There’s no help coming anytime soon for the millions about to lose federal unemployment benefits in two dozen GOP states

Joe Biden sad
President Joe Biden.

  • At least 24 red states are starting to end their federal jobless benefits within weeks.
  • The moves will impact 4 million people on unemployment, with about half losing all government aid.
  • The Labor Department has concluded it has limited authority to step in to keep aid flowing.
  • See more stories on Insider’s business page.

Almost half of all US states have decided to end their participation in federal unemployment benefits, setting up some workers to receive drastically reduced payments – and others without any federal relief coming through the door.

Twenty-four GOP-run states are moving to slash federal unemployment benefits within weeks, citing a so-called labor shortage and lack of hiring. Governors in those states are ending programs set up in the early in the pandemic, which added federal cash onto state unemployment checks and extended the weeks people were eligible for aid. Nebraska was the latest to pull the plug on all stimulus jobless aid programs, on Tuesday.

The measures will slash jobless aid from 4 million people, per an estimate from Andrew Stettner at the liberal-leaning Century Foundation. That projection means that nearly one in four of all Americans receiving unemployment are poised to experience some reduction in their benefits.

One of them is Scott Heide, a 35-year-old in Florida. His state’s governor, Ron DeSantis, announced this week that the state would be terminating its participation in the extra $300 in weekly federal benefits effective June 26.

Heide told Insider that he’s been on unemployment for almost a year. When he lost his job, he also lost his health insurance, and has had to pay over $800 a month for COBRA insurance since. He had to leave his apartment and move back in with his parents.

The original $600 supplement “really made a big difference,” he said, but that expired after just a few months. Then, Biden’s American Rescue Plan added in a $300 benefit. “That was like my lifeline” for paying bills, Heide said. But at a certain point he said he knew it was a “matter of time” before DeSantis went down the same road as other GOP governors.

“It’s just really tough because I’m trying to get a job, but it’s not that easy. And I feel like I’m being punished for no reason when it’s out of my control if somebody offers me a job. All I can do is apply,” Heide said.

Florida is an anomaly among the GOP states moving to end federal benefits in that it’s only stopping the additional $300 – for now, at least – and keeping in place programs that expand unemployment eligibility and the number of weeks recipients can access benefits.

In other states, about 2.1 million workers on those programs – Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) – will lose their benefits entirely, per Stettner’s calculations.

Some advocates and politicians have said that Biden’s Labor Department has an obligation to step in and provide PUA benefits, arguing that it’s mandated under the CARES Act.

Sen. Bernie Sanders wrote a letter to Labor Secretary Marty Walsh pressing the Labor Department to continue paying out benefits on its own.

Other Democrats have called on the agency to continue exploring options without specifically urging them to distribute the aid.

“I think the administration should be looking under every rock, and every nook and cranny for ways to protect the vulnerable,” Wyden said in an interview on Tuesday. He suggested he was looking at “next steps.”

Yet it appears that the Biden administration won’t be able to prevent a lapse in unemployment aid in the GOP states. The Labor Department has concluded it’s probably unable to help pay out the benefits, an administration official told Insider last week, given that unemployment systems are administered as a federal and state partnership built on agreement from the states.

The Labor Department did not immediately respond to a request for comment.

“I think there is still going to be litigation on this topic,” Stettner told Insider. “The real legal question is whether DOL has the authority to force states to pay benefits or find a way to get them out themselves.”

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Ex-Boston Mayor Marty Walsh knew of the domestic violence allegations against his pick for the city police commissioner prior to appointing him, affidavit says

Labor Secretary Marty Walsh
Labor Secretary Marty Walsh, speaks during the inaugural meeting of the Task Force on Worker Organizing and Empowerment, with Vice President Kamala Harris, in Harris’ ceremonial office, Thursday, May 13, 2021. When he was mayor of Boston, Walsh appointed Dennis White as Boston Police commissioner in January 2021, prior to joining the Biden administration.

  • Ex-Mayor of Boston Marty Walsh knew of past domestic abuse allegations against his police commissioner pick, according to a court affidavit.
  • Walsh, now US Labor Secretary, maintained that he had no knowledge of the internal affair history of Dennis White.
  • White was placed on administrative leave in February after a Boston Globe investigation revealed he had allegedly pushed and threatened to shoot his then-wife.
  • See more stories on Insider’s business page.

