time when they need it the most,” said Nicole Salk, Senior Staff Attorney, Legal Services NYC.

“New York has transformed an outdated and unfair part-time Unemployment Insurance system to the benefit of our clients and all hard-working New Yorkers who will no longer be penalized for obtaining part-time work. We applaud State Senator Ramos and Assemblymember Stirpe for their leadership on this important reform,” said Young Lee, Director of the Employment Law Unit at The Legal Aid Society of NYC.

“With the majority of partially unemployed workers being low and moderate income workers who are disproportionately people of color, this long overdue reform to the unemployment insurance system will help reduce material hardship for people who want to return to work. We are grateful for the leadership demonstrated by Senator Ramos, Assemblymember Stirpe, and the Governor in making this vital reform a reality,” said Jason Cone, Chief Public Policy Officer of Robin Hood.

“We are proud to be part of the coalition that fought for and won big improvements for New York’s unemployed workers,” said Stuart Appelbaum, President of the Retail, Wholesale and Department Store Union (RWDSU). “Many non-essential retail workers were laid off during the pandemic and are returning to what are now part-time jobs. These workers and countless others will now be able to return to work part-time without losing their entire unemployment benefit. As a result of the leadership of Senator Ramos and Assemblymember Stirpe, New York will have a faster economic recovery from the pandemic and tens of thousands of unemployed workers will be able to get back to work and still provide for their families.”

“As a statewide legal services organization, we handle many cases where a worker inadvertently loses all of their benefits simply by working a few extra hours.  The effect of the cliff is devastating and unfair. We applaud Senator Ramos, Assemblymember Stirpe and the Governor for implementing this historic reform,” said Kristin Brown, President and CEO of the Empire Justice Center.  

“This historic legislation will benefit thousands of New Yorkers who seek to sustain themselves during this time of economic uncertainty, while also creating a more economically just unemployment system for the future. NCLEJ applauds Senator Ramos and Assemblymember Stirpe for supporting low-wage workers and passing this bill,” said Jarron McAllister, Penn Law Fellow at the National Center for Law and Economic Justice.

“As an organizing project centered around the impacts of COVID, we believe that passing this bill will greatly improve New York State’s recovery, including getting people back to work. We thank Senator Ramos, Assemblymember Stirpe, and all of the legislative leadership for their work on this bill and for Governor Cuomo for signing it,” said Paul Getsos, Project Director of United Together Stronger Tomorrow.

This blog originally appeared at Nelp on June 10, 2021. Reprinted with Permission.

About the Author: For 50 years, NELP has sought to ensure that America upholds, for all workers, the promise of opportunity and economic security through work. NELP fights for policies to create good jobs, expand access to work, and strengthen protections and support for low-wage workers and unemployed workers.


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Unemployment Money Chaos Redux?; Clawing Back Dough From the Rich

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How many of you dealt with that chaos when it came to wrestling with the unemployment insurance system last year? Some of the rhetoric we heard was, “well that chaos was just the pandemic crush overwhelming the system”. Yes, that’s true in a very narrow sense—the system collapsed in many places, meaning people who were desperate to get a check to pay rent or for food had to wait months and months for a first check…and lots of people just gave up.

But, here’s the truth, folks—that’s a feature not a bug. So, as enhanced unemployment benefits are about to expire at the end of March but seem likely to be extended in a new stimulus bill, is this chaos going to continue to be as bad as it was a year ago? Michele Evermore, a senior policy analyst at the National Employment Law Project and a leading national expert on the unemployment insurance system, tells us the status and how we fix the broken system.

Remember during the presidential campaign when Joe Biden promised not to raise taxes for anyone making less than $400,000? I thought, “well, that’s dumb”. Why should someone making say $250,000—which puts them in the one percent—not pay higher taxes? I figured right then that that line-in-the-sand $400K number was a purely stupid political calculation—let’s not piss off the people in the suburbs who voted for Trump who we want to get.

Really? Why not try a direct populist argument to reach a whole lot of people who are making under $100,000 and get angry about taxes because they have to pay a heavy load but see people making $250,000 paying a relatively small sum? I talk with Matt Gardner, senior fellow at the Institute for Taxation and Economic Policy, about taxing people above $400,000, why other well-off people shouldn’t pay higher taxes as well and, bonus, how Netflix is paying less than one percent taxes on a massive revenue boost (hint: legalized corruption!)

