Unemployed people in Arkansas have won back their benefits, marking the third state to reverse aid cuts

unemployment insurance weekly benefits stimulus checks recession job losses coronavirus pandemic
Carlos Ponce joins a protest in in Miami Springs, Florida, asking senators to continue unemployment benefits past July 31, 2020.

  • Unemployed workers in Arkansas are the latest to win back their federal benefits.
  • They follow similar temporary legal victories in Maryland and Indiana, with thousands getting benefits restored.
  • However, the lawsuits have won back benefits the Biden administration didn’t intervene to restore.
  • See more stories on Insider’s business page.

Unemployed workers in Arkansas are the latest group to win back their federal unemployment benefits after Gov. Asa Hutchinson moved to terminate them ahead of the September expiration.

In a Thursday ruling, Judge Herbert Wright said that, as a lawsuit against the state continues, the state must restart benefits for Arkansas residents. Wright wrote that plaintiffs “are likely to suffer harm” if the state doesn’t restore financial aid and that the “Court has serious doubts that the Governor and the Director of Workforce Services were acting within the scope of their duties.”

One of the five plaintiffs in the suit said they’ve been unable to get their prescribed medications, since they can’t afford them after the expiration of benefits. Another said they’ve been unable to pay medical bills for their daughter, who broke her arm, and cannot afford food.

The new ruling could impact just under 70,000 Arkansas residents, according to an estimate from Andrew Stettner, a senior fellow and jobless policy expert at the left-leaning Century Foundation. A little under 52,000 of those recipients were eligible to receive benefits under federal programs that expanded both eligibility and the number of weeks that jobless workers can collect checks. That means that those workers lost all benefits – not just the additional $300 week from the federal government – when Arkansas halted its participation in federal unemployment in June.

The temporary victory in Arkansas comes after workers in Indiana and Maryland successfully clawed back their benefits through similar preliminary injunctions. Suits against governors for ending benefits have popped up across the country, with 10 Florida residents filing a suit against Governor Ron DeSantis over ending the additional $300 weekly.

However, a similar suit in Ohio was just rejected, according to the Cincinnati Enquirer.

The suits come after Biden’s Department of Labor essentially found that there’s no much it could do to step in and provide benefits for workers in states cutting them off. Instead, workers have been taking matters into their hands with lawsuits.

While many governors moved to end enhanced benefits in a proclaimed effort to get workers back into the workforce, preliminary evidence has shown that might not be the case. A study from Arindrajit Dube, an economics professor at University of Massachusetts Amherst, found that workers didn’t flock back to work after having benefits cut. And health concerns might still be keeping many at home: An analysis by economist Luke Pardue at payroll platform Gusto found that, of the states that cut benefits early, workers returned in states with higher vaccination rates – but didn’t come as back as quickly in less-vaccinated states.

Are you unemployed and have a story to share? You can contact this reporter at jkaplan@insider.com.

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There’s ‘little sign’ that ending unemployment benefits early pushed people back to work, JPMorgan says

unemployment insurance weekly benefits stimulus checks recession job losses coronavirus pandemic
Carlos Ponce joins a protest in in Miami Springs, Florida, asking senators to continue unemployment benefits past July 31, 2020.

  • Over half of the states in the US have ended federal benefits ahead of their September expiration.
  • Many governors cited the enhanced benefits as keeping workers out of the labor force.
  • But a JPMorgan note says there’s little sign that cutting off benefits brought workers back.
  • See more stories on Insider’s business page.

Over half of the states in the US have opted out of federal unemployment benefits early, citing the programs as potentially fueling the current labor shortage.

But that doesn’t seem to quite be the case. A Friday note from JPMorgan researchers Peter B McCrory and Jesse Edgerton looks at the impact on unemployment claims and spending following states officially opting out of their benefits.

They find that there’s “little sign of any differential improvement in unemployment claims or in several spending and activity measures in these states.” There’s perhaps a little jolt in spending on restaurants – which could be chalked up to workers returning to staff up eateries – but even that estimation might still be closer to no effect.

A previous note from JPMorgan said the decision to cut off unemployment benefits ahead of their scheduled expiration in September was “tied to politics, not economics.”