According to a court affidavit filed earlier this week, then-Mayor of Boston Marty Walsh was aware of the domestic abuse allegations against his pick for the city’s police commissioner.

Boston Police Commissioner Dennis White was placed on administrative leave in February after a report by The Boston Globe revealed 1999 allegations that White had pushed and threatened to shoot his then-wife, who was also a police officer. White succeeded retired commissioner William Gross in January 2021 after Walsh appointed him.

The affidavit is part of a lawsuit filed by White against acting Mayor Kim Janey after the city attempted to fire him earlier this month following an outside investigation initiated by Walsh, WBUR reported.

In the affidavit, Gross said in January 2014, when he was superintendent-in-chief of the BPD, he and then-commissioner William Evans were reviewing candidates on the force for promotion, including White, who was up for promotion to deputy superintendent.

Gross said the mayor must approve every candidate to the command staff, and therefore is briefed on each one and their internal affairs history.

“There is no way anyone is brought onto the command staff without such a briefing to the mayor and approval by the mayor,” Gross said in the affidavit. “The city, including Mayor Walsh, was aware no later than January 2014 of White’s IA [internal affairs] record.”

Gross’ remarks in the affidavit contradict Evans’ and Walsh’s claims that they were not aware of White’s past prior to being appointed to the commissioner role.

In February, Walsh, who currently serves as the US Secretary of Labor for the Biden administration, denied having any knowledge of the domestic abuse allegations prior to appointing White as police commissioner.

“These disturbing issues were not known to me or my staff but should have been at the forefront,” Walsh said on February 3, ahead of his nomination hearing to be labor secretary.

In a Wednesday statement, Gross continued to dispute Gross’ claim in the affidavit, saying that he “was not aware of these serious allegations until after I appointed White as police commissioner.”

“Neither the allegations nor the internal affairs files were shared with me in 2014, or during any other consideration of Dennis White,” Walsh said in the statement to The Globe. “Had I known, I would not have chosen him for police commissioner or any other role.”

Evans also denied that he nor the former mayor knew about White’s internal affair history, saying that it was “not true.”

“Under no circumstances did I know about his past, nor did the mayor know,” Evans told The Globe.

White called the investigation a “sham” and Janey’s attempts to fire him as an “ambush,” WBUR reported. He filed his own affidavit Wednesday denying the allegations in his internal affairs history, and disputing claims made in a 19-page report by an independent investigator.

“The investigator’s report, which was made public by the Acting Mayor, has had a devastating effect on me,” White said in the affidavit. “It is filled with false allegations of the most serious nature, including allegations I committed the crime of domestic violence, and has caused the most severe damage to my reputation with the general public.”

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Biden’s Labor Secretary insists April’s weak jobs gain of 266,000 ‘is a good number’

Boston Mayor Marty Walsh
Labor Sec. Marty Walsh.

  • The April jobs report fell far short of the 1 million growth expectation, adding just 266,000 jobs.
  • Labor Secretary Marty Walsh said he still thinks that 266,000 “is a good number.”
  • He said expanded federal unemployment insurance is still needed despite calls to end the benefits early.
  • See more stories on Insider’s business page.

The Friday jobs report was a major disappointment, as the US economy added just 266,000 jobs in April despite economists predicting a gain of at least 1 million.

But Labor Secretary Marty Walsh said on CNBC that this report should still be celebrated.

“I think as we continue to move forward here, hopefully in the coming months we are going to see lots of those Americans who are looking for jobs, finding jobs, and I’ll be able to stand in front of this camera and talk about the great gains we’ve had,” Walsh said. “But I still think 266,000 jobs this month is a good number.”

“If you look back on the last three months, the United States economy has added 500,000 new jobs per month as compared to the previous three months where it was 60,000,” Walsh said. So we are definitely going in the right direction but we still have a ways to go, there’s no question about it. We are still dealing with a pandemic.”

Insider’s Ben Winck reported on Friday that along with the disappointing job gains, the unemployment rate rose in April to 6.1% from 6%, while economists had expected it to drop to 5.8%. Possible reasons for the report falling short of expectations could include temporary layoffs and too-generous unemployment insurance.

The report highlights an increasing split between the weak jobs recovery and a booming economy led by consumer spending. For instance, US gross domestic product grew at an annualized rate of 6.4% in the first quarter – the second-strongest expansion since 2003. Insider’s Juliana Kaplan and Grace Kay reported on shortages of all sorts of items amid reopening, such as chicken and lumber, all evidence of a sudden increase in spending.

