Matt is joined by Employ America policy advisor Elizabeth Pancotti for a detailed discussion about unemployment insurance. They take on the recent expansion of the benefits, explain some of the difficulties in distributing them, and outline a possible road toward meaningful reform.
"Bennet Unveils Sweeping Proposal to Strengthen Unemployment Insurance Amidst Coronavirus Pandemic" (March 24, 2020)Guest:
Elizabeth Pancotti (@ENPancotti), policy advisor, Employ America
Matt Yglesias (@mattyglesias), Slowboring.comCredits:
Erikk Geannikis, Editor and Producer
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Because today's Elizabeth PEN, Cati from Employ America, we are talking about unemployment insurance, both in the context of the sort of current crisis. What it's done well, why hasn't done? Well, the legislation of the Cares act
but also in keeping with the sort of next four years theme. How can we reform this system? So they can work better in the future, so we can have more automaticity, so people can get their benefits easier, so we can keep in mind sort of moderating work structures. So this is a very weeds conversation, but I think a really interesting one. Ui is a super important lifeline when
musing crisis people's personal lives get difficult, but it isn't. So when we talk about it and in politics out, so I learned a lot from Elizabeth. I think you will from this episode
hello. Welcome to another episode of lies on the box media podcast network, I'm at Glacius my guest today is,
Elizabeth and coffee. She is a senior adviser at sea. Is a policy adviser. I made you senior, you could be senior at Employ America, which is a great group working
on full employment policy and it's all of its many dimensions. But I wanted to talk to her today about unemployment insurance, which is something that I think most of us don't think that much about in our sort of day to day it's not the sexiest federal program, but has been really important during this endemic and I think we'll continue to be going forward. So Elizabeth welcome to the show yeah thanks so much for having me, I
we'll say that I think right now, there's a push among the. U I nursed her, as you said, make you a sexy again, and so I will I will plug back here and in that it definitely is a program. I think we should be focusing on especially now, but also in these times, when you know twenty million people,
the programme exactly and I'm gonna Dealey. I think we'll get into this. If we can make the programme better, when there isn't a crisis, then it can function better during a crisis because it's it's hard to sort of rebuild the boat while you sailing across the ocean in a certain sum point, get kids
doc. I need a better sailing metaphor. The girls so likewise
I've learned. Is that there's a lot of past dependency in America? So it's often useful to know like we do things come from like? What's the what's the story of unemployment, ensure systematic, yes, said: the federal unemployment in Trans Programme, America, which is not so different from how it is now, is created in the same you know in the Social Security ACT back in nineteen, thirty five
actually a single state programme before that in Wisconsin a few years prior in nineteen, thirty two, which is always like a fun fact that this is a federal programme, but actually states had started to think about it. A little bit before the federal government took action was created back then in and it was intended in the crew
Sean each state would have their own system that they administer and so that right now there are fifty three systems. There are one for each day and then one forty
pretty Rico and virgin islands and then there's also like a railroad programme, a programme for
former military and informal federal employees, but typically we think about the fifty three state and and territories
I think that's a boy might so that sort of like a fateful choice. Why does Social Security ACT is starting up? They create old age and retirement programme, as a federal unitary
programmes but unemployment insurance, because I guess a couple states had taken the lead already becomes this kind of state right they with a federal element. Yeah I mean so it was intended to be a kind of aid. This system is part of that up where it so there is actually a federal and stay unemployment taxes in the current systems.
Food out, which is the federal Unemployment Tax ACT, and then there's is also an like. We kind of refer to those taxes, Escudo taxes and then at each stage they collect Suda taxes, STI Unemployment, taxes, and there is kind of this credit scheme in the back.
Send so that you know, if you, if you pay into your state systems in each state, taxes are a little bit different. You get credits as a business for whatever you pay into those for your federal taxes, and so the taxes
is about six percent overall by each state has kind of a different tack scheme, as well as a different benefit scheme, as well as a different administration skins,
Billy is even though there is kind of this central you, I system it's a quite decentralized welfare programme, unlike social security, even though they were in the same act, but it has that kind of social security structure where there's a lighter and earmarked tax for it, and will your benefits at least on some level are related to to watch
Hey, wait it it's it's a little like everywhere and structures yeah, it's a little bit different, though, because they're not employ ye wage taxes like, for example, when you see your pay,
stub. Every week you see a line item four euro employ you paid social security taxes, and that varies based on your earnings. Whereas for you I it's an employer or say tax, except for like two states that have a very small in place. I tax that are relatively new, but in that you know, the vast majority of people won't ever see a dime that they pay into the unemployment system its instead wage.
Players and in a lot of steeds those taxes very by something called experience ratings, and that's it you're, an employer that route
he lays people off and your using the. U I as an insurance, a you know, if your using the? U S, system as an insurance system for longer workers off you kind of get dinged on me.
And for paying few
you know paying less into it than you pay out of it to your workers and, as a result, I think take up is much lower for unemployment. Rather, you know compared to social security, because people don't feel as entitled to those benefits, because you don't see yourself as paying into them
idea there is that the concern you said I don't know what like an employer and seasonal industry might be
kind of routinely doing lay offs during the low season and telling
people know it's. Ok, like you can collect your unemployment. I think, to some degree, I think it's also just like, if you're an employer, relying on it sort of a car insurance. If you routinely wreck your car and use your car insurance
over and over you pay a higher premium and so is the same sort of deal. If we think of this as an insurance system, you as an employer pay a higher.
Premium to be able to use that system. More. Ok, right, where's, like in social security, it's like if I'm healthy and I eat vegetables- they don't like tax me more than I can either those that have you a wrongfully you're.
