California lawmakers ask Newsom to act immediately on unemployment claims

From Los Angeles Times:

More than half the members of the California Legislature called on Gov. Gavin Newsom on Wednesday to immediately begin paying unemployment benefits to many of the more than 1 million jobless workers whose claims have been stalled in the system as the state works to clear a months-long backlog.

In a letter to governor, a bipartisan group of 61 lawmakers issued a series of requests for immediate action at the state Employment Development Department, including calls for the agency to ensure service representatives do not hang up on callers who they can’t help, and implement an automatic call-back system to quickly respond to those who cannot reach a live operator. The lawmakers also called for the agency to expedite its approval of unemployment benefits by retroactively certifying claims and resolving issues later in the process.

“In our fifth month of the pandemic, with so many constituents yet to receive a single unemployment payment, it’s clear that EDD is failing California,” said the letter to Newsom. “Millions of our constituents have had no income for months. As Californians wait for answers from EDD, they have depleted their life savings, have gone into extreme debt, and are in deep panic as they figure out how to put food on the table and a roof over their heads.”

EDD spokeswoman Loree Levy said the agency is reviewing the letter and will provide a response as soon as possible. The governor’s office did not immediately respond to requests for comment on the letter’s recommendations.

The letter, which was organized by Assemblyman David Chiu (D-San Francisco), was signed by 49 members of the Assembly and 12 members of the state Senate, including Senate Republican Leader Shannon Grove of Bakersfield, and sent a week after Newsom announced the creation of a “strike team” to reform EDD and complete all unanswered claims by the end of September.

The governor said the claims are from those who may be eligible for payment but require more information. Many claims are “pending resolution” because they have issues to resolve, including verification of the identity of the filer, he said.

The legislators said in their letter that the backlog should be cleared sooner than the end of September and that, in the interim, Californians with stalled claims should receive some portion of their benefits to help them make ends meet.

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Coronavirus relief talks restart as jobless aid divides GOP and Democrats

From today’s CNBC News Online:

Democrats and Trump administration officials will sit down again Monday afternoon to try to hammer out an elusive deal on a fifth coronavirus aid bill. 

Negotiators House Speaker Nancy Pelosi, D-Calif., Senate Minority Leader Chuck Schumer, D-N.Y., Treasury Secretary Steven Mnuchin and White House chief of staff Mark Meadows plan to meet at 1 p.m. ET as the sides find themselves far from an agreement. The discussions will follow Sunday’s staff-level talks on a package to help rein in a raging pandemic and jolt a flailing U.S. economy. 

The effort has gained urgency after a $600 per week federal unemployment benefit expired at the end of July. The extra aid has helped tens of millions of jobless people afford food and housing as the economy reels during the outbreak. 

Pelosi has indicated the sides made more progress in talks over the weekend than they did in discussions last week. Asked Monday how far apart Democrats and Republicans are, the speaker said she would wait to see how Monday’s talks go. 

“Well, let’s see when we meet today,” she told CNN. “It’s absolutely essential that we reach agreement.” 

Disagreements over how to structure unemployment insurance have stood in the way of a deal. Democrats have insisted on continuing the $600 weekly sum. They passed a House bill in May to extend the aid into next year.

Republicans, who questioned the need for more pandemic relief before they released a proposal last week, want to slash the extra benefit to $200 per week through September. They would then set the aid at 70% wage replacement.

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Senate GOP, White House propose cuts to unemployment relief checks

From today’s ABC News Online:

Senate Majority Leader Mitch McConnell introduced a new coronavirus relief plan on the Senate floor after Senate Republican leaders and the White House appear to have overcome their differences.

“I hope this strong proposal will occasion a real response, not partisan cheap shots. Not the predictable, tired old rhetoric as though these were ordinary times, and the nation could afford ordinary politics,” McConnell said Monday afternoon in a floor speech.

But Democrats already don’t agree with the Republicans’ plan, which includes a $200 flat-rate, short-term extension to federal unemployment benefits as opposed to $600 a week, a senior source familiar with the matter confirmed to ABC News, since it will take time before states’ systems can shift to accommodate any federal benefit changes.

Following McConnell’s floor speech, Senate Minority Leader Chuck Schumer criticized the Republican Party for “wasting precious time” in the months since Congress passed its first coronavirus relief package, arguing “the White House and Senate Republicans couldn’t get their act together” in the time since.

“Ten weeks after Democrats passed a comprehensive bill through the House, Senate Republicans couldn’t even agree on what to throw in on the wall,” Schumer said, adding that support for the plan presented Monday is still not clear. “Not only do we not know if the president supports any of these proposals, we don’t even know if Senate Republicans fully support.”