Walsh criticized the argument that unemployment benefits are to blame for the weak jobs report. He said people “obviously” need unemployment benefits given the millions of Americans who are still out of work.

At nearly the same time, the Chamber of Commerce urged an end to the $300 weekly benefits, with the chamber’s chief policy officer, Neal Bradley, saying in a statement that the “disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market.”

But Walsh remained adamant that retaining unemployment benefits is vital to economic recovery.

“We have lost restaurants. We have lost businesses,” Walsh said. “I wouldn’t say we are in the midst of pandemic … but we are still living and dealing with the pandemic, and as we continue to move forward here we will continue to recover.”

Walsh emphasized that as vaccinations continue, “we are starting to see the confidence come back.”

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Uber, DoorDash and other gig-economy stocks fall after US labor secretary says most gig workers should be classified as employees

uber ceo dara khosrowshahi profile 2x1
Uber CEO Dara Khosrowshahi.

  • US labor secretary Marty Walsh said “in a lot of cases gig workers should be classified as employees” in an interview with Reuters on Thursday.
  • Uber, Lyft, Doordash, and Grubhub, along with other firms depending on the “gig economy” labor all fell after the news broke.
  • Walsh said gig workers should have “all of the things that an average employee in America can access,” per Reuters.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares of rideshare and delivery companies including Uber, Lyft, Doordash, and Grubhub all fell on Thursday after reports out of Reuters said US labor secretary Marty Walsh believes most gig workers should be classified as employees.

“We are looking at it but in a lot of cases gig workers should be classified as employees,” Walsh said in his interview with Reuters on Thursday.

“These companies are making profits and revenue and I’m not (going to) begrudge anyone for that because that’s what we are about in America… but we also want to make sure that success trickles down to the worker,” Walsh added.

The US labor secretary also said that the Department of Labor will have conversations with companies that employ gig workers in the coming months to ensure they have access to “all of the things that an average employee in America can access,” Reuters reported.

Gig workers are independent contractors who enter into contracts with on-demand companies to provide services to clients.

The last decade has seen an explosion in the so-called “gig economy” with companies like Uber and Lyft fighting to maintain the independent contractor status of their workers.

In March, California voters approved a ballot measure that exempts companies that utilize the “gig economy” from having to treat workers as employees.

The measure freed companies like Uber and Lyft from a 2019 state law that entitled workers to overtime pay, sick leave, and unemployment benefits.

Now, these new comments from the US secretary of labor again call into question the longevity of the gig worker business model.

Walsh noted in his interview that if the federal government didn’t cover gig economy workers during the pandemic, they would “not only have lost their job, but they wouldn’t have had any unemployment benefits to keep their family moving forward.”

Gig workers received a reported $80 million in benefits from the US government during the pandemic, according to an analysis of government data by The Washington Post.

Shares of Uber and Lyft fell as much as 8.34% and 13.67% on Thursday after the news broke, while DoorDash and Grubhub saw their shares fall as much as 11.05% and 4%, respectively.

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Biden will create a task force to support strengthening unions and their membership

Biden
President Joe Biden.

  • President Joe Biden is creating a task force to strengthen unions and their membership.
  • The task force will look into existing and new policies to strengthen worker power.
  • The rate of unionization has fallen in the past 40 years, and Amazon workers recently led a failed union drive.
  • See more stories on Insider’s business page.

President Joe Biden is creating a task force to help promote and strengthen union membership through an executive order today.

According to the White House, the task force – which will be chaired by Vice President Kamala Harris, with Labor Secretary Marty Walsh serving as vice chair – will focus on helping to bolster union membership and worker organizing and bargaining.

The task force will examine both existing policies and the need for new ones, and report back recommendations within 180 days. The group will also include Treasury Secretary Janet Yellen, Transportation Secretary Pete Buttigieg, and Interior Secretary Deb Haaland.

“Since 1935, when the National Labor Relations Act was enacted, the policy of the federal government has been to encourage worker organizing and collective bargaining, not to merely allow or tolerate them,” the White House release said. “In the 86 years since the Act was passed, the federal government has never fully implemented this policy.”

The main focuses of the task force include setting up the federal government as a “model employer,” helping to bolster worker organizing – especially by increasing power for marginalized workers, and those in industries where organizing is difficult – as well as generally upping the number of workers in unions.