Call wife. We we might want to meet a wager higher social security tax on your because you might live until you're a hundred and three and we pay a lot more social security benefits you but yeah. It's it's not
way very unhealthy just to be doing so in the right things in my country, we, as though it is, I mean I guess this sort of ties in to sort of the tax structure, and we can. We can talk a little bit about that. But basically, if you, the first, is about six percent of the first twelve thousand dollars that an employer pays a worker, and so, if a worker, you know worked over taught, you know or more than ten thousand dollars from a single company, the taxes that would be paid on that worker into the system are seven hundred and twenty dollars per year and we're talking about an extremely well amount. I mean this is this: is pennies compared to other programmes that employers pay into or than employees? Pan too
it finds you know in typical times. That's totally fine that funds all the benefits that are paid out and when you hit a recession and ten million people are claiming you I benefits for twenty six weeks. Our longer it does not even become close to covering the costs of the programme jewels.
If you assume the economy's humming along guy, every people- and I think about this, but like people get laid off all the time, even even if there's not a reception, that's just that's life right companies rise and fall. They did they. Women die, but the basic thinking is that in any given moms, the vast majority of people will be working rather than unemployed, so a low tax.
Cover benefits for the sort of handful of people on you. I, but then in a recession that really change yet thriving in a recession is both tied to the fact that more people are unemployed and thus claiming these benefits, but there also unemployed for much longer. If you look at length the average duration of unemployment during good times
You know it might be ten weeks and if you look at it right now, forty percent of workers have been laid off or have been unemployed for more than six months, and so, if your claiming those benefits for twenty six weeks, which that's the kind of modal number of weeks, that you're eligible for in any given state, there's a couple states with fewer but like on average, your eligible for twenty six weeks of state benefits, and then there are some kind of federal programmes that can and cares act. You know, is a big expansion of those that are all programmes and sorted some new ones, but you don't really. We kind of thing is like the maximum duration of unemployment during good times is six months
It's really when things start to change. So when you ve been unemployed for six months or longer, you sort of face a much higher risk of dropping out of the labour force entirely facing discrimination and in future jobs, and so that six month point is really pivotal in terms of both benefits in terms of like the long term effects of unemployment,
and do as a result everything about paying benefits out. You know the average benefit for unemployment at three hundred and seventy five dollars and you're paying that out, for you do five or six weeks will it take? Someone during you know very tight labor market to get a job. That is a very different benefit. You do cumulative benefit amount than someone who is cleaning three hundred and seventy five dollars for twenty six weeks or four hundred and thirty.
Weeks. A federal programmes are turned on, and so you know in normal times, it's totally find to find right, like, as you said, this handful of people who are unemployed for a short duration of time and in the universe
since when ten million people are claiming fur in the great recession was known as the ninety nine hours and those are the people who are unemployed for all ninety nine inner still unemployed after the ninety nine weeks of state and federal benefits, and there are tons of them, and so when people are unemployed for a year and a half or two year, as you know, you could imagine that the the cost of benefit to so much higher than that seven hundred and twenty hours could even begin to cover. So how does this work so for the federal government it just the devil's? It goes up and that's one of our are automatically stabilizers weeds. Weeds listener should should know about that. But but states can can't do that. So just states have to cut benefited sir,
That is something else like what what happened state to state you. Why, in these big downturns, fell the way that it works is that seeds can borrow from the? U I trust fund, which is kind of the big federal find where all of the taxes girl, and so they can go to the department
were in, say, hey, I can't pay out all my benefits. Can I have a loan to pay out my benefits and there are you not loan terms associated with those? Those sort of loan terms are actually quite interesting and that you know it's actually tied to the food, a tax credits that businesses receive, and so in fact, businesses sort of take some of the heads of states, borrowing,
so don't pay a a bit more in taxes and in subsequent years, while those loans are being paid off right now, as of January forth, there are forty six billion dollars in outstanding trust fund loans shared by about twenty states.
You can imagine that that number is not going to go down anytime soon and in the great recession you know sizing thirty five states borrowed from this thorough you, I trust, fund account and those loans were though I think the last state paid them off, and twenty eighteen or twenty nineteen like they had just been paid off, and so you, you know these. It took a really long time and I think each state sort of has different rules of like do. They regard these balances against balanced budget laws and kind of all sorts of things by in the aftermath of the great recessions or part of the.
Sort of post, great recession reforms for you. I were that in exchange for reforming you're. U I system, because this is what we are seeing now so is so kind of on background. For this. You know we saw huge wait times for payments. We ve seen huge call wait times for people trying to get into the U S system in this recession it we saw that you know
so in the great recession, and so Congress said. Maybe we should you know, do something about this and kind of incentive by states to modernize their you, I systems, and so they gave the money in a in exchange for doing reforms in
the years after the great recession. We all two things. We saw a lot of states take that money and reform their systems, and you know either change there. I t systems are changed, their benefit structures or change. You know different different sorts of reforms that were that we're allow
for that grant money. Conversely, we saw a lot of states rollback their benefits and roll back, the funding for their state. You, I offices and real back the staffing for their state. You I offices of Florida is really good example of this. In two thousand and seven, there were huge reforms to the forty you I system that cut benefits and cut eligibility and funding and cut taxes.