Republican sources familiar with the matter told ABC News later Monday that there could be as much as half the Senate GOP conference voting against the bill.

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McConnell says stimulus deal may take ‘a few weeks,’ putting millions with expiring jobless aid in limbo

From today’s Washington Post:

With days to go before enhanced jobless benefits expire, the White House and Senate Republicans are struggling to design a way to scale back the program without overwhelming state unemployment agencies and imperiling aid to more than 20 million Americans.

The hang-up has led to an abrupt delay in the introduction of the GOP’s $1 trillion stimulus package. The White House and Democrats have said they want a deal by the end of the month, but Senate Majority Leader Mitch McConnell (R-Ky.) suggested Friday that reaching an agreement could take several weeks, a timeline that could leave many unemployed Americans severely exposed.

“Hopefully we can come together behind some package we can agree on in the next few weeks,” McConnell said at an event in Ashland, Ky.

Part of the problem stems from a push by administration officials and GOP lawmakers to reduce a $600 weekly payment of enhanced federal unemployment benefits. The White House and the GOP disagree about how to do this, and talks remain highly contentious. They hope to release a proposal early next week.

After convulsing in March and April when the coronavirus pandemic shut down large parts of the United States, the economy showed signs of regaining its footing before sliding again in recent weeks. The effects of numerous stimulus programs appear to be wearing off, and the pace of layoffs has picked up again. Layoffs that many Americans thought would be temporary have dragged on and become permanent, particularly as new cases of the novel coronavirus surge in parts of the country.

This has put enormous pressure on state unemployment programs, which typically pay out about 45 percent of a worker’s prior wages. In March, Congress approved the $600-per-week emergency bonus for every unemployed worker on top of that traditional payment, funneling hundreds of billions of dollars to newly jobless Americans as the pandemic hit the country.

That federal benefit, being received by more than 20 million people, is to expire at the end of this month. And the expiry comes as a federal eviction moratorium also is ending, creating a dynamic that could greatly stress cash-strapped families. In practice, the coming lapse in the jobless benefit means millions of workers are receiving their last enhanced benefit payment this week.

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Mnuchin says plan for unemployment extension will be based on 70% wage replacement

From today’s CNBC News Online:

The Republican coronavirus relief plan will extend enhanced unemployment insurance “based on approximately 70% wage replacement,” Treasury Secretary Steven Mnuchin said Thursday. 

The Treasury secretary also said a payroll tax holiday, which President Donald Trump has repeatedly pushed for, “won’t be in the base bill.” The president appeared to concede defeat on the issue in a tweet Thursday and blamed Democrats for sinking the proposal (though many Republicans on Capitol Hill also oppose a payroll tax cut). 

Mnuchin spoke to CNBC about the state of negotiations hours after Senate Republicans and the Trump administration said they reached a tentative deal on legislation they say will serve as a starting point in talks with Democrats. Congress faces pressure to pass an aid package, as Covid-19 case and death counts rise around the country and the critical extra $600 per week unemployment benefit expires at the end of the month. 

But Republican plans to release their plan as soon as Thursday appeared to hit a snag as they tried to craft legislative text, further adding to doubts about Congress’ ability to provide immediate relief. Democrats hammered the GOP for a lack of urgency for a second straight day, and rejected the possibility of breaking a coronavirus package into more than one bill if lawmakers cannot reach a broad agreement in July. 

“This is a package. We cannot piecemeal this,” House Speaker Nancy Pelosi, D-Calif., told reporters at a news conference with Senate Minority Leader Chuck Schumer, D-N.Y. He added that “we’re not going to take care of one portion of suffering people and leave everyone else hanging.”

It is unclear how Republicans would structure the plan to provide 70% wage replacement. Lawmakers chose the $600 per week sum in the March rescue package because they decided outdated state unemployment systems could not handle processing payouts for 100% of a worker’s previous wages. 

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California unemployment falls, but virus surge likely to reverse job gains

From today’s Los Angeles Times:

California added 558,200 jobs from mid-May to mid-June and state unemployment fell from 16.4% to 14.9% — but don’t start celebrating yet. The numbers don’t account for the resurgence of COVID-19 cases throughout the U.S. and in California in the last half of June or the retreat in plans to reopen the economy. The numbers were released Friday morning by the U.S. Bureau of Labor Statistics, which slightly revised the earlier jobless figure from 16.3% to 16.4%.

Leisure and hospitality added the most jobs, at 292,500, benefiting from statewide reopenings of bars and dine-in restaurants, according to the California Employment Development Department. As of mid-June, that sector had regained more than a third of job losses from March and April. Construction jobs had the highest percentage gain, clawing back 68% of jobs lost during the pandemic. Government suffered the largest decline in jobs, at 36,300.