The role that unemployment benefits ending has played in getting more people to work is murky. For instance, The Wall Street Journal reported in late June that the number of UI recipients was falling in states that opted out early, but Insider’s Ayelet Sheffey reported that May saw strong job growth while enhanced benefits were still in place. June also saw major payroll additions, but the unemployment rate actually went up that month. All in all, the broader impact on the labor situation is still a bit of a question mark.

On the other side of the equation are the 4 million Americans who will see some or all of their benefits cut off early. Two federal programs extended who’s eligible for unemployment benefits – notably bringing gig workers into the fold – and extended how many weeks workers were eligible to receive benefits. In many states, those programs are winding down completely this summer, leaving workers without any UI income. Workers have previously told Insider that the loss of those benefits will result in them losing their homes, or exposing themselves to risky work environments.

But some jobless Americans have struck back against benefits from being ended by filing lawsuits in several states. They’re already seeing some early wins, with judges deciding that benefits should be temporarily reinstated in Indiana and Maryland while the lawsuits proceed.

“I think it certainly has the potential to start more cases,” Andrew Stettner, a senior fellow and jobless-policy expert at the left-leaning Century Foundation, previously told Insider. “The legal argument made in Indiana was based on a set of components that were not unique to Indiana law.”

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Women and people of color are missing out on June’s celebrated wage and job growth

Unemployment benefits line
People line up to receive unemployment benefits.

  • June’s jobs report showed promising signs of recovery, with gains exceeding expectations.
  • But women and people of color are still seeing a different story as recovery continues.
  • More women rejoined the labor force, but the vast majority are unemployed.
  • See more stories on Insider’s business page.

June’s jobs report brought some surprisingly optimistic figures. The economy added 850,000 jobs, healthily beating expectations and signaling that recovery may be on the horizon.

But, as with much of the pandemic recovery, the economic benefits are still uneven. For women and people of color, the unemployment situation is much more disparate – and it signals who might still be getting left behind amidst recovery.

‘We’re still in a crisis’

Insider’s Joseph Zeballos-Roig reported that June’s unemployment rate for Black Americans increased from May. Latino unemployment also remains far higher than the national average of 5.9%.

Those elevated unemployment rates come as 26 states move to end federal unemployment benefits ahead of their scheduled September expiration, which will impact about four million workers around the country.

“I do think we’re still in a crisis, we’re still looking at really high unemployment rates, especially for Black women and Latinas again, and for Black men, it’s back in the double digits. So it’s 10% for Black men in June,” Jasmine Tucker, the director of research at the National Women’s Law Center, told Insider. “If white men were at a double-digit unemployment rate, we would not be talking about ending these unemployment benefits in these states. We just 100%, we would not be doing it.”

Broadly, 148,000 women rejoined the labor force in June, and, according to an analysis from the NWLC, women made up 47.6% of jobs gains. But rejoining the labor force doesn’t mean that all of those women have a job – it means that those women are actively working or looking for work. In fact, the NWLC found that 97% of the women who rejoined the labor force are unemployed; the same is true for just 12% of the 232,000 men who rejoined. Tucker attributes that to sexism, and women potentially being judged harshly for leaving the labor force to be caregivers.

According to Tucker, women will need to see gains at this rate for nine months to reach pre-pandemic employment.

“That’s only going to get us back to February 2020. That’s not going to account for all of the people – just population growth – all of the people who would have entered the labor force between February and now,” Tucker said of those hypothetical nine months of gains. She added: “It would get us where we were, but not where we should have been.”

Those unemployed female and Black workers may also be missing out on the wage growth workers have seen in the past few months; it’s growth that’s likely temporary, according to a note from a Bank of America research team led by Michelle Meyer. That could only exacerbate pre-existing wage gaps.

Black families were also already at an economic disadvantage coming into the pandemic, according to new research from the JPMorgan Chase Institute. They had 44 cents to every dollar white families held in January 2020; Latino families had 58 cents. Throughout the pandemic, people of color were disproportionately impacted by the virus itself – which came with its own economic burden.

The inequities that still persist are on the radar of the Biden administration. Labor Secretary Marty Walsh told Insider that “our work has to be more focused, more intentional” in creating opportunities for people of color.

“Certainly, the unemployment rate for communities of color and women remains essentially unchanged in this report,” Walsh said. “I think, and the president feels, that we have a potentially once in a lifetime opportunity to make some significant changes to the unemployment system, as far as for people of color.”

