The Department of Labor reported this morning that another 1.4 million Americans filed for state unemployment benefits in the last week. New numbers mark the first increase in the weekly tally in the past three months. In addition, about 975,000 workers not qualified for state unemployment benefits signed up for Pandemic Unemployment Assistance (PUA). The spike in claims reflects the continued economic hemorrhaging wrought by the coronavirus pandemic as cases resurge across the country this summer.
The newest jobless cohort may nearly be the last to receive supercharged unemployment benefits through Federal Pandemic Unemployment Compensation (FPUC). While House Democrats passed an extension of the $600 weekly benefit in May, disagreement both with and within the Republican conference makes it unlikely that Congress will pass any renewal measure before the program expires at the end of the month. Republican leaders propose a drastic reduction booster benefits to just $400 per month—a far cry from the current $2,400 workers receive—out of concern that the current amount discourages Americans from returning to work. This runs against research showing that the disincentive effects of FPUC are negligible at best, and that a reduction in benefits will likely exacerbate the economic downturn. Indeed, according to a survey by FiveThirtyEight, a majority of economists believe that FPUC benefits should be either maintained or expanded above current levels.
Regardless, as a number of left-leaning policy groups noted to Congress yesterday, failure to pass any form of extension of FPUC will likely bring about “economic calamity.” According to the Century Foundation, around 20 million jobless workers are set to lose between 50% and 85% of their weekly benefits. As the New York Times reports, such a sharp reduction in disposable income will likely reduce U.S. GDP by about 2% and eliminate around 1.7 million jobs. The economic fallout would be particularly great in states such as Mississippi and Arizona, where state weekly benefits max out at a mere $215 and $240, respectively. Indeed, according to the Grand Canyon Institute, Arizona has already lost between $1 and 2 billion in economic activity since April due to the state’s miserly benefits scheme. Even a temporary halt in the FPUC is likely to wreak havoc on millions of households, as long delays for jobless claims in states like Oklahoma suggest that many families may have to wait weeks before booster benefits are reinstalled.
Although most economists rank unemployment insurance and state government assistance as the most pressing issues in the next stimulus package, Senate Republicans and the White House are focused on other elements of the relief bill. For his own part, President Trump continues to call for a payroll tax cut in the upcoming legislation. While payroll tax reductions have previously served as an easy fallback measure to stimulate the economy, multiple factors in this year’s pandemic downturn make similar cuts unlikely to prove helpful. At the same time, Senate Majority Leader Mitch McConnell (R-KY) has remained adamant that the package include a COVID-19 liability shield for employers. The Republican leader’s intransigence on the issue comes despite employers’ lack of liability for various COVID-related workplace perils. Some have even gotten around the issue entirely by requiring furloughed workers to sign binding arbitration agreements before returning to work.
While reports of coronavirus-related lawsuits are greatly exaggerated, some noteworthy cases remain in the news. As Jon reported last month, the powerful Las Vegas Culinary Union filed a lawsuit in June against MGM Resorts International for failing to protect workers at several locations on the Strip. Having argued for a rare “reverse Boys Market injunction” against the company under § 301 of the Labor-Management Relations Act, the Union withdrew its complaint on Monday in favor of an “expedited” arbitration process. Yesterday, meanwhile, the Service Employees International Union (SEIU) filed unfair labor practices (ULP) charges against McDonald’s after managers at one San José location fired a longtime employee after she led protests for personal protective equipment (PPE).
As workers marched throughout the country this week, members of the National Labor Relations Board (NLRB) continued to weaken protections for concerted activity. On Tuesday, the Board ruled to expand employers’ right to discipline and fire workers for profane and bigoted language. Specifically, the decision reinstates the burden-shifting framework established in Wright Line, 251 NLRB 1083 (1980), which had been supplanted over the years by a series of exceptions in the context of concerted activity.
Yesterday, presumptive Democratic presidential nominee Joe Biden unveiled a plan to spend $775 billion over ten years on child and elder care. The proposal would provide universal preschool to all three- and four-year-olds in the United States, construct new child care facilities, and create tax credits and grants to fund new child and elder care positions. According to the Economic Policy Institute (EPI), Biden’s proposal would likely create around 3 million new jobs (Biden himself estimates about 5 million). The former vice president’s plan could not come at a more crucial moment for the care industry, as many child- and elder-care businesses across the country are now teetering on the edge of collapse. The proposal forms the third part of Biden’s “Build Back Better” plan, which also includes a $700 billion economic nationalism program and a $2 trillion clean energy initiative. In addition to setting an ambitious goal to end carbon emissions, Biden’s energy proposal also calls for facilitating union organizing in the green-energy sector.
Of course, Biden’s are not the only worker’s rights proposals gathering steam this summer. On Tuesday, the Los Angeles County Board of Supervisors voted unanimously to empower local workers with the ability to form employee-led “health councils” for monitoring business compliance with local health regulations. The measure, which closely parallels the Clean Slate Project’s own work councils proposal, protects participating employees from retaliation and creates a program to train workers on how to recognize and report violations. With health officials already struggling to enforce workplace safety measures across the nation’s most populous county, joint analysis by the Berkeley and UCLA Labor Centers suggests that the measure could substantially promote worker safety with only minimal cost to businesses.
Finally, with an eye toward November, Sandal-maker Birkenstock announced yesterday that it will be giving all employees a paid day off to vote in the coming general election. The company joins a growing coalition of businesses encouraging employers to accommodate employee voting this year.