This blog originally appeared at Working Life on February 3, 2021. 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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As job losses mount, states struggle to pay extended benefits

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About two dozen states have yet to start paying out the billions of dollars in federal jobless benefits extended by Congress last month, depriving struggling Americans of income even as many have been out of work for months.

In most of the states working to reset their unemployment insurance systems, people relying on federal aid — especially a new program set up for Uber drivers and others in the gig economy — will be waiting as long as several weeks to get their hands on the money. Among states experiencing delays are California, Michigan, Florida and Washington.

Americans are less likely to have cash saved to help bridge the gap because it took months of negotiations in Congress before the additional federal aid was renewed after lapsing at the end of July, said Ernie Tedeschi, a former U.S. Treasury economist, who is now the head of fiscal analysis at financial firm Evercore ISI.

“I worry that unemployed workers may have burned through a lot of those savings and have a lot less to sustain them,” Tedeschi said. “Workers need the relief that they’re eligible for, that they’re entitled to, as quickly as possible.”

The delay comes as job losses are growing, with the economic recovery losing momentum amid a resurgence of the coronavirus pandemic. The Department of Labor reported Friday that U.S. employers cut 140,000 jobs in December, the first decline in employment since April.

President-elect Joe Biden has backed Democratic leaders’ calls for more federal aid to boost benefits — a prospect that is more achievable with Democrats winning the two Georgia runoff elections on Tuesday, which gives them control over the Senate.

Neera Tanden, Biden’s pick to lead the Office of Management and Budget, said during an event held by Business Forward on Wednesday that the presidential transition team is “thinking about how to extend unemployment insurance for the duration of the crisis.” She didn’t elaborate on how they would do that.

But Congress has already begun to leave town until Biden’s Jan. 20 inauguration, meaning that jobless Americans will likely be waiting a while before they see more financial help from Washington.

While some states like New York, Maryland and Maine were able to issue the federal jobless payments without delay, others including Nebraska, North Dakota and Kansas say they are reviewing guidance from the Labor Department and will need time to start cutting the benefit checks again.


Even in states that are paying out the aid or expect to shortly, such as New Jersey, Texas and Georgia, workers who used up all 39 weeks of their unemployment benefits offered under federal programs last year will have to wait for additional reprogramming and processing of the computer systems.

Lawmakers extended several CARES Act emergency unemployment insurance programs under the massive economic relief bill signed into law on Dec. 27. These include the Pandemic Unemployment Assistance program, which provides jobless benefits to gig workers and others not traditionally eligible for help; and Pandemic Emergency Unemployment Compensation, which extends state unemployment benefits an additional 13 weeks.

But because Congress waited until just days before the programs’ Dec. 31 expiration date to pass a bill to extend the programs into 2021, many states didn’t have the time to set up their systems to continue paying out the benefits in the new year.

The relief bill also restored the Federal Pandemic Unemployment Compensation program — which expired at the end of July — to provide all workers receiving jobless aid with an extra $300 a week through March 14.

But it was the extension of that program that created a programming headache for some state systems that hadn’t paid the benefit since late summer.

Washington state was able to reprogram its system to prevent a lapse in benefits for its residents using the federal PUA and PEUC programs, but it won’t be able to start issuing the extra $300 payments until Jan. 15.

Massachusetts’ and Nebraska’s unemployment agencies say they will be able to issue the $300 payment this week, but are still working to set up the other aid programs.

So far, at least 18 states have started to issue benefit payments this week or plan to early next week. They include Arizona, Alabama, Louisiana, Maine, Idaho and New York, among others.

Some 32 states are currently not paying out all the benefit programs or have not provided an update on their website or responded to requests for comment. They include Michigan, Montana, Florida, Alaska, Washington and Wyoming.

For its part, the U.S. Labor Department has issued dozens of pages of guidance since President Donald Trump signed the bill into law last month. The agency also says it has held three calls and sent mass email messages to states to explain the new unemployment provisions in the stimulus package and will be holding technical assistance webinars this week and next.

“Some states can’t even really give a timeline at this point,” said Michele Evermore, an unemployment insurance expert at the left-leaning National Employment Law Project.

“Some states are waiting for all five pieces of guidance before they say anything or roll anything out,” she said, noting that the DOL issued several instructional documents during the holidays.

This blog originally appeared at Politico on January 8, 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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Unemployment Payments Are Running Out for Millions, Even As Long-Term Unemployment Surges

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Large numbers of jobless workers are seeing their unemployment payments come to an end as they reach their maximum weeks of eligibility despite short-term federal extensions. If Congress fails to act, millions more will suffer a total loss of income as their benefits expire at the end of the year.