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Biden’s Labor Secretary is watching ‘very closely’ after Indiana tried to cancel federal unemployment benefits and a judge intervened

Labor Secretary Marty Walsh
Labor Secretary Marty Walsh.

  • Indiana moved to cancel extra unemployment benefits, but a judge has halted that.
  • Labor Secretary Marty Walsh told Insider he’s watching the situation closely.
  • The state has since said that it can’t start up those benefits again, HuffPost reports.
  • See more stories on Insider’s business page.

In Indiana, federal unemployment benefits ended early – until they didn’t. Biden’s Labor Secretary told Insider that he’s on the case.

After the state’s announcement that the $300 weekly benefits would end on June 19, instead of the scheduled September end date for the program nationwide, impacted Hoosiers brought a lawsuit against the state and won a preliminary injunction last week that would preserve benefits for thousands as the case proceeds.

But, as HuffPost’s Arthur Delaney reported, the state’s Department of Workforce Development “claims it can’t bring back the benefits.” Scott Olson, a spokesman for the agency, told Delaney in an email that Indiana is “is determining how to proceed because the federal programs in Indiana no longer exist after their termination on June 19.”

When asked if the Department of Labor has any plans to step in and ensure impacted Indiana residents receive their benefits, Labor Secretary Marty Walsh told Insider, “we’ve been in contact with the state, and we’re watching this unfold very closely.”

“I was actually in Indiana last week – I was at a vaccine site – and I was talking to a mother, with her son, to get vaccinated, and she talked to me about the unemployment benefit piece and that she was having a hard time finding a job,” Walsh said. He added: “We’re gonna monitor the situation as we move forward here.”

The case represents one of the latest attempts by unemployed workers to retain their benefits. Over half of the states in the country have opted to end their federal benefits early, cutting off workers throughout the summer.

Many jobless workers who were newly eligible for unemployment insurance under the expanded federal programs could now lose all benefits.

Broadly, 4 million workers will be impacted by benefits ending early. Some politicians and advocates – including Sen. Bernie Sandershave argued that the Department of Labor is obligated to continue paying out Pandemic Unemployment Assistance (PUA), which made gig workers, among others, eligible for benefits. However, the Labor Department concluded it probably can’t step in and continue those payments in states that have ended the program early.

When asked about the impact that benefits ending early had on jobs, Walsh said that, “in the states that have threatened or have cut unemployment benefits, we have not seen an uptick of job searches.”

He added: “I think that what’s driving our economy is not the threat of cutting unemployment benefits. What’s driving the economy is confidence in people coming back to work.”

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A Nevada man reportedly waited 7 months to get unemployment benefits, but he was evicted and died months later

uber passenger driver
  • A report from Bloomberg Businessweek found half of those who applied for unemployment didn’t get any.
  • One recipient, Ralph Wyncoop, applied in May 2020 and only got them the following December.
  • After having a heart attack and losing his home, he moved into his car. He was found dead in March 2021.
  • See more stories on Insider’s business page.

Millions of Americans applied for unemployment benefits during the pandemic and either didn’t get them or had to wait for months, according to a new report from Bloomberg Businessweek. Half of applicants either got rejected or didn’t get them, the report said, and the wait was deadly for some.

One person profiled, Ralph Wyncoop, was an Uber driver in Las Vegas who was rejected from regular unemployment. He applied to the Pandemic Unemployment Assistance (PUA) program, a federal program that expanded unemployment insurance eligibility to gig workers, which opened in May 2020. Wyncoop was eligible for $455 a week, but he didn’t receive the money right away and ended up joining a lawsuit.

Eventually, his PUA application was rejected in July; Leah Jones, one of the lawyers working with him, told Businessweek that he was told he needed to show a utility bill, but his landlord had paid that expense.

Relief didn’t come for Wyncoop until the day before Christmas, when benefits finally arrived. In the interim, he had a heart attack over the summer, and was evicted in October. Technically, a national eviction moratorium is still in place through the end of July 2021, but Businessweek reports that he slept in his car following his eviction. On March 17, according to the report, Wyncoop was found dead in a motel.

Wyncoop was one of millions who found themselves at the mercy of a patchwork unemployment system. The report found that only half of the 64.3 million Americans who applied for benefits from March 1, 2020 to March 31, 2021, were either turned down, or never received money.

