Topline
With at least 21 red states opting out of a $300-per-week federal unemployment supplement amid fears of a labor shortage, it’s not clear that the Biden Administration—which has repeatedly argued that the expanded benefits are not the cause of the perceived shortage—will be able to intervene and force states to pay them.
President Joe Biden speaks about the March jobs report in the State Dining Room of the White House … [+]
Key Facts
The Washington Post reported Thursday that, despite efforts within the Biden Administration to find a way to continue payments in every state, officials at the Labor Department do not believe the federal government will be able to force states to maintain the benefits until they expire in September.
Labor Department officials also don’t believe the federal government will be able to issue its own payments to individuals in the affected states, the Post reported, citing two people familiar with the discussions.
The Century Foundation, a progressive think tank, found that 4.8 million workers would be cut off from their benefits early if every Republican governor decided to stop paying the supplement.
Big Number
444,000. That’s how many new claims for regular state unemployment benefits were filed last week (on a seasonally adjusted basis), according to data released Thursday by the Labor Department. Despite some improvement in the labor market, weekly claims remain well above prepandemic levels.
Chief Critic
“A Republican president leaves the economy in tatters, and then Republican politicians stand in the way of a Democratic president’s efforts to fix it,” Sen. Ron Wyden (D-Ore.) said in a statement earlier this week. “I continue to call on the Labor Department to explore all avenues for continuing to provide benefits for jobless workers in all states.”
Key Background
Wyden isn’t the only lawmaker who has urged the Biden Administration to find a way to continue paying expanded benefits to unemployed individuals in red states. In a letter to Labor Secretary Marty Walsh last week, Sen. Bernie Sanders (I-Vt.) cited a section of the CARES Act—the pandemic stimulus bill passed in March 2020—that mandates that the Labor Secretary provide benefits under the Pandemic Unemployment Assistance (PUA) program to all workers who are eligible for the program. The PUA program was designed under the CARES Act to extend unemployment insurance (UI) benefits to self-employed individuals, freelancers and gig workers who are not eligible for traditional state benefits and was expanded by the Biden Administration to include workers who left jobs because of Covid-19 safety concerns, workers who lost hours or employment as a result of Covid-19 and school employees who lost pay because of school closures. In his letter, Sanders argues that while states may be able to halt benefits under other federal programs, they must continue paying PUA benefits.
Tangent
As their states cut the $300 UI supplement, two Republicans governors are offering return-to-work bonuses instead. Arizona will pay bonuses up to $2,000 and Montana will pay $1,200 bonuses. Connecticut, which has not opted out of the $300 program, will also pay a $1,000 bonus.
What To Watch For
The Labor Department is expected to arrive at a formal conclusion about its legal authority to force states to pay benefits “soon,” according to the Post.
Further Reading
As Fears Of Worker Shortages Grow, White House Economists Say Covid-19 Is To Blame—Not $300 Unemployment Benefits (Forbes)
Could Covid-19 Worker Shortages Create A $15 Minimum Wage—Even Without A New Law? (Forbes)
Sanders Urges Biden Administration To Block Red States From Cutting Some Federal Unemployment Benefits—Even If Governors Want To (Forbes)
At Least 21 States Dropping $300-A-Week Federal Unemployment Benefits (Forbes)