The loss of unemployment payments hits workers of color, especially Black workers, the hardest. Because of structural racism, occupational segregation, and discriminatory exclusions from the labor market, Black workers have higher rates of unemployment, longer durations of joblessness, fewer funds to fall back on, and are more likely to live in states with the fewest weeks of available benefits.

An acute crisis looms in the very near term as the number of long-term unemployed workers—those out of work for 26 weeks or longer—is now surging. The seasonally adjusted number of long-term unemployed workers grew from 1.624 million in August to 2.405 million in September, the largest month-over-month increase since these data were first measured.

Historically, the duration of unemployment has been significantly longer for Black and Asian workers than for white workers, due to racist exclusions and other labor market inequities. In the 3rd quarter of 2019, an unemployment spell for Black and Asian workers lasted an average of nearly 26 weeks, compared with 19 weeks for white workers. As of 2019, 25.66 percent of Black unemployed workers were out of work for more than 26 weeks, versus 19.62 percent of white unemployed workers. Keep in mind that the unemployment rate for Black workers is usually about double that for white workers, so Black workers are facing a higher long-term unemployment rate on top of an already higher rate of joblessness.

If Congress fails to extend not only higher benefit levels but also the number of weeks of benefits, millions of unemployed workers will soon have zero income support, and these losses will hit Black and lower-income communities most affected by early layoffs the worst.

HOW MANY WEEKS OF UNEMPLOYMENT BENEFITS ARE AVAILABLE UNDER CURRENT PROGRAMS?

Workers in many states may qualify for up to 26 weeks of regular state unemployment insurance. However, after the Great Recession of 2007-2009, 10 states cut benefit duration. Alabama was the last state to do so; in June 2019 it cut benefits to 14 weeks. Three states cut maximums from 26 to 20 weeks (Michigan, Missouri, and South Carolina), one state cut maximum benefit duration to 16 weeks (Arkansas), and five states adopted sliding scales tied to state unemployment rates (Florida, Georgia, North Carolina, Kansas, and Idaho).

Since the start of the pandemic, however, four of those states restored benefits to 26 weeks: Michigan, Kansas, Idaho, and Georgia. Unfortunately, Michigan’s executive order restoring benefits was recently struck down by the state’s Supreme Court, which caused the state to temporarily drop back to 20 weeks until emergency temporary legislation was signed this week once again restoring 26 weeks of benefits through the end of the year. Idaho’s duration is based on its unemployment rate and has decreased to a maximum of 20 weeks.

As part of the CARES Act, Congress added 13 weeks of additional benefits called Pandemic Emergency Unemployment Compensation (PEUC). But that program is set to expire at the end of the year, as is the Pandemic Unemployment Assistance (PUA) program, which pays unemployment aid to millions of workers who don’t qualify for regular unemployment insurance (UI). Another program called Extended Benefits (EB) may add 50 percent more weeks than are available in regular state UI if the state’s unemployment rate is over 5 percent and more than 120 percent higher than it was for the same 13-week period over the past year; or states may adopt optional triggers that allow EB to kick in more readily. Moreover, states can adopt an additional trigger to add seven more weeks during periods of very high unemployment of more than 8 percent. You can find out if a state has triggered onto EB and the number of weeks here.

After that time, if workers have a qualifying COVID-related reason for being unemployed, they can then move into Pandemic Unemployment Assistance to get up to 39 total weeks of benefits, or 46 weeks in states with the extra high-unemployment-rate trigger allowing for seven more weeks. Generally, PUA will not apply to someone who originally was eligible for UI plus the available extensions, except in states with fewer than 26 weeks of regular benefits. PUA is generally available for 39 or 46 weeks—that is, until the end of December, when the program is currently set to expire.

HOW DO WORKERS APPLY FOR EXTENDED UNEMPLOYMENT ASSISTANCE?

Does that all sound confusing? Hopefully, for a claimant, shifting between programs should be a smooth process. Federal guidelines do require that workers affirmatively apply for the extra 13 weeks of unemployment benefits available under PEUC, and states are supposed to inform workers when they are eligible and tell them how to apply. It appears some agencies may not be doing that. But overall, the most current data showing regular UI exhaustion versus PEUC recipiency seem to indicate that the transition is by and large smooth for most workers. Anecdotally, workers in states like Michigan report the process to be seamless.

IS CONGRESS GOING TO EXTEND UNEMPLOYMENT BENEFITS INTO 2021?