Many Americans found themselves staring down ailing state unemployment systems as the pandemic ravaged the economy. Insider’s Nick Lichtenberg and Allana Akhtar reported in September 2020 that at least 35 states had struggled to get benefits out to workers, as state-run systems were overwhelmed by an unprecedented number of claims.

Some senators have seized on these state-system failures to call for permanent reforms to the UI system, with Sens. Ron Wyden of Oregon and Michael Bennet of Colorado introducing a plan that would beef up benefits and modernize the system’s infrastructure. Such legislation has not yet passed in Congress.

Even as some jobless workers struggled to access any aid, over half of the states in the US have opted to cut off enhanced federal benefits early. That decision – which governors have said is meant to compel workers back into the workforce amidst labor market tightness – will impact an estimated 4 million Americans. For many of those who are on programs like PUA, which made gig workers like Wyncoop eligible for aid, benefits will end completely.

There may be some relief for those workers getting cut off, though: A judge in Indiana recently granted a preliminary injunction in a lawsuit brought by cut off workers against the state. That decision may preserve benefits for thousands of jobless Hoosiers.

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An Indiana judge just preserved extra unemployment benefits for thousands

GettyImages eric holcomb
Indiana Gov. Eric Holcomb.

  • Indiana’s early end to unemployment benefits is on pause after a ruling in state court.
  • A judge granted a preliminary injunction in a lawsuit brought against the state.
  • Jobless workers in other states have brought similar suits over benefits ending before September.
  • See more stories on Insider’s business page.

Indiana residents were set to see their unemployment benefits cut off, but that just changed after a ruling in state court.

On Friday, Judge John Hanley issued an order in a lawsuit brought against the state by residents due to lose their benefits. The firms had requested a preliminary injunction that would pause the expiration of benefits as the case progressed.

“Indiana law recognizes the importance of these benefits. Indiana law requires the State to accept these benefits,” the decision said. It concludes: “Indiana shall notify the US Department of Labor immediately of its continued participation in the CARES Act programs pending further action by this Court.”

Benefits in Indiana were set to expire on June 19, meaning that recipients likely couldn’t file for continued benefits this week. The state was halting its participation in all federal benefits, including programs that expanded eligibility for unemployment and the number of weeks they can be received. Those programs are Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC); jobless workers receiving aid from either were set to lose all of their benefits.

“Continuing the expanded unemployment benefits is meaningful to our clients and Hoosiers across the state who have relied on this assistance throughout the pandemic,” co-counselors Jennifer Terry of Indiana Legal Services (ILS) and Jeffrey Macey of Macey Swanson Hicks & SauerMacey Swanson, the two law firms that brought the suit, said in a statement provided to Insider. “While there will be further legal proceedings in this case, we look forward to the state following the judge’s orders to reinstate the benefits for so many in need right now.”

Andrew Stettner, a senior fellow and jobless policy expert at the left-leaning Century Foundation, told Insider on June 15 that 66,000 Indiana residents were on PEUC and 111,000 were on PUA.

Stettner gave “kudos” to the judge for Friday’s decision in a statement to Insider, saying that Hanley’s decision was a recognition that the purpose of the state “is to reduce harm” on the unemployed.

So far, 26 states have moved to prematurely end their participation in federal unemployment benefits, which are currently set to expire in September. Workers in Texas and Maryland have also filed lawsuits against the state over the decision to end benefits prematurely.

Are you an unemployed worker with a story to share? Email this reporter at jkaplan@insider.com.

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Half of the people who applied for unemployment didn’t get it, new report says

Jobless claims
Hundreds of people line up outside a Kentucky Career Center hoping to find assistance with their unemployment claim in Frankfort, Kentucky, June 18, 2020.

  • Bloomberg Businessweek found that millions of American didn’t get unemployment they applied for.
  • Some applicants were rejected outright, and others simply never received payment.
  • Politicians have called for unemployment reform, but no legislation has passed yet.
  • See more stories on Insider’s business page.

Throughout the pandemic, unemployment benefits have taken on a newfound prominence as millions of Americans found themselves jobless – and newly eligible for expanded aid.

But while it’s no secret that some states were bogged down with administrative issues for getting that aid out the door, a new report from Bloomberg Businessweek tracks just how many Americans didn’t receive any assistance amidst the economic devastation of the recession.