Businesses and as a result
if you remember earlier this year, I guess now last year, floored as guy system didn't really
which, in time of great downturn, and so, if you think about like the response to our? U S, system didn't work and now or in a lot of debt. The response is not to pay off that debt by cutting you, I've benefits and, in fact, there's. You know research kind of suggest that cutting benefits really does nothing for the debt that you're. U I system is, then so be it these administrative issues I mean, I think, of loom very large and people's people's heads, but the basic structure, where are you
you get a different amount of benefits depending on what state urine and
and depending on how much you are earning previously waves of this, I got a concept of replacing some share of the wages that you were earning before. Right is again like an insurance style
system rather than lack payment to people up. I know it's hard to summarize because this fifty three different programmes, but I
it's what's the basic lay of the land, yet so in the vast majority of states, workers will get twenty six weeks and the kind of average replacement rate, as you put it so kind of the percentage of your weight of your pre lay off wages covered, are replaced by your you. I'd benefit is kind of on the on the average of about forty percent. Forty five percent
you know in practice. We know that many people are not able to access you. I, and so, if you like, took the percentage of people, if you like, included the zero for the people who can't access you I'd, be it would be down with so for the people who can access you, I kind of thirty five to forty five percent on average on the country is a sort of what Europe is now
Interestingly, what we learn this year is that that replacement rate is not so easy as having like literally a rate that you just multiply your prayers,
of wages, the! U S, systems are not built to just say: ok, we know what your salary was before you got laid off. Let's multiply it by point three five and we'll cut your check for that amount, and there were that simple. We we would have a very different cares. Act by you know, states introduce these. Like little technical math, things which, like you, know, pistol the nerds off we're a just like you, so there's this in holding your base period, earnings and so that uses
like some of the quarters of the last year and when she were employed, and so some states kind of just like manipulate that base period to where you know it would be if it would be more
and he just for you to use like the fourth quarter out verses. Just the three quarters out from your lay off. You know you might get a higher benefit in some states. Allow you till I use with called an alternate based period where you can like kind of change. The look back period
your wages and some states do not, and that can make a huge difference for some people depending on you know what you're employment situation, let's like before you got laid off another thing
is that there is usually a maximum benefit, and so that is you know if you're making five hundred thousand dollars a year and you get laid off you're, not gonna, get get thirty five. Forty percent of your wages covered by law. There is kind of a maximum
and each state- and that really varies by state in some states at sea, no, three or four dollars and in some states it's eleven hundred dollar
and so there there's no real consensus over what that should be, and you know so. You could say that state legislatures that those who could say that, like maybe they take into account what the cause
of living. It is in that state, or maybe they take into account that they like to save money on benefits. I think
early dependent on the state so like Massachusetts, has a very generous maximum benefit, whereas the Arizona Florida have varied, not draw as backs member offence, but it s a theory would be absent at some point. On the income spectrum right, you're dealing with people who probably have more savings,
the biggest, because hiring people say more and more access to credit right as a way to get through. This is a big difference between
You know if you, if you need to ride out a rough patch with like a home equity loan, verses, updating, lender who's gonna like ruin your lives forever, so it I mean it.
Some said, but you you, you alluded earlier to people who are not able to access unemployment that sets the isn't just administrative difficulty or is it that there's just like large categories of people who are not word like genuinely not eligible? But so I guess I've got to have a second group first, so that group was largely addressed this year by ip you, I or the Pandemic Unemployment assistance programme, which was part of a terrorist act, and so that programme was
on your mental inside of extending you. I benefits to a huge percentage of the workforce, and I mean if you look at the piano number, is clearly a lot of people are excluded by regular you, I, and so the people who are typically excluded from you. I our people who are either correctly or incorrectly classified as independent contractors or gig workers, but also part time, workers or low wage earners or jobs,
cruzio people who have graduated high school or college, or a looking for a job, there's kind of all of these groups who or people who don't have enough employment. History do if you just if you graduated college in May, and you got laid off from your job in August. You know you might not have learned enough to be able to
claim unemployment over the last few months, where such a wifi you have to have had a job of work did long enough to have paid over some threshold. Employers don't want to pay the taxes if they can get away with it right. So here I mean they pay the taxes on your wages, no matter why we're arm? Ok, so let's say that you graduated college in May twenty, twenty and new, somehow variable to find a job,
in May two thousand and twenty, and then that job said oh actually, there's a second round of business. Closure orders we're not going to be able to operate in October, so they said, run has gotten too bad. The governor shutting US down- and they lay you off in october- is very possible that you will not have met the kind of work history requirements of the earnings requirements in your state to qualify. However, let's say that you had like an on campus,
Oh you're, all four years in college, and then you kind of flowed into this job after you graduated. You would have enough work history to qualify for benefits and kind of the hit that your employer would take to their experience. Reading it could be in some states, it could be your previous employer in some states could be your current import. Kinder depends on on the state
Yeah, so it's less about like have you paid into the system and more about? Have you been around long enough that we consider you a worker who, like deserves benefits, and that there is a lot by state? But also here is your contractor right leg for social security? You still pay the tax and still get benefits, but for animals,
then you don't ride like if you have not. If I gotta do this podcast as a contractor now and if day, if they lay me, often unscrew yes, so if you you know it, the kind of we called my ten ninety nine of your income is from attending nine. Instead of a w.
