Debate on jobless aid to intensify as claims spike
WASHINGTON — A debate in Congress over whether to extend $600 a week in federally provided benefits to the unemployed looks sure to intensify with the number of people receiving the aid now topping 30 million — one in five workers.
The money, included in a government relief package enacted in March, is set to expire July 31. Yet with the unemployment rate widely expected to still be in the mid-teens by then, members of both parties will face pressure to compromise on some form of renewed benefits for the jobless.
Democrats have proposed keeping the $600-a-week payments through January in a $3 trillion relief package the House approved this month along party lines. Senate Republicans oppose that measure. They have expressed concern that the federal payments — which come on top of whatever unemployment aid a state provides — would discourage laid-off people from returning to jobs that pay less than their combined state and federal unemployment aid now does.
Sen. Rob Portman, R-Ohio, and Rep. Kevin Brady, R-Texas, are promoting a plan that would provide $450 a week for laid-off workers who return to their jobs, as a “back to work” bonus. This payment would also expire by July 31, though.
Larry Kudlow, the top White House economic adviser, said this week that the proposal is “something we’re looking at very carefully.”
Separately, Rep. Don Beyer, D-Va., vice chair of the Joint Economic Committee, has proposed reducing the $600 benefit to $300 in stages by the end of the year. This plan, Beyer suggested, would sharply reduce the number of people who are receiving more money from jobless aid than they would from working.
“If you solve that problem, there’s a good chance of extending unemployment,” Beyer said.
Typically, state unemployment aid replaces only about one-third to one-half a laid-off worker’s pay to encourage the recipients to seek new work. The $600 in federal benefits was added as a way to replace all of an average worker’s lost income.
But because those who have lost jobs since the virus hit are disproportionately low-wage workers, most of them are receiving more in unemployment aid than they did from their old jobs, economists estimate.
Shannon Conway, director of operations at R&L Hospitality Group in Richmond, which owns five restaurants and a catering company, said she and other restaurant operators have encountered reluctance from some of their laid-off workers to return.
That’s partly because of the $600-aweek in federal unemployment aid, she said. But another factor is the uncertainty about what the restaurant business will look like in the future, coming weeks and months, Conway added. It’s unlikely that servers will earn anything close to what they used to, she said.
“Recalling staff is definitely an issue,” Conway said. “Why would they give up a sure thing when they know we don’t know what’s going to happen through these early stages of reopening?”