According to Businessweek’s estimate, based on a review of Department of Labor data, 64.3 million people applied for benefits from March 1, 2020 through March 31, 2020, and half of them were either turned down or never received any. That’s double the rate of denial during the Great Recession.

Broadly, the report estimates, at least 9 million Americans weren’t paid benefits who applied for them. The likelihood of receiving benefits seemed to also depend on what state you were in: The report found that 89% of those who applied for benefits in Montana didn’t get them, while over 70% of those making claims in California did. One in three applicants in Indiana got benefits.

The amount that someone can receive in benefits also fluctuates state-wide, with additional federal assistance serving to level the playing field somewhat during the pandemic.

“Unemployed workers really had totally different qualities of life, totally different standards of support based solely on where they live,” David Cooper, a senior economic analyst at the left-leaning Economic Policy Institute (EPI), previously told Insider.

Some progressive politicians have pointed to the widespread adoption of pandemic-era unemployment relief measures as evidence that the system should be reformed. The White House put unemployment reform language in its second infrastructure proposal, which has yet to result in a Congressional bill yet.

Unemployment fraud has emerged as a major concern for some, with billions potentially going into the wrong hands. Senators have even proposed offsetting the cost of the bipartisan infrastructure deal by repurposing UI fraud. But, as Businessweek reports, “many states can’t say how extensive” fraud is, and “haven’t reported numbers to the federal government.”

Many Americans who did receive unemployment benefits will see them end soon. Approximately 4 million jobless Americans will see some or all of their benefits end before September as mandated by federal law, as governors in 26 states opted out of federal programs in an attempt to get people back to work.

One of those impacted workers is Keysha Dempsey, 35 years old. She’s in Florida, where the additional $300 in weekly benefits winds down tomorrow. She said that she had issues with her account being locked due to fraud, despite not changing any of her information.

“When I was on unemployment in 2015, I didn’t go through half of what I went through with them right now. It didn’t take me six, seven months at a time just to get my benefits,” Dempsey told Insider. “If they had any issues, they had any questions, they were done, it was done.”

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Democrats and Republicans want to fund infrastructure using federal unemployment benefits yanked from workers

GettyImages protest dc covid-19 stimulus relief
Demonstrators rally near the Capitol Hill residence of Senate Majority Leader Mitch McConnell, R-Ky., to call for the extension of unemployment benefits on July 22.

  • President Joe Biden threw his support behind a bipartisan infrastructure package on Thursday.
  • But that package doesn’t contain funding from tax hikes, as he initially proposed.
  • It would be partially paid for by targeting unemployment fraud and unused federal unemployment funds.
  • See more stories on Insider’s business page.

President Joe Biden has thrown his support behind a $1 trillion bipartisan infrastructure deal focused on roads and bridges – and part of the spending would be potentially offset by unused relief funds and targeting unemployment insurance fraud.

Repurposed federal UI will account for $25 billion of the deal’s pay-fors, a person familiar with details of the plan told Insider. The bulk of the funding from UI will come in the form of “unemployment insurance program integrity,” which will provide $80 billion in revenue.

“It’s the fraud. It’s the fraud from UI,” Sen. Jeanne Shaheen (D-N.H.) told Insider when asked about the inclusion of unemployment insurance in the funding. She added: “Apparently, there are several reports that talk about significant fraud in the UI.”

Sen. Joe Manchin, a key moderate, said the deal wouldn’t detract from enhanced UI. “There’s an awful lot of fraud in UI that can be repurposed,” Manchin told Insider.

Previously, Sen. Shelley Moore Capito – a major GOP player and negotiator – had floated repurposing unemployment funds from the states ending federal early benefits early to pay for an infrastructure package. That seems to have garnered traction among lawmakers.

Andrew Stettner, a senior fellow and unemployment expert at the left-leaning Century Foundation, cautioned that legislative details still needed to be ironed out. He also said there’s a risk people could lose jobless aid they’re entitled to if anti-fraud prevention policies are poorly implemented.

“There’s been certainly a surge in organized crime activity in the UI system that has led to a lot of fraud,” Stettner told Insider. “The thing that we have to be concerned about: Are the mechanisms that are being put in place to try and prevent that fraud? Does it lead to unfairness in the system? Are people being wrongly implicated in fraud? We’ve had a lot of cases with that.”

At least 26 states are prematurely cutting off federal unemployment benefits this summer.