The traditional employees on the tenaya. When you file your taxes, you pay into the fighter systems, are you pay and the medical and social security? You importantly do not pay into unemployment insurance and in some states have adopted paid leave you can pay into the state paid leave system. I don't think there's a single state where you can pay into the unemployment and
friends stem and so that a p way, for example, all those gig workers who are on p they're not paying into the p racism and they're they're, paying federal taxes, and it's coming out of a federal budget but they're not specifically paying and unemployment tax to access p. I listed a break and then appeal is a good time to two pivot into the Cares act as a whole,
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So often times during recessions, Congress well like extend the duration of unemployment benefits, but with the Cares act they did something different ripe and they made the benefits that they give you more money and the created. This is p way programmes so that people who would not normally be eligible could get the benefits and why? Why did this happen? If there wasn't there wasn't a ton of public discussion about it now, I'm in so I think if we I it's very weird till I remember
talk to those first couple weeks of March, but if we think back to like the before times right, no one paid attention in January February and four years, no one paid attention on Thursday mornings at eight hundred and thirty, a dot m to the jobless claims. Really so every week on Thursday morning deal releases the number of people in each state who have claimed unemployment in the previous week and no,
We pay attention. Those I mean if I like. I started watching industry recently and there is like a funny quip, where one of the traders on the floor builds a model to like predict the number
jobless. Claims were just so funny to me because, like really, you know, maybe traders were paying attention, but like normal people, weren't paying attention to jobless claims before this, and then we hit kind of the second week of March and jobless claims hit
you don't million the week and we got hammered with six hundred and fifty four million claim for it now or still in a million claims, for we can do almost a year into this, and so I think at that, like win Congress realize like okay,
business closures everywhere. Hospitals are, you know, super bad. You know everything shutting
and millions of people are unemployed. You know kind of kind of two responses, one was direct, so then, so then we got twelve hundred
checks and the other was like okay. Well, all of these people are unemployed. The replacement rate for the their wages is very low. Thirty thirty five. Forty five percent. That's not to be able to keep food on the table or keep a roof over your head and at the time I think there was a big concern about
increased expends like we're all spending, you know a lot more money. The grocery store cause like nobody could go anywhere in, there's is no school. Schools are closing. Swede school lunches was stuff, so
Senator widen and Senator Sanders, and a couple of centres got together and they said we should you super doll which was really cool on. They said you know. In addition,
It is kind of three hundred years. On average, the weekly payment is about three hundred and seventy five dollars and on average, the weekly wages for american workers are about nine hundred and seventy five dollars, and they said
He worked forty hours a week at fifteen dollars an hour, which is what we think the minimum wage should be that six hundred dollars and
Six hundred dollars again the magic number of like, let's just give everybody who's out of work, who should have been entitled to their wages, which were probably too low before the pandemic. To begin with, they said, let's give them six hundred bucks on top of their payments. For context and the great recession we gave them twenty,
five dollars a week. I mean this was a huge huge program and part of that thinking. Right is there a,
should all sort of pushing Paul among economists in thinking about unemployment insurance in a recession where
On the one hand, if you want to stimulate the economy, it's really good targeting to give money to people who lost their jobs, because you get.
They have expenses that they need to make an otherwise they're going to cut them. And you get in this sort of you know: downward downward spiral of spending in incomes
but is also always a school of thought that says. Well, you know if we make the benefits too generous. You know people are gonna, hang out play video games, Siena Porter some pieces and we want them to go
jobs right and end. So you know I mean people into a perennial argument. That sort of habit spoke
one of the things about the endemic, was that
There was a sense that you know jobs,
shut down for public health reasons. Did we wanted people to stay home and play video games like we didn't want them? You know at the lake service jobs getting infected or infecting other people, we sort of relaxed that concern and meet the programme much more generous to people. Up to the point where I mean a lot of people ended up with short of higher weekly take on pay than they would have.
A job that might pay eight or nine ten dollars an hour which was kind of weird. I mean I
I think it was certainly weird. It was super cool. I think, there's kind of this. There is a difference between stabilizing the economy and stimulating the economy, and this is like a very good picture of that, and so in stabilize the economy, we made sure that people are able to pay their ran. We made sure they were able to put food on the table. We made sure they were able to afford medications all that sort of stuff right, and we said if you ve, got an extra hundred or two hundred hours now that we ve, given you
You know this topped up payment, you know, go by an Xbox, go, get take out, stimulate your local economy and if you recall, if we look at consumer expenditure data from the months where the six hundred hours and please it was amazing, I mean, if you compare that too, like when the great recession happened and we took the huge dip, it was truly fantastic to stay. Not only did we stabilize the economy and not allow this like huge drop off in you know, consumer expenditures are seventy percent of GDP like if you lose that
You can lose the economy and we didn't lose that. As you know, we said you can affect people, you can't you know,
utilities off. Then they were continuing to pay the rent. They were continuing to kind of your shop, a grocery stores, all that sort of stuff like it was true,
a very good policy, a both stimulating and stabilizing american households and any economy. The problem is that when it expired in July, we didn't do anything more present.
Been acted. This kind of three hundred dollar thing for a couple of weeks by you know then from made October, so that three under our programme of six or seven weeks, parent or state. So in MID October, that re now and from October to this week, we did nothing to top off those three or four hundred dollar payments and at the same time, people were running out of their benefit. So we can. I mean we can talk about kind of benefit, extensions which are a pretty normal part of recessionary reaction policy, but we didn't top off those benefits at all, and so people went from making. Maybe a hundred and ten
sent of their wages to making thirty or forty percent and that the very big cliff to fall off. If you, if you want to look up, you know some like bad takes that I have you know
in the spring right. I had this incredible concern that the economy was gonna, take one big head sort of from virus
and then there will be a huge secondary as everybody who lost their jobs had to cut back all of their spending
but like the great success of this through October is that it was only a good time economically, because obviously there was this endemic going on.