But the dial-back is bound to reverse a positive trend in rehiring as bars, restaurants, hotels, airlines and thousands of other affected businesses scale back already reduced operations or remain closed, said Michael S. Bernick, an attorney at Duane Morris and former head of the California Employment Development Department.

“In some cases, workers rehired in June have been laid off [again] within a short time,” he said. “In other cases, companies decide they can no longer hang on. Every day brings reports of businesses announcing they are closing permanently in California.” Still, he said, the job gain is the highest in the nation, and probably the largest monthly jobs gain since World War II.

But any recovery will be jerky. The nonpartisan Economic Policy Institute said that due to the latest rise in COVID-19 cases, “Layoffs are going to pick up again as people are laid off for a second time, and hires will likely slow as well.

“Even with June’s rebound, which followed a small upturn in May, payroll employment in California stands 1.9 million lower than February. This represents an 11% drop, worse than the 9.6% loss for the nation as a whole,” said Lynn Reaser, economist at Point Loma Nazarene University in San Diego. She noted that California’s current unemployment is nearly four times its 4% year-ago rate and well above the 11.1% national rate.

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Students Are Victims of Fraud, but the Department of Education Won’t Help

From today’s New York Times:

When Albert Paul Cruz opened a letter from the Education Department last month, he saw the words he’d been waiting for: “We approved your claim.” The government finally agreed that he’d been defrauded by ITT Technical Institute, the defunct for-profit chain where he’d racked up almost $60,000 in student loans getting what he considers a worthless degree.

Then he scrolled to the next page and saw how much of that debt would be forgiven: zero. The department, the letter said, had concluded he suffered no financial harm.

“You’re acknowledging the school defrauded its students and claiming that didn’t hurt us?” said Mr. Cruz, who earned an associate degree in computer networking systems in 2010 but never worked in that field. “How is that even possible?”

The approval of claims without financial relief is the latest twist in longstanding efforts by defrauded borrowers to get help from the federal government through a program meant to assist former students whose schools offered sham degrees and empty promises.

Years of delays and attempts to cut the relief borrowers can receive have prompted dozens of lawsuits against the department. Now, under pressure from federal courts to deal with hundreds of thousands of unresolved claims, the Education Department is processing them — and saying no. More than 45,000 rejection notices have been sent in recent months, according to agency data.

And when the department is legally obligated to approve a claim, it is often granting only minuscule relief — or none at all.

“Borrowers can’t win,” said Eileen Connor, the legal director of the Project on Predatory Student Lending, a group that has represented borrowers in multiple cases against the department, including one filed last month that challenges the agency’s partial-relief approach. “To tell even borrowers who can prove they were defrauded by their school that they still get no relief is absurd and cruel.”

Education Secretary Betsy DeVos has long refused to take part in the program, which she once called a “free money” giveaway. Last year, she said the program was a “mess” when she took over, and added that a new methodology for calculating relief — including granting none on many approved claims — “treats students fairly and ensures that taxpayers who did not go to college or who faithfully paid off their student loans do not shoulder student loan costs for those who didn’t suffer harm.”

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Unemployment and job growth show strong improvement, but coronavirus darkens the outlook

From today’s Los Angeles Times:

The U.S. economy added a larger-than-expected 4.8 million jobs in June despite the worsening COVID-19 pandemic, registering solid gains for the second straight month after suffering near-Great Depression losses in the spring, the government reported Thursday.

Reflecting the June increase, the nation’s unemployment level fell to 11.1% after hitting 13.3% in May and 14.7% in April.

While the back-to-back months of improving numbers offered a spot of hope, they may be an uncertain guide to the future. Coronavirus cases, as well as hospitalizations and infections among younger Americans, have been exploding in California and other states across the West and South.

As a result, many areas that were reopening for business, and thus beginning to call back workers, are reversing course and imposing restrictions again. “This report may be a kind of high point,” said Heidi Shierholz, a former Labor Department chief economist now at the Economic Policy Institute.

California’s employment numbers for June will be released July 17, and are likely to mirror the national trend, albeit at a weaker pace. The state’s jobless rate for May was 16.3%, little changed from April, as job creation lagged somewhat. Unemployment in Los Angeles County was 20.9% in May.

Even with the June gains, joblessness overall remains higher than at any time since the Bureau of Labor Statistics’ records began in 1948. Jobless rates dropped across the board, but disparities remain significant. Black unemployment was 15.4% compared with 14.5% for Latinos, 13.8% for Asians and 10.1% for white people. Unemployment for college graduates was down to 6.9% versus 12.1% for workers with only a high school education.

The Bureau of Labor Statistics said the overall unemployment rate for the nation might actually be 1 percentage point higher than the 11.1% reported due to complications in survey collection. Misclassification of workers’ status had resulted in a much bigger undercount of the unemployed in the prior two months.

