at-least-1-million-people-may-not-get-trump’s-$400-unemployment-boost

At least 1 million people may not get Trump’s $400 unemployment boost

U.S. President Donald Trump takes questions during a briefing on the coronavirus disease (COVID-19) pandemic at the White House in Washington, August 11, 2020.

Kevin Lamarque | Reuters

An extra $400

Trump’s executive order was one of four measures signed on Saturday to address jobless benefits, evictions, student loans and payroll taxes.

Top Democratic lawmakers and White House officials have struggled to compromise on another round of broad coronavirus relief since negotiations began about two weeks ago.

Unemployment aid was among the thorny issues holding up talks.

A $600-a-week federal supplement to state unemployment benefits, offered by a prior round of relief, lapsed at the end of July, throwing jobless Americans’ income off a cliff overnight.

House Democrats passed a $3 trillion bill in May that would extend those $600 payments through early next year. Senate Republicans proposed a $1 trillion bill two weeks ago seeking to lower the relief to $200 a week in the short term.

Instead, Trump’s executive order offers an extra $400 a week — a $300 federal benefit and a $100 state benefit.

Significant questions remain as to how — and even if — states will implement the measure. Some workers, for example, may get just the $300 federal payment.

The benefit would last until Dec. 6 or a $44 billion disaster-relief fund runs dry, whichever comes first.

But many may not see extra aid at all.

Restrictions

That’s due to a restriction stipulating that eligible recipients must be getting at least $100 a week in state unemployment insurance benefits.

But most states set minimum weekly benefit payments far below that threshold.

Roughly 3% of those collecting unemployment insurance get less than $100 a week — implying about 1 million people, according to an analysis by Ernie Tedeschi, an economist at Evercore ISI.

Forsythe estimates the figure to be around 6%.

It’s hitting people who were already vulnerable and low-income before this job loss.

Eliza Forsythe

labor economist and assistant professor at the University of Illinois at Urbana-Champaign

These workers are disproportionately low-wage, part-time and female workers (who were more likely than men to have low-wage or part-time jobs), Forsythe said.

“It’s hitting people who were already vulnerable and low-income before this job loss,” she said.

But the real figure of people omitted from the federal aid may be much higher.

For one, Forsythe’s analysis doesn’t factor in workers receiving partial unemployment benefits because their hours were cut.

Pandemic Unemployment Assistance

Many workers currently receiving federally funded unemployment assistance may also miss out on the extra aid, according to Michele Evermore, a senior policy analyst at the National Employment Law Project.  

That could be the case for the Pandemic Unemployment Assistance program, created by the CARES Act in March, for example. The federal program expanded the pool of workers eligible for unemployment benefits to include self-employed, gig, freelance and contract workers, among others.

There were about 13 million people getting benefits through that program as of mid-July, according to most recent Labor Department data — representing more than 40% of all recipients of jobless aid.

Trump’s order says states may satisfy their financial obligation ($100 a week) by counting their current benefit outlays. (In other words, a state wouldn’t have to put in additional funds if it already pays a worker $100 a week in state benefits.) But PUA is a federally funded program, meaning recipients don’t getting state money.

So, for PUA recipients to be eligible for the federal $300-a-week, states may have to kick in an extra $100 for these workers — which isn’t a given considering current state budget shortfalls, Evermore said.

The same would be true for other workers, like those getting aid through work-sharing programs and extended benefits, Evermore said.

However, this scenario is still the “subject of much speculation,” Evermore said. 

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