Without Congressional action to extend the CARES Act’s PEUC and PUA programs into 2021, millions of workers will drop to zero benefits by the end of this year. Workers who became unemployed the third week in March will run out of benefits before the last week of the year—about a week earlier than the CARES Act programs run out. Any worker who was unemployed prior to the start of the pandemic, however, will not only run out sooner but also may be unlikely to qualify for PUA without a COVID-related cause for their initial unemployment. Considering PUA eligibility extends to pandemic-related unemployment going back to the end of January, some workers are already exhausting PUA. Layoffs related to the pandemic stretch back much farther than the initial spike in new claims—the State of Washington reported a 30 percent increase in claims the first week in March, for example. Finally, workers in states with fewer than 26 weeks of regular eligibility may have difficulty establishing a COVID-related cause to qualify for PUA after their regular UI, PEUC, and EB run out. Given the first-fired, last-hired systemic racial discrimination in employment for Black workers, and the fact that this recession has hit Black workers harder than white workers, extensions in the duration of unemployment payments is a particularly important racial justice issue.

In the short term, Congress and the Trump administration must reach a deal to extend the number of weeks available during this recession. To ensure we do not repeat past mistakes of leaving workers behind in the recovery, we should peg the number of weeks of benefits available to the duration of unemployment that Black workers experience. And we must address the long-term structural changes that are needed to ensure we have a UI system that centers the experiences of Black workers so that it is built to meet the needs of all workers.

This blog originally appeared at National Employment Law Project on October 23, 2020. Reprinted with permission.

About the Author: Michele Evermore is a Senior Policy Analyst for NELP. Her areas of expertise are Retirement Security, Social Security, Unemployment Insurance, and Worker Training.


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Unemployment Systems Floundering Without Worker-Centered Design

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New York, NY—The Century Foundation, the National Employment Law Project, and Philadelphia Legal Assistance today released the findings of an intensive study of state efforts to modernize their unemployment insurance benefit systems. This is the first report to detail how technology modernization has altered the experience of jobless workers.

The report, which was supported by a grant from the Robert Wood Johnson Foundation, draws lessons from state modernization experiences and recommends user-friendly design and implementation methods for future projects.

Read the new report, “Centering Workers: How to Modernize Unemployment Insurance Technology”

The COVID-19 pandemic has laid bare the struggling technology holding up our unemployment systems and the harm to workers when they cannot navigate or access their unemployment benefits.  Many state systems were programmed with COBOL, a long-outdated computer language.  While some states have undertaken modernization projects, many encountered significant problems and workers paid the price through inaccessible systems, delayed payments, and even false fraud accusations. The COVID-19 pandemic, which led to an unprecedented spike in unemployment claims, has further exposed the weaknesses in these systems and the difficulties workers face with their unemployment claims.

State officials have at times been candid about the deep flaws in their systems. Pennsylvania’s labor secretary described their 50-year old computer system as “held together with chewing gum and duct tape.”  Florida’s own state auditor found numerous flaws in the state’s new computerized system that went unfixed through multiple administrations. States and the private companies that develop these systems failed to consistently seek worker input and build systems focused on user experience.

The report also explores how modernization and controversial new technology like predictive analytics can affect access to benefits.

“Much remains unknown about how state unemployment agencies are using technology like automated decision-making, predictive analytics, and artificial intelligence,” added Julia Simon-Mishel, supervising attorney of the Unemployment Compensation Unit of Philadelphia Legal Assistance and principal investigator for the report. “While these tools can sometimes be helpful, we remain concerned about fairness, accuracy, and due process.”

“The pandemic has underscored that unemployment insurance is a lifeline for workers, yet state systems are rarely built with workers’ needs in mind,” said?Michele Evermore, senior policy analyst with NELP and a co-author of the report. “Our report finds that Black and Latinx workers are particularly poorly served by unemployment insurance systems. We have to do better.”

To date, fewer than half of states have modernized their unemployment benefits systems. Several have plans to modernize or are already in the midst of modernizing. The report provides guidance for them, as well as for modernized states looking to improve their systems.

The report also recommends six steps states can take right now, to expand access to benefits during the pandemic:

  1. provide 24/7 access to online and mobile services for unemployed workers;
  2. mobile-optimize unemployment websites and applications;
  3. update password reset protocols;
  4. use call-back and chat technology;
  5. adopt a triage business model for call centers; and
  6. comply with civil rights laws requiring that websites and applications be translated into Spanish and other commonly spoken languages.