Many of the states opting out are ending all federal benefits, including programs with expanded eligibility. That means thousands of workers will lose – or already have lost – all benefits completely. So far, a dozen states have ended their benefits, cutting off somewhere between 400,000 and 500,000 people.

Now, lawmakers are proposing that those severed benefits be used to fund new infrastructure spending, rather than tax hikes on America’s wealthiest and its large corporations.

Overall, about 4 million Americans will see their benefits end ahead of schedule. Federal programs are set to end nationwide in September, but several governors have opted to cut off their benefits in an effort to get workers back into the workforce – although the current labor shortage may also be driven by lack of childcare, or a mismatch between open roles and unemployed workers’ qualifications. As Insider’s Ayelet Sheffey reported, job searches were actually down in states ending those benefits early.

“This is not because the government – because the world – is suffering from people not returning to their jobs,” Keshya Dempsey told Insider of the decision to end benefits prematurely, which will cut her off as well. The 35-year-old Dempsey lives in Florida, where the $300 in extra weekly benefits will end on Saturday.”This is political. It has always been political.”

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There’s a simple solution for the labor shortage: raising the minimum wage, a former Obama economist says

McDonald's fight for $15 wage
An employee of McDonald’s protests outside a branch restaurant for a raise in their minimum wage to $15 an hour, in Fort Lauderdale on May 19, 2021.

  • The economy is reopening but millions are still jobless as openings sit at record highs.
  • In response to this ‘labor shortage,’ 25 GOP-led states are ending federal unemployment benefits early.
  • Ex-Obama administration economist Heidi Shierholz says the minimum wage should go up instead.
  • See more stories on Insider’s business page.

Everywhere you look in the economy, there seems to be a shortage. The important things missing from shelves can be explained by factors like backed-up supply chains and a shipping crisis.

But another shortage that’s emerged – with increasing prominence as America’s recovery continues its long and winding path – is labor. Millions of workers are still out of work, even though businesses are reopening and want to hire.

One solution has to do with wages, and simply whether they’re enough to get people to do certain jobs after a pandemic. May’s jobs report showed wages on the rise for leisure and hospitality workers, but also showed workers quitting at the fastest rate documented in 20 years. While they saw significant pay jumps – by 7.2% from January to May – that only brought average hourly earnings up to $15.68.

“The wage growth that we’ve seen, say in leisure and hospitality, over the recent months, it’s so little more than just getting those wages in that industry back to where they would have been if COVID hadn’t happened,” Heidi Shierholz, the director of policy at the left-leaning Economic Policy Institute, told Insider. She said talk that such workers are getting more leverage may be “overstated,” and it probably won’t be sustained or permanent.

GOP governors in 25 states have decided that it’s too much leverage anyway, and that federal unemployment benefits in place for much of the pandemic have run their course. They’ve moved to end them months before their September expiration in President Joe Biden’s stimulus. It’s a decision that JPMorgan said is “tied to politics, not economics,” noting that many of these states didn’t have more job openings than jobless people.

Shierholz, a veteran of the Obama administration as chief economist at the Department of Labor, said broad reform is necessary in the labor market, and raising the minimum wage is a key aspect. That could both bring workers back and let higher wages stick, even after enhanced unemployment benefits taper off in September.

“That’s smart, and it’s good economics,” Shierholz said. She also said that things like passing the PRO Act – legislation that could both strengthen unions and offer greater protections to nonunionized workers – would aid recovery.

Shierholz previously told Insider that prematurely ending unemployment benefits could stifle the recovery, especially since workers receiving those benefits are putting that money back into the economy. She said that if the concern is higher benefits keeping workers from work, ending benefits may not be the best route.

“You could quote unquote ‘deal with that’ by cutting off unemployment insurance benefits, which has all these terrible implications” – like stifling recovery and leave millions without income – “or you could do something like raise the minimum wage,” she said.

Boosting wages to $15 may be helping with hiring and retention

Anecdotal evidence suggests that the businesses that did raise wages to $15 an hour succeeded in luring in new workers and boosting morale while cutting turnover. The Washington Post’s Eli Rosenberg spoke with several business owners who had done just that. Progressives have long wanted to raise the federal minimum wage to exactly that $15-per-hour number.

At the 5th Street Group – which owns several restaurants in Charlotte and Charleston – raising starting wages to $15 an hour, and enacting new tipping measures for staffers who aren’t normally tipped, helped the group go from being 50% to 60% staffed to nearly fully staffed in a matter of three weeks, according to the Post.