But you really didn't see that secondary way, though my business
Is that were not close strayed like home depot and
Martin Amazon, like they all did you know you, like the local hardware, store across stripped from me, like they algae, crazy business, because people did in fact have money and they were able to go out and and do things and then in the late fall. You know really started to collapse, although hopefully come back here I mean, I think, so we got ATP Job servants of the jobs got Friday. As this, we can possibly a decline on Friday, and I think you know, economists I had been kind of shining from the rooftops. Other economies have been shining from the rooftops.
Like ok, if you do nothing for businesses and if you do nothing for workers, things will only get worse and winter in winter was coming, patios we're shutting down indoor dining with shutting down business. Closure orders were happening.
Everything was getting worse again and we're like we're seeing that now and it's you know, it's very scary, to think that we do all of this. You know how'd, we had. We had some sense of urgency kind of in October or in July, when this was happening, we could have really avoided a lot of the down for this going to happen. You know the Johnson that we seen for the last two months and it down tonight we're going to probably see for another two months before you're, as we had to see this new stimulus package,
again and before of Axion stuff like really ramp up to, what's which, what's in the new pact drivers? And finally,
at the end of the year, the politics worked and Aggress came together to extend some extra employment. What's what's in the new within the new deal
yeah, I mean, I think, maybe it was Christmas. I don't owe Andy's that nerve from this entry foundation. I put out this report to say that twelve million people we're gonna fall off a cliff the morning after Christmas, and I would like to say that, like you know, maybe we we kind of kicked it into their heads, but, like I don't know how they didn't realize. This is a problem before that report. So right before Christmas Day, they passes the elm and right after Christmas delayed from begrudgingly signed it, and so in a new bell. There are three hundred dollars a week at the same time
off that was in place, but now cut in half and an extension of eleven weeks for the programmes that kind of extend benefits or four p way that expands benefit eligibility and so rather than having a
maximum of thirty nine weeks on any given programme. Now, there's a maximum of fifty weeks and now to compare that at this point in the kind of great recession, the peak of the great recession, when the most people were, they were continuing claims of unemployment so that the people who are claiming unemployment was about ten million. More double that right now and we are at half the number of weeks that works and in the great recession- and so you you know at eleven weak extension, was great. The kind of previous draft of the bill, the mansion Romney proposal that had been talked about kind of two weeks before this adoration past would have extended a couple more weeks. You're looking at your fourteen or sixteen weeks and and
we got down to eleven. I would hope that, with the results of this week, Senate elections and with binding and and Harris coming and will see another extension of those things, but today they expire in MID March to write so Disan becomes a question right out, one god we we have this after the Georgia Senate results are in prison to live
binding heads committed in advance, the civic way, I think, to a sort of further covered relief package happening. I think he did it. He did like commit to two thousand, not checks. At least like me,
not to a whole package, he did commit to two thousand dollars right yeah we sent one of all to Senate. Yes, the checks were now at a point. Well, this is actually relevant because it constrains what you can do, because at this point, if Democrats don't deliver, two thousand dollar checks. They're, all going to look like idiots, I mean Mcconnell, looks like an idiot for not delivering them right before the Georgia said an election. So, yes, I think they look pretty dumb. If they didn't do it now, I don't think there's a chance of that Joe Mansion got on board with two thousand dollars checks right, like I think we're getting them right, and so this has always been a thing in
Congress ended. The one zero rate would like this. There was this whole genera flight viral tweets where people would say like these appendix,
and people are starving and, like all Congress, did, give us twelve hundred dollars and if you take one thing away from this, episodes that, like all Congress did for people who were continuously employ an for people who worked import like people who are unemployed, also got the czech slick,
for everybody Weber who saying that like, if you in fact lost your Congress did a whole.
Others say right away that I am going administrative problems. Yes, I think I did like a back of the envelope calculation and if you were a person who got the modal number of weeks from your seats at twenty six weeks, and then you got all the federal top off programmes and you got all the federal extension programmes and you are laid off at the very beginning. You have got like thirty thousand dollars. Rightly that's a lot more than just twelve, like those trees
be very mad because it wasn't just pull hundred and also we should take credit for the super at all. Like the superfluous sick- and we should like definitely take credit for it began very frustrating, but on the other hand I mean in talking to unemployed workers, who are now organised, thankfully, and who are like a really hounding Mitch, Mcconnell and an end Senate, Democrats and saying you know like you have to do it again, and I mean they are in a big part of the reason why we got the second
well. I'm sure that, like people, I'm sure congressional suffers a members which are so sick of their phones and there you know emails being hounded by these people, rightfully so like thankfully, but there were a lot about
as problems. You know in Georgia. We saw data this week that sad that eighty six percent of claims, once your approves the once a the way that kind of I guess we can talk about this with the way that you apply for you eyes. You get laid off you file and application with your city. They determine if you were in fact laid off or if you were fired or if you quit. You know the kind of adjudicate your claim and that can
That's supposed to take less than three weeks, but in many states it takes longer, especially now, so you do that they determine that your
the for you I and they give you a benefit amount, bigger eligible for and then
What takes a week or two for you to get that payment and your compensated for, like all of those
in which you are waiting. A normally for most states is about to two and a half weeks from like lay off the first payment now in Georgia. From that benefit determination point so twenty five percent of claims take long.