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How COVID-19 turned a spotlight on weak worker rights in the U.S.

From today’s Harvard Gazette:

As the economy reopens after the COVID-19 shutdowns, businesses are taking a varied, often patchwork approach to ensuring health and safety for their workers, and much uncertainty persists regarding employers’ obligations and employees’ rights. The Gazette spoke with labor law experts Sharon Block, executive director of the Labor and Worklife Program, and Benjamin Sachs, the Kestnbaum Professor of Labor and Industry at Harvard Law School (HLS), about how the pandemic has turned a spotlight on the lack of clear workplace protections in general, and in particular for women and people of color, who were disproportionately represented among those deemed essential. Block and Sachs recently co-authored a report urging that U.S. labor law be rebuilt from the ground up. On June 24, they will release the report “Worker Power and Voice in the Pandemic Response.”

Q&A: SHARON BLOCK AND BENJAMIN SACHS

GAZETTE: What do you think the COVID-19 crisis has revealed about working conditions in the United States?

BLOCK: What it has revealed is something that many of us have known for a long time, but it’s been revealed in a much more urgent way, and it is how tattered our social safety net is in this country. That plays out in in a number of ways: for example, how inadequate our supports for workers are in terms of unemployment insurance. Just look at the desperate circumstances now more than 40 million workers have found themselves in. That’s been the reality for many low-wage workers, not on a mass scale, but that’s been their lived experience, even throughout a time when we thought we were in an expanding economy. The other side that has been exposed is that for workers who have been deemed essential and have worked throughout this crisis, how little protection they have in the workplace to be able to stand up for themselves, to say that their conditions are unsafe and they’re not being paid adequately for the important work they’re doing. On all sides of the social safety net and the ability of low-wage workers to have a decent life, what we’re seeing in myriad ways is how the system has failed workers.

SACHS: I would just add how weak the protections are for workers who stand up and demand safe, healthy, and fair working conditions, and how easy it is to fire workers who do that. It has also shown how badly broken our system of labor law is, which is to say that our system doesn’t give workers a voice so that the only recourse workers have is to take to the streets, and how little opportunity they have for an institutional structure of communication and demand-making. The other thing that Sharon and I would like to stress is how the crisis is being borne disproportionately by workers of color and women, which is another failing of our labor market and our system of labor law.

GAZETTE: Why are workers of color and women bearing the brunt of the coronavirus crisis? What role do the labor market and the labor law system play in it?

BLOCK: This is the result of the broken safety net we have. These are workers who are deemed essential, but the law has not treated as essential. They don’t have basic rights or the law doesn’t adequately address their situation. For lots of low-wage workers who are in these essential industries, the current labor law is particularly broken. They really have almost no real access to being able to act collectively and have the law recognize that and thereby give them power to affect their situation at work. As Ben said, they are predominantly workers of color and women, and that’s a big piece of why this pandemic has hit them so hard. We’re really seeing this connection that a lot of people intuitively knew, but hopefully more people understand now, which is that it is hard to separate economic issues and public health issues and issues of physical well-being. It’s not an accident that most people who are getting sick are poor or paid low wages.

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Why a Rotting Green Bay Boardwalk May Help Solve America’s Jobs Crisis

From today’s New York Times:

The governor of Pennsylvania wants to hire unemployed workers to help the state track the spread of the coronavirus in the fall. City Council members in Austin, Texas, voted to pay people to help with projects like preparing land for fire season. And Green Bay, Wis., hopes to pay the out-of-work to fix a decades-old rotted boardwalk in a major recreation area.

Across the country, state and local officials are considering ways to directly hire their out-of-work constituents, hoping that they can pay them to clean up parks, assist in conservation efforts and form the backbone of the public health response to the virus.

The programs so far are likely to allow for only a small number of jobs, in some cases just a handful. But local officials say they are hopeful the idea can persuade other areas to try similar efforts and, more important, elicit additional funding from Congress to support local job creation.

The effort is aimed at helping communities deal with an unemployment crisis more severe than what the nation faced at the worst moment of the Great Depression. Tens of million of workers have lost their jobs since mid-March, when the pandemic forced consumers into their homes and shut down most businesses. New unemployment claims have topped one million for 13 straight weeks.

So far, lawmakers and governors have mostly pushed for policies that will ensure Americans can go back to the jobs they held before the pandemic. The federal government allocated $660 billion for forgivable loans to businesses that agreed to keep workers on the payroll. Republican lawmakers have said they are interested in providing bonuses to people who return to work in lieu of extending expanded unemployment benefits, which are set to expire on July 31. And states have pushed to quickly reopen workplaces so that employees can regain a paycheck.

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