Union membership has fallen

A report from the Economic Policy Institute (EPI), a left-leaning think tank, found that the number of workers who are represented by a union declined by 444,000 from 2019 to 2020.

However, the rate of unionization – the share of workers represented by one – actually increased in 2020, to 12.1% from 11.6%. The report attributes that to the power that unions give their workers, potentially resulting in those unionized workers having more of a say in how their workplaces functioned during the pandemic and its economic impact. And industries that are less unionized – the report cites leisure and hospitality – also saw the most job losses.

On the whole, according to EPI, the unionization rate is highest for Black workers, coming in at 13.9%. Throughout the pandemic, both that rate and the number of Black workers represented by a union increased.

Data from the Bureau of Labor Statistics also found that “Nonunion workers had median weekly earnings that were 84 percent of earnings for workers who were union members ($958 versus $1,144).”

However, in a historical context, unionization rates are still very low. EPI said 2020’s rate is still below half of what it was 40 years ago. Amazon workers had a recent high-profile union loss, as workers in a Bessemer, Alabama warehouse voted against forming a union. That unit would’ve been the first union for the company.

“Amazon didn’t win – our employees made the choice to vote against joining a union,” the company said in a statement after the vote, over which the Retail, Wholesale and Department Store Union (RWDSU) has filed official objections.

But with Biden’s task force, union membership could see a boost. The president has also backed a labor-rights bill called the PRO Act.

“As America works to recover from the devastating challenges of deadly pandemic, an economic crisis, and reckoning on race that reveals deep disparities, we need to summon a new wave of worker power to create an economy that works for everyone,” Biden said in a March statement on the bill.

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Biden says he seriously considered Bernie Sanders for labor secretary, but couldn’t risk Senate control

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Sen. Bernie Sanders and former Vice President Joe Biden talk before a Democratic presidential primary debate in February 2020.

  • President-elect Joe Biden said on Friday that he strongly considered Sen. Bernie Sanders of Vermont to be his labor secretary, but both men decided against the move after the dual Georgia runoff election wins gave Democrats control of the upper chamber.
  • “I did give serious consideration on nominating my friend Bernie Sanders to this position,” Biden said. “I’m confident he could have done a fantastic job. I can think of no more passionate, devoted ally to working people in this country.”
  • Biden ultimately tapped Boston Mayor Marty Walsh, a close ally with strong ties to unions, to become his labor secretary.
  • Visit Business Insider’s homepage for more stories.

President-elect Joe Biden said on Friday that he strongly considered Sen. Bernie Sanders of Vermont to be his labor secretary, but both men decided against the move after Democrats captured both US Senate seats in the Georgia runoff elections, giving the party control of the upper chamber.

Sanders, who was the last major candidate against Biden in the 2020 Democratic presidential primary campaign, was a key surrogate for the president-elect in the run up to the November election.

“I did give serious consideration on nominating my friend Bernie Sanders to this position,” Biden told reporters in Wilmington, Delaware. “I’m confident he could have done a fantastic job. I can think of no more passionate, devoted ally to working people in this country.”

He added: “But after Tuesday’s results in Georgia, giving Democratic control to the United States Senate and a tie vote, Bernie and I agreed – and as a matter of fact Bernie said – we can’t put control of the Senate at risk on the outcome of a special election in Vermont.”

Sanders is slated to lead the Senate Budget Committee in the 117th Congress.

Vermont has a Republican governor, Phil Scott, who was first elected in 2016 and reelected in 2018 and 2020. If Sanders had vacated his seat, it would have triggered a special election.

Read more: President-elect Biden expressed confidence his inauguration will be safe. A few hours later, Twitter warned there’s talk of another DC Capitol attack on January 17th.

Democrats Raphael Warnock and Jon Ossoff defeated GOP Sens. Kelly Loeffler and David Perdue in the Georgia elections, respectively. After both men are seated, the Senate will be split 50-50, with Democrats controlling the chamber due to Vice President-elect Kamala Harris’s tiebreaking vote.

Biden ultimately tapped Boston Mayor Marty Walsh, a close ally with strong ties to unions, to become his labor secretary.

“This is one of the most important departments to me,” Biden said on Friday. “I trust Mayor Walsh and I’m honored he accepted.”

The president-elect stated that he and Sanders would “work together, travel the country together” to meet “with working men and women who feel forgotten and left behind in this economy.” 

He added: “We agreed that we will work closely on our shared agenda of increasing worker power and to protect the dignity of work for all working people.”

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