Unemployed Arizonans set claims record for federal aid

Arizonans filed a record-high number of claims for expanded federal unemployment benefits leading up to what could be the final week of the program in its current form.

Arizonans filed 249,000 initial claims over the week ending July 18 under the federal Pandemic Unemployment Assistance program, which pays a $600 weekly supplement in addition to what jobless individuals receive from the state.

Those figures, provided by the state Department of Economic Security, were up from more than 230,000 PUA claims in Arizona during the week ending July 11 and represent the highest total so far.

The federal program began earlier this year to ease financial pressures for workers suffering layoffs or reduced hours from COVID-19 and economy-shutting measures to contain the pandemic. It expires July 25.

In addition, Arizonans filed 24,973 initial claims in the latest week for state benefits that max out at $240 a week. Claims for these lower benefits have been fairly steady for the past couple of months. Arizona benefits aren’t affected by the federal expiration date.

The question remains if Congress will act to expand the federal jobless

supplement, along with deciding whether to authorize another round of stimulus checks or additional assistance to businesses, state and local governments, or other entities.

Some form of extended federal jobless aid is considered likely, but an agreement hasn’t been reached yet on how much will be paid in benefits, and to whom.

“Even in a highly polarized environment, it is likely that a bill will be passed as neither political party will want to be blamed for sinking a bill containing much-needed relief,” wrote David Kelly, chief global strategist for JPMorgan Funds in a commentary.

“Even in a highly polarized environment, it is likely that a bill will be passed as neither political party will want to be blamed for sinking a bill containing much-needed relief.” David Kelly

Chief global strategist, JPMorgan Funds

Will the $600 a week still be available?

The House of Representatives, controlled by Democrats, passed the HEROES Act earlier this year. That legislation would maintain the current $600 weekly payments.

Republican leaders in Congress have proposed reducing the amount so as not to disincentivize certain people from returning to work.

Negotiations continue in Washington. David Wells, research director at the Grand Canyon Institute in Phoenix, said he expects the ultimate package might amount to a compromise benefit somewhere around $400 a week.

Another unknown revolves around when the legislation might be passed and implemented. That might not happen until well into August, which could put financial pressure on millions of jobless people even if benefits are paid retroactively.

“People still have bills to pay,” Wells said.

The Grand Canyon Institute released a report Wednesday urging Arizona to update its own unemployment insurance program. At a maximum of $240, weekly benefits here are the secondlowest in the nation, exceeding only the $235 weekly payments available by Mississippi.

The report by the a self-described centrist think tank claims that Arizona’s meager jobless payments have cost the state between $1 billion and $1.9 billion in lost economic activity since April. In most states, unemployment insurance programs are designed to replace about one-half of lost wages for typical workers, Wells said. But in Arizona, the benefits replace only about one-quarter of lost wages.

Also, Arizona provides little flexibility for people when their job income is reduced, the report continued. In other words, Arizona doesn’t offer much in the way of an “earnings allowance” — the amount of money people can make before jobless benefits are reduced. This is relevant for those who return to work part time, the institute noted.

This combination of a low benefit cap and a low earnings allowance leads to a complete benefit disqualification for between 50,000 and 110,000 Arizonans each week, which wouldn’t be the case if they lived in most other states, the report said. Roughly 90% of this assistance, if provided, would have been paid by the federal government.

The institute called on Gov. Dougr Ducey and state legislators to update Arizona’s unemployment insurance system, calling it “one of the worst in the nation.”

New Arizona-only claims mostly flat

The Department of Economic Security said initial claims under both the federal and state programs amounted to nearly 274,000 for the week ending July 18, a record-high total.

Continuing (as opposed to initial) claims under both programs in Arizona came to 3.03 million, another record, for the week ending July 18, with the federal Pandemic Unemployment Assistance program accounting for 2.79 million of those.

The department cautions that there might be duplication in the counts between the state and federal programs, possibly because of people filing claims multiple times out of confusion, frustration or for other reasons.

That new claims for Arizona jobless benefits have mostly leveled out in recent weeks might indicate Arizona’s tourism sector hasn’t been hit as hard as those of many other states, said David Shideler, chief research officer at Heartland Forward, which tracks economic activity in middle America.

In part, he said, this might be because many tourists come to Arizona mainly to see the Grand Canyon and other outdoor attractions, for which social distancing isn’t as much of a concern compared with, for example, museums, theme parks and other more urban attractions.