“Modernization needs to be approached carefully to avoid creating new problems for workers,” noted?Andrew Stettner, senior fellow at The Century Foundation and a co-author of the report. “Our analysis shows that states were able to pay benefits more quickly after modernizing their systems, but workers were more likely to be denied assistance and too many of these denials were inaccurate. These problems have been magnified during the pandemic when no one should have to choose between paying rent, putting food on the table, and good health.”

The findings and recommendations in the report are grounded in publicly available data on unemployment insurance system performance, interviews with officials from more than a dozen states, and in-depth case studies of modernization in Maine, Minnesota, and Washington, conducted from October 2018 to January 2020.

This blog originally appeared at National Employment Law Project on October 5, 2020. Reprinted with permission.

About the Author: The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed?workers. For more about NELP, visit?www.nelp.org. Follow NELP on Twitter at @NelpNews.


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U.S. workers filed 881K claims for jobless benefits last week

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More than 880,000 people filed new applications for unemployment benefits last week, the Labor Department reported on Thursday.

The numbers are not directly comparable to previous weeks because of a change the Labor Department made in how it calculates the claims, which are seasonally adjusted. The number appears lower than the previous week’s 1 million claims, but that reflects a change in the Labor Department’s methodology rather than a strengthening of the U.S. labor market, economists say.

On an unadjusted basis, unemployment claims under state programs rose 0.9 percent from the previous week.

An additional 760,000 laid-off workers filed for jobless aid under the new pandemic unemployment assistance program, created for those not traditionally eligible for unemployment benefits like the self-employed and gig workers. That also marks a rise from the previous week’s 607,806 claims under that program.

Overall claims remain at historic highs. In total, more than 29.2 million workers are receiving unemployment insurance benefits, the Labor Department said, an increase from the prior week’s 27 million.

Why the change? The Labor Department regularly reports seasonally adjusted data, which accounts for expected changes in the labor market, such as when a large number of temporary retail employees get laid off after the holidays.

But economists say that methodology had been causing major distortions to the data during this recession, given how many workers were filing for unemployment due to unexpected coronavirus shutdowns. Experts welcome the change, which they say should make the numbers more accurate in the future, but they warn against trying to compare this week’s seasonally adjusted data to weeks prior.

Regardless of the change in calculations, non-seasonally adjusted data shows overall claims rose last week to 833,352 from 825,761 the week before.

What’s next: The Labor Department will report jobs numbers for the month of August on Friday. The July report showed an overall unemployment rate of 10.2 percent, and while most economists expect that number to fall slightly in August, many expect the pace of job growth will slow down.

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

About the Author: Megan Cassella is a trade reporter for POLITICO Pro. Before joining the trade team in June 2016, Megan worked for Reuters based out of Washington, covering the economy, domestic politics and the 2016 presidential campaign. It was in that role that she first began covering trade, including Donald Trump’s rise as the populist candidate vowing to renegotiate NAFTA and Hillary Clinton’s careful sidestep of the Trans-Pacific Partnership.

A D.C.-area native, Megan headed south for a few years to earn her bachelor’s degree in business journalism and international politics at the University of North Carolina at Chapel Hill. Now settled back inside the Beltway, Megan’s on the hunt for the city’s best Carolina BBQ — and still rooting for the Heels.


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South Florida AFL-CIO Rallies for Unemployment Insurance

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Working people across the United States have stepped up to help out our friends, neighbors and communities during these trying times. In our regular Service + Solidarity Spotlight series, we’ll showcase one of those stories every day. Here’s today’s story.

The South Florida AFL-CIO, led by President Jeffrey Mitchell (TWU), partnered with Rise Up Florida! to protest and rally on Friday at Trump National Doral Miami golf resort. Union members and our allies called on President Trump and U.S. Sens. Marco Rubio and Rick Scott to pass the HEROES Act and extend enhanced unemployment insurance. The central labor council purchased two giant rats, one for Rubio and one for Scott, and a Trump inflatable to be part of the event. “Without that money, we cannot continue with our life,” Roy James, a member of UNITE HERE who lost his job at the Miami International Airport in March, told NBC 6 South Florida. “Even with $1,000, I cannot pay my bills because even my rent is $1,500.” After the rally at Trump’s resort, a caravan of union members traveled to the senators’ Miami offices.

This blog originally appeared at AFL-CIO on August 4, 2020. Reprinted with permission.

About the Author: Aaron Gallant is a contributor for AFL-CIO.


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