More than seventy days to say your eligible,
eighty six percent of claims take longer than fifty days to pay those out, and so you,
be waiting a hundred and twenty days to get your first payment in a state like Georgia and its not I mean it's all states rightly there is a great map where three, I think three or four states are meeting the leg. Federal regulations on timeliness decision and payments, like no states are getting money out the door within twenty one days. The way that they're supposed to- and so it's very possible
millions of people waited forty. Fifty sixty seventy days for those payments to go out and that only if you are able to access it I mean we know that claims were denied. We know that claims are. Alas, we know that backlogs were massive. We know, I think how their long reported this week, that a million people have still not received their unemployment claims and they ve been unemployed for six months are longer. It was not without its false that sad. You know that p way, spanning to millions of people who would have been eligible and that aspect kind of six hundred our top off we're like truly, very important and very expensive and very necessary programmes that were much more generous than the top of our tax and in this is just gonna, be the sort of thing going forward. Is it doing something like the Czechs will have three hundred fifty four hundred billion dollar price tag and I'll be cool? I mean it's no action promise. I think it's good for the economy, it's nice for people, but that's not enough for it
in whose lost their job needs continuing income until full recovery is underway, which you know we hope will happen in April, but might not ready mean it's this one of these things were Congress, sets these deadlines and the sort of guess it about what the course. Oh, it's completely arbitrary, their Reimer reason. It's like. Ok, we have a number that we want to stick to, or we have like a nice pretty date like the seventh. This is like you can tell their arbitrary, because for the care is acted
dates. They put them on the thirty first sub month, except for unemployment weeks end on Saturday or in New York on Sunday, and so indeed,
in setting the end dates to like the days when unemployment weeks actually end. They just picked the end of the month and it actually screwed people out of an additional. We could benefit and lily. You can tell their arbitrary for that reason, but yes, they are essentially, I mean, I think, when this was happening in March, when we were kind of doing the Cares ACT, nobody thought we would still be unless in December I mean we all doubts and home from our jobs for two weeks, like nobody thought this was really gonna, be a you know, year a year and a half long thing. That said, I mean, I think, maybe December thirty first was like a pretty generous timeline,
our minds at that point by you know. I don't know June and July. We like certainly should have realised that that wasn't gonna be enough and they didn't do anything until December. Twenty fifth right like so I did, I feel like the way this could go bad. Is they start with a headline number? Then they subtract with the Czechs? Are gonna cost it then you see what's left
I mean I don't think we should have headline not like. I think I think you wrote that I like living their clubs the other day, and I talk to you back in July, and you said you know what would the economy need, and I said I don't know one did you trillion and a minimum for a second bill and like an additive, someone else's marks and hear someone say something higher than me, and I think like AIDS, that, like these, these
arbitrary things are like. Ok, well spent a trillion dollars now and if we need more, we can always come back in a few kid. You can come back like an aura integrate recession. We didn't come back, and that was the problem, and here we had a month on, went so what they need. You do I mean if we want to pass a trillion dollar bill every month like instead of doing a twelve trillion dollar bill the outset, my Gulf WAR, but the reality is we're not gonna. Do that you're gonna get maybe one more attempt and that's it and so to say that, like there's a cat enough, if your mansion comes in and says, I won't vote for anything more than one trillion dollars and you subtract four hundred billion off that for an
round of checks. You know it's kind of saying screw you to schools and hospitals and transit systems into jobless workers and businesses live like we. Ve got this like small pot of money fight over it, and if we don't have to have small parts of money like we can have very big pots of money, you you do so. You know Joe, if you're out there. If you, you need to pick triggers that are based on some kind of conditions and then, if you want the overall project to below just tell people, the conditions will be met quickly, and I don't know maybe he s a guy. Every Irene, if we want to have the conversation about trigger scores, is an important line. So I mean I don't like this podcast. Certainly a lesser certainly are no stranger to automatic, stabilizers and employ America. That is like you know. We have like two sticks, no dirty sheltered and please do triggers, and I might my colleagues are gonna laugh and they listen to this, but I mean I like really is the like. When people ask me what years that's like pretty much summed it up, but I think for automatic stabilizers, especially in you.
We talked about it when he rose is happening at the end of May. So when House Democrats got together and they said we're going to do this massive three one slash two trillion dollar package we and Nmu do tons of other people said. Please don't set an arbitrary end date to these unemployment provisions. Please say until the labor market looks like it did in January, when it was tight and wages were growing and employment was like. I mean
we're still like somehow adding to it. Even though economist would have said we were at full employment, and we said please keep these provisions and please until we can get back to that kind of labour market, and they didn't do
because it costs too much like you. Ve got people like Richie Neon on ways and means, and Nancy Blue Sea, and, like all these people who are trying to like take a big coalition of people of differing to bans- and they said
triggers because this too expensive, so you say like so earlier you side, you know Joe of your listening. Tell people that triggers will be. The economic conditions will be.
Quickly and that's true, like stimulus will make them be met more quickly. That said this,
BO, doesn't you know that's not how the Cbo scores them and the Cbo is end all be all if you're kind of a voter like Joe Manchin on the floor, even if you're someone like Nancy Pelosi, you know if you care about the price tag of a bill to CVS
this is important and triggers, are very expensive. When unemployment and the number of people on you, I is high and right now that's true, and so as a result leg I dont know our trigger stand, but I would be smart. Smart policy, like it's very stupid, judge
keep kicking the canned under my message, because this is a problem right like this is why they need to do triggers is that they will tell you, while the bill
happening, mobile come back and do more. If we need to know whether that's true or not, you know depends on the vagaries of Congress, brain
But that means you are saying that your bill will cost more than the headline number like. You are promising me right that, like if the unemployment rate is still really high, we're gonna come back and do more help so like built, do do the trigger anyway. That's my that's my Serbia, I mean so we like a hundred and eighty members of Congress and onto the flutter to say like we should do triggers and then we didn't get them full, like. I think like there is consensus,
among a large part of the Democratic Party that triggers are smart policy and yet, when we get to building a bill, the people in the room say even though it smart, it's not politically feasible. I just I had a very vexing conversation with Nancy policies team about this, and I don't know
you know the ceo, you know it says: well, it's gonna say, but their interest rate forecasting is terrible, and sometimes you gonna do
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Every bottle back dot org. So I'm you mention is one of the big things right. I m anything. One reason why the authors of cares didn't turn into like big credit takers about the bill. Is that so many people had set frustrating experiences trying to
get benefits, and also some of this stuff was just like goofy.