However, the likelihood of a $15 minimum wage being enacted anytime soon is low. Progressives led by Sen. Bernie Sanders pushed for its inclusion in President Joe Biden’s American Rescue Plan, but the measure ultimately didn’t survive under reconciliation rules. Eight Democrats voted against it, signaling even party-line support was not quite there. Talks on what, exactly, a minimum wage hike should be have also stalled recently.

The federal minimum wage is still $7.25. Although the above map shows that many states have opted to increase the minimum beyond that level, several remain at the federal rate.

Rhode Island recently passed a bill to raise the minimum wage to $15 by 2025, becoming the ninth state to pass a $15 minimum wage.

“Take a look at nationally – right now, states that are taking away the unemployment benefit of $300,” Gov. Dan McKee said in a press conference after signing the minimum wage bill into law. “Those states are at $7.25 cents an hour. So Rhode Island is a leader on this.”

But while raising the minimum wage might be key to an equitable recovery, according to Shierholz, it doesn’t look like the proposition is going anywhere anytime soon – even if it could help solve the labor shortage that’s holding back a full economic recovery.

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As the White House lauds falling unemployment claims, a former Obama economist says benefits must stay in place to ensure a full recovery

Now Hiring man with mask
A man wearing a mask walks past a “now hiring” sign on Melrose Avenue amid the coronavirus pandemic on April 22, 2021 in Los Angeles, California.

  • Jobless claims just dipped again, reaching a new pandemic-era low.
  • The White House is lauding signs of recovery, but prematurely ending unemployment could hurt that.
  • One economic expert said that ending benefits now would hurt both workers and recovery prospects.
  • See more stories on Insider’s business page.

Thursday brought two big numbers for the American economy: Another significant rise in inflation, and the lowest level of weekly jobless claims since the onset of the pandemic.

They show the paradox that is the current economic recovery. Goods are still getting pricier – although inflation shows signs of cooling down soon – and fewer people are losing work and remaining on unemployment. The White House says its recovery plan is working.

In a statement, Brian Deese, the director of the National Economic Council, said the recent economic data “reinforce that US fiscal policy and vaccination progress are positioning the economy for growth and job creation.” Deese also noted that the jobless claims come “as independent analysts project that economic growth in the United States will outpace growth for our peer nations and reach the fastest pace in nearly four decades.”

On Wednesday, a day ahead of the jobless data release, Heidi Shierholz, the director of policy at the left-leaning Economic Policy Institute and an Obama Labor Department veteran, broadly agreed with Deese.

“Things are getting back to normal,” Shierholz told Insider. “I think the key is we don’t want to make drastic policy changes at this point.” When it comes to relief and recovery measures for this recession, “we are doing it so right,” she said. But she warned that could still change.

Shierholz said she expects to see a quick bounceback and strong recovery, but changing course could threaten that. “If we start pulling back with those measures now, we’re going to just cut that off at the knees,” she said.

One thing that could weaken the recovery is the move to prematurely end federal unemployment benefits in 25 states, where GOP governors cited labor shortages as a reason to pull the plug on benefits and get workers back. Both the jobless claims and May’s jobs report show the recovery happening even with enhanced benefits. As Insider’s Ayelet Sheffey reported, payrolls saw a strong increase even as benefits remained intact.

The decision to prematurely end unemployment benefits will impact about 4 million workers, according to an estimate from Andrew Stettner at the liberal-leaning Century Foundation. Some of those workers, who receive benefits through federal programs that expanded both the eligibility and duration of benefits, will lose all benefits – not just the additional $300 weekly.

Some advocates and politicians have argued that the Labor Department is legally required to continue to pay out Pandemic Unemployment Assistance (PUA), which expanded eligibility for benefits to gig workers, among others. However, the Department of Labor has concluded it’s probably unable to pay those out.

The White House has signaled acceptance for benefits ending. Last week, White House Press Secretary Jen Psaki said the GOP-led states that are cutting off benefits “have every right” to do so.

Shierholz said many people that have been unable to find work or are unable to return due to health concerns. Cutting off benefits would also cut off the money those people have been spending in the economy.

“Cutting them off too early deeply unnecessarily increases human suffering,” she said. “It also weakens the recovery.”

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