Biden Wants To Reform America’s ‘Broken’ Unemployment System: Unemployed Americans Have Claimed For These Changes

Between countless hours of waiting and website failures trying to file for unemployment benefits and being singled out for fraud by mistake, unemployed Americans have clamored for changes to the system.

Unemployed Americans have also faced sudden loss of benefit income multiple times during the pandemic, as lawmakers engaged in lengthy negotiations to extend unemployment benefits. Every time new federal legislation was passed calling for adjustments to unemployment benefits, it would take weeks for state systems to process the changes, leaving some of the most financially vulnerable Americans without a financial safety net. Biden, in his recently disclosed $ 1.8 trillion American Families Plan, said he wants to work with Congress to “automatically adjust the length and amount of unemployment benefits unemployed workers receive based on economic conditions,” according to a fact sheet from the White House on the plan.

media-object type-InsetPullQuote inline scope-web|mobileapps article__inset article__inset–type-InsetPullQuote article__inset–inline “>

“‘If we don’t fix unemployment insurance now, the system will be even more broken when the next inevitable recession hits'” – Sen. Ron Wyden, D., Ore.

“This will ensure that the future legislative delay does not undermine the economic recovery and will allow a permanent reform of the system to provide the safety net that workers deserve in the most difficult times,” according to the April 28 newsletter. White House officials did not respond to MarketWatch’s query regarding the specifics of Biden’s proposal, including the economic conditions that would trigger automatic benefit adjustments and whether Biden wants the temporary pandemic relief programs to be permanent. But Senator Ron Wyden (D., Oregon), who heads the Senate Finance Committee, and Senator Michael Bennet (D., Colorado) have already proposed a plan to reform unemployment insurance, which experts say will likely influence on Biden’s plan. plan. “The COVID-19 pandemic has made it overwhelmingly clear that our nation’s unemployment insurance system is inadequate and unreliable for workers when they lose a job,” Bennet said in a statement. “That is why Senator Wyden and I have proposed reforming our nation’s unemployment insurance system and linking benefits to economic conditions on the ground.” Bennet said he hopes to work with the Biden administration and Congress to make the unemployment system “more responsive” to unemployed Americans. Here’s a look at the pandemic-related changes in unemployment benefits that would likely hold, or not, under a Democratic-led reform proposal. at least 26 weeks of benefits, replace 75% of a typical worker’s salary, cover part-time workers and workers who quit their jobs for a good cause, and offer benefits to workers during their first week of unemployment ”According to a short April 14 policy. There are currently seven states (Alabama, Arkansas, Florida, Idaho, Missouri, North Carolina, and South Carolina) that provide unemployment benefits for less than 26 weeks. Under the CARES Act and the other two pandemic stimulus packages that were signed into law, unemployed Americans nationwide who exhausted their state benefits qualified for additional weeks of federally funded unemployment through the Unemployment Assistance program of Pandemic Emergency.

media-object type-InsetPullQuote inline scope-web|mobileapps article__inset article__inset–type-InsetPullQuote article__inset–inline “>

“There are seven states – Alabama, Arkansas, Florida, Idaho, Missouri, North Carolina and South Carolina – that provide unemployment benefits for less than 26 weeks. ”

Under the Wyden-Bennet proposal, unemployed Americans would automatically qualify for an additional 13 weeks of federally funded unemployment benefits if, for example, “the three-month average state or national total unemployment rate (seasonally adjusted) equals or above 5.5%, ”according to the policy summary. “The idea of ​​this proposal is to quickly provide 13 weeks of additional benefits as soon as the economy turns down, and to continue to provide additional weeks beyond that,” said Andrew Stettner, an unemployment expert at the Century Foundation, a liberal-minded thinker. Unemployment benefits for gig workers, independent contractors, and self-employed Americans: unlikely to be sustained During the pandemic, gig workers, independent contractors, and the self-employed became eligible for benefits from unemployment through a CARES Act program known as the Pandemic Unemployment Assistance Program. At a minimum, they can collect the equivalent of the average weekly benefit in their state. In all 50 states and Washington DC, the minimum amount is more than $ 100 per week, according to the Department of Labor. Employers of traditional workers must file a W2 tax form on their behalf to report their income and the taxes deducted from their paychecks, a portion of which goes directly to funding unemployment benefits.

“Non-traditional workers who received benefits through the PUA program ‘did not contribute to the system’” – Chad Stone, chief economist at the Center on Budget and Policy Priorities

Non-traditional workers who received benefits through the PUA program “did not pay into the system,” meaning they did not contribute tax dollars to fund unemployment insurance, said Chad Stone, chief economist at the Center for Budget and Policy Priorities. , a think-tank focused on the impact of fiscal and budget issues on inequality and poverty. The Wyden-Bennet proposal calls for the establishment of “a job seekers allowance of $ 250 per week that would be available to any unemployed worker who is not covered by the traditional unemployment insurance system.” It would be “100% funded by the federal government,” according to the policy brief. That will be a tough sell, particularly for Republican and moderate Democratic lawmakers like Sen. Joe Manchin of West Virginia, Stone told MarketWatch. “I don’t think it can be done unless there is an effort to find a way for these workers to contribute to its funding,” he added. Even as the unemployment rate plunges further as vaccination rates rise, lawmakers should not go ahead and forget to make permanent changes to the unemployment insurance system, he said. Wyden agrees. “If we don’t fix unemployment insurance now, the system will be even more broken when the next inevitable recession hits,” he said in a statement.