Like you, alluded to this early, but does not like a spreadsheet somewhere where you can just increase the replacement rate
They had to do this slightly crude numerical thing, instead of just saying poor bumping everybody up to a hundred or ninety five or one o, five or whatever it is you want to do yet. We couldn't do a percentage top off. We had to do a flat rate top off
which is just weird and item it has cylinder with cobble yet so
A many of the state systems are antiquated because they ve been under funded for decades and as a result, many when the programmes were written in the emu
ninety is using a coding system that I think he would struggle to find. You know you can't walk in
Apple or Amazon in time cutters for these systems are you can't
Silicon Valley and finding no twenty five year old engineers to get help. You, and so, as a result, they say you know the thing that we could do with a flat rate amount, the thing that we can't do as a replacement rate, and so that's how we ended up with a flat rate amount by it, like you said, underscores kind of the fact that these systems are
in sham balls and have been for many years, and we knew this coming out of the great recession and we didn't you know, do broad structural reform. Instead, we gave states a bit of money to do a couple of things and and look where got
and so like State Sir States, are terrible in my opinion, died over recent months. Aids do anything. No I mean I guess this is
The lesson of all of these things is that you know politics goes back and forth right, like there's a pendulum. Different people are in power at different,
Times and when a moment arises to say: ok what we want to make unemployment insurance better.
If the way you structure that is you, give financial incentives to states to make the programmes better, then you just gotta hoping that that money will arrive in state treasuries at a time when whoever is elected in that state like wants to make it better right. You hope that leg governors look like Gavin New Thumb and stay. You know you, I departments, oclock Julie, sale and instead you got in all places like Florida, where the governor would be no problem
We hoped that the? U S system didn't exist entirely and got the whole thing right leg. It is truly a game of locking, like so places like Massachusetts and
Fournier do really great things, except we have fifty three
u, I jurisdictions and they do not all do great things, and it really is just like a game of chance weight in West Africa
worker, like as a worker you're just taking a chance of like do. I live in a good state or way, and a lot of these people I mean the they should have. You should respect them, to the extent that you recognise that Rick, Scott and Scott Walker and some other good like this, they actually have like a very principled objection to unemployed workers. Getting benefits lugged. Yet they like fundamentally do not believe that it should be a country's. They don't go policy that, like stabilizes the economy,
They don't think it should exist or they don't think it should be anywhere close to, as quote unquote generous as it is and you've seen this again and again I mean you saw it with Lindsey, Graham in the Senate, you saw with Work Scott when he was governor again when he's a senator. This view is incorrect, but it's not insincere.
And so, when you hear the administration in to their hands like they, they take action like they don't mean it. Like a philosophical. Like view of these programs like a really a south Asia that strategy- maybe us on these your money, but it really is like five fundamental view of what these programmes should look like and who they should serve an original Casey Casey.
Again who worked in the trunk White House while Geeks what a book about the Obama error I mean he puts forward the view that people's ability to access social assistance programmes worsens were sessions by essentially making.
Lazy- and I don't know a single unemployed worker out there right now. Who's lazy, like they're all calling Mitch Mcconnell twenty four hours a day like more power to that. But critically
if you remember of congress- and you don't believe that, like you need to do something and I think there are actually like we talk about Vandams doing things are actually think there are quite a few members of the Republican Party, especially in the Senate,
We agree that, like you I should exist, then it should exist for the exact kinds of workers who are intending to help right now, and it should be more generous than it is in. Like I mean they voted for, the Cares ACT had had the secular top up. They voted for this current better how to love our top up, like I dont think that it's like a it's, I don't know you think a republican Democratic you it's like this, like weird philosophy, issue that some it seems like you know, Republican seem to ascribe to more often than not, but that said
like, I dont, think races inherently about republican governors. Still I we, I mean it's, it's a factional sort of get exactly Charlie, bigger of Massachusetts than you know, from private, like we have republican governors of Massachusetts and an you know, their system is, is one of the most generous were so? Can we can we just like we do this and make it a federal system either? I have to ask a couple people in the Senate if they vote for that, but I think I mean so I so this is my big plug for. Like Michael Balance, you I plan
which totally does not federali's. This is somebody. Does that really really really important kind of? I don't want to say. Baby steps are, in fact giant leaps. I mean the replacement rate would be increased to like seventy percent weed have full funding for federal, extended benefits is currently it's half and half into the states weed set that all states have to do two thousand and sixteen,
unemployment? We bring in a job seekers, and I mean there's another beata- depended on answers, a ton of really incredible reforms that you're like wheat. How does that not currently exist and that sad? It doesnt federalized system, and so I think you know so that plan was actually written right before the pandemic and in twenty sixteen centre for american progress. The national employment law project and the georgian Centre on inequality and poverty got together and wrote this big reform of like here's. How to fix you, I am it got triggers, has got every them in school, really got a wish list
but they also did not call for a federal is action, and I think this particular moment like if there was ever one. This is the time where I think we could like one get the support for federalism, given what we saw over the last nine months and
sue the moment where, like unemployed workers are organised.
You know, there's like policy rash,
for it. There's a budget rationale for it and we have the votes, and so I think, like
it's really gonna beyond now, Senate finance, tear widen and and members to kind of put a plan together that you know if it doesn't federalized the whole system,
certainly federalism, administration and knowledge ability and benefits. I mean, I think, when you, when you think about the technical challenges that states are raising, because then there is the sort of radiological issues, but that the technical issues with the software are real
and if you are going to need to sort of redo the work right as Bonnier aspirations, they dont once not fifty three times right, make unemployment a don't pay delay to give fifty stays. The same website like. Why do we need to find fifty contracts for ten different, consulting firms to build the same exact website
fifty three jurisdictions when we could pay one to build unemployment or to it internally, like let's do away with the consulting firms in its entirety and like what the Department of Labor to build unemployment gov like it's so much cheaper like there's. Actually, a conservative argument to this of, like it's less redundant,
and more efficient. To have one went in to me that that would be. You know my my high minded technical pitch right that, like after the affordable, correct website the Asko they built, this grew Iver, F, sixteen
I think it's called there. There's like an in house website. Building yes capacity in the federal government like give them a big new signature project to deal I'm in order for the Eu S digital response team, like stepped in and leg denuding Scalia deployed the deal's Eyeteeth team to like help out state than like none of that needed to help end. If we just had one central eyes
fight instead of having a million software developers, some of which we were unemployed like trying to help Steve Rico their cool system because of the need to happen- and I think it's like it's really important for Senate Democrats to realize that that is an incredibly stupid decision to do exactly what we didn't two thousand and ten to give states money to kind of fix their websites like that's not going to fix the problem like it's like it's like kicking,
I don't use, I'm came again on the road it just like wasting money swayed- and you know at some point right- it's like some future broadcast in the twenty sixties should not need to go back to the nineteen thirty five decision to make this estate program like there's. No. This is a good reason for us to think that local variance in this in administration of unemployment benefits is helping anybody. So there is an argument for EF. I think it's like not guided by the argument is that some states could innovate, and so, if you take the right of states to innovate away, then oh now, but
people employed, but honestly, I do not think we need states to innovate new ways to screw over the poor and the cities. Have we what they're doing like you? Lastly, we gave you a science fair. You did a bad experiment. We are taking your science causeway, you know people, people move,
people lots of people dying in the state they want in this is the whole problem now is like claims get denied. Because of what I live in DC, you in DC it very possible that, like half of her workforce doesn't live in DC or that like we're, very train the population and so as to try seed area and also a lot of people were promote. Now, like it's crazy, that, like your residents, is tied to your employment, so in here
We in the EU I system, which is so antiquated, like it Just- has an updated with our labour market and see what a gig workers not being employed like it. Just hasn't it stuck in, like a nineteen seventies, employ
model where you know you gonna work every day and you go to,
one job and you come home like that's not what are the thought, what our economy looks like anymore and especially if, if more people were remotely on a sort of semi, how many basis what you mean? I think a lot of people think right that this technology we ve been using will be. Will be sort of a boy? More broadly, I mean I think I'll. There's a does the lot of thought that in the future there may be even more remote work and it would be a shame to sort of next recession. Down turn out that, like a huge share of the population, has got like an incredibly confused unemployment situation because I've been you know in three. Different states are or something like that so yeah having it's like accommodation for remote work like an increase in like multiple jobs,
increase in multiple gig jobs like it's all of these very different non traditional employment situations that are like a different person by person level and our unemployment system does not really deal with partial unemployment like a few, have three jobs and you lose one of them. If it's a certain percentage of
income like maybe we should replace some of that and like it just doesn't, handle those types of things and get old gentleman
I see you just even running in my mentions, while passing with you there's tons of people yelling at me once again about two thousand dollar checks
saying? Oh these people who are facing a fiction. There's people facing and leg, is all a hundred percent. True like there are lots of people in dire circumstances, the like. That's what unemployment insurance should be for meeting the the urgent needs of people who lose their jobs? It would mean we have an unemployment insurance system, but like we need to make it good enough that we can really say its care of that I mean huge met, how long it takes people to get benefits and like I,
very frustrating experience, getting a health insurance reimbursement thing, but like I'm, a noise, but it's fine. But if you lose your job like you need your benefits. Now. Yeah I mean especially in a recession where, like the lay offs, were disproportionately low wage workers, workers of color who have less access to credit web savings, who are less likely to be home owners who can take a home equity loan like there's all these different compounding factors that are you know. Maybe you need to this recession, but not really I mean these were this, like these tribes of jobs are also loss of the great recession I'm sure before,
and when you look at these types of things, like I don't know, I couldn't like I make a decent living. I live in a very nice apartment like I have parents who could help me. I don't think I could wait a hundred and forty days for, and unemployment payment to come through, like I can't imagine if Europe, if you work
live in Georgia and you make seven dollars and twenty five cents an hour like there's, no way you could have afforded to await a hundred and fifty days for your payments. Yeah I mean, I think, that's why so I mean, I think the message here is like Congress like tried to fix this. Don't don't just put another bandy on the system, but like let's like we like you eyes great, is important, but it could be a lot better than it is yeah. I think that's exactly. I think think: there's there's a funding concern, there's an eligible Eddie concern. There's a benefits, concern like a generosity concern and then there's this big administration and financing concern that like even if we addressed the first three
like that. Fourth, one is really really really pivotal right. Ok, I think a blue. We will leave it there, but thank you so much was with pen employ America, which is a great operation overall unemployment an end
or other related topics, and thank you so much thanks, as always to
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Transcript generated on 2021-05-13.