Post-COVID, Americans Don’t Want to Return to Lousy Low Wage Jobs

From today’s New York Times:

The hopes for a booming pandemic recovery — growth led by jobs gains in the millions every month — were dealt a blow in recent weeks by a disappointing April jobs report. Perhaps we will see better when results for May are released this week, on Friday. But, for weeks, many in Democratic policy and political circles have been queasy about addressing the connection between federally supplemented unemployment insurance benefits and the slowing pace of re-employment at this stage of the recovery from the pandemic. There is almost certainly a common sense connection: If you were a low-wage worker, why aggressively attempt to go back to work at a lousy, low-paying job, when you can make more money collecting unemployment benefits.

Still, Republican politicians are getting it wrong too. They are citing countless news reports that businesses are struggling to fill certain positions as both a reason to end federal unemployment benefits and as evidence that the extra benefits were too generous in the first place. They worry that the ability of some workers to stay on the sidelines of the labor market, unless employers offer wages that trump jobless benefits, could result in dangerous “wage inflation” — a potential increase in labor costs that, they believe, consumers will pay for in the form of higher priced goods and services.

That argument simply does not hold water either: Over the coming weeks and months as this aid for the jobless phases out, there will be a flood of anxious job seekers pouring into labor markets. Even if a significant share of workers are temporarily avoiding taking low-paying jobs while benefits remain generous, then there is no true “labor shortage,” as many economists and market commentators are calling it.

When Congress passed the CARES Act last May and the American Rescue Plan Act this March, it was hard, even impossible, for policymakers to forecast the demand for labor or the pace of the economic recovery. The pandemic was still stubbornly lurking. The economic (and humanitarian) risk of doing too little far exceeded the risk of being generous. And in spite of some recent comments from Democrats facing political pressure, the entire point of the enhanced unemployment checks, at least originally, was to tide Americans over until it was safe for more people to work again.

Now enhanced benefits are ending every day for the millions of Americans who have benefited from the Pandemic Emergency Unemployment Compensation, or PEUC, program, which extends unemployment insurance for 13 weeks to those who exhausted their conventional state and federal unemployment benefits. All extra federal supplements for the unemployed will end on Sept. 6, including the general $300 weekly benefit, as well as the Pandemic Unemployment Assistance, or PUA, program, which provides aid to those who were self-employed. (Some states are in the process of cutting them early.)

Republican-controlled states, as well as some more politically mixed states, are doing this because they presume there is a macroeconomic upside to millions of workers returning to lower-income jobs. They shouldn’t be so sure.

Read the complete article here.

The Jobs the Pandemic May Devastate

From todays’ New York Times:

Projecting how many people will work in hundreds of detailed occupations in 2029 is a bold exercise — even without the uncertainty of the pandemic.

But labor experts within the U.S. government try to do just that. And their latest assessment of which jobs will grow over the next decade has alarming implications for jobs requiring less education — while also forecasting a boom for epidemiologists and other health-science jobs.

That assessment, from the Bureau of Labor Statistics, emphasizes all the uncertainty that accompanies projections, and it stresses that these are estimates of structural changes, not forecasts of cyclical booms and busts. Long-term projections are often wrong, especially for more volatile sectors like mining and construction, but the agency’s estimates are typically well reasoned and sober.

The original B.L.S. projections, made last year without taking pandemic effects into account, called for cumulative economywide job growth of 3.7 percent from 2019 to 2029. The new pandemic-informed projections cut that to 2.9 percent in the “moderate impact” pandemic outlook and 1.9 percent in the “strong impact” one.

Both of these new outlooks assume more remote work and higher demand for relevant technology services; less in-person entertainment and travel; and more investment in public health than would have happened without the pandemic.

In the “strong impact” projection, there would be 25 percent more epidemiologists in 2029 than the original baseline projection for 2029, the largest increase among nearly 800 detailed occupations. The 10 occupations with the biggest increase in projected employment relative to the baseline projection are all in medical, health-science and technology fields. The 10 occupations with the largest declines relative to the baseline projection include restaurant, hotel and transportation jobs.

Read the complete article here.

CA lawmakers propose slate of reforms for troubled unemployment agency

From today’s Los Angeles Times:

After a pair of scathing audits confirmed California’s troubled unemployment agency has been plagued by years of mismanagement, state lawmakers on Thursday announced a raft of new bills to speed up the payment of jobless benefits and reduce fraud.

The package of bills proposed by nine Assembly members is aimed at forcing change at the state Employment Development Department, which was criticized by the state auditor last week for delays in providing unemployment benefits despite having been warned of problems in the system a decade ago.

The proposals would allow benefits to be provided by direct deposit rather than issued with debit cards sent through the mail, would require the agency to check claimants against lists of prison inmates to prevent fraud and would establish an Office of the Claimant Advocate to help people with claim problems.

“Many of the issues EDD is facing today have been known since the Great Recession,” said Assemblyman David Chiu (D-San Francisco). “Almost nothing was done to fix the problems or plan for another economic downturn.”

The EDD has been slow to respond to an unprecedented flood of unemployment benefit applications that resulted from the state shutting down much of the economy to stop the COVID-19 pandemic that began nearly a year ago.

Lawmakers said during a video news conference Thursday that many residents with legitimate unemployment claims have been harmed by an EDD decision to suspend 1.4 million claims in December to make sure they are not fraudulent.

Bay Area resident Laurel Carter joined the lawmakers’ event, saying her legitimate claim was suspended in mid-December with “no other explanation given.” She had difficulty uploading documents to prove her identity and was told she would have a five-hour wait to talk to a representative for help.

“I slept with my computer on for eight days just thinking that maybe in the middle of the night I would hear a ding and it would be someone that would speak to me,” Carter said. “I am now six weeks in without any payment.”

Though EDD Director Rita Saenz told lawmakers on Wednesday that she is committed to implementing improvements to the agency recommended by the state auditor and a strike team of government experts appointed last year by Gov. Gavin Newsom, skeptical lawmakers in both parties have introduced 20 bills in recent weeks in an attempt to more quickly address problems. They include legislation by Assemblywoman Lorena Gonzalez (D-San Diego) that would provide claimants with theoption to receive their unemployment benefits via direct deposit to their bank accounts.

Read the complete article here.

CA’s unemployment fraud may top $9 billion, doubling estimate, expert warns

From today’s Los Angeles Times:

As an army of investigators tries to pin down the scope of unemployment benefit fraud in California, the head of a security firm working for the state is warning that payments of fraudulent claims could more than double the $4 billion previously estimated, and that a flood of those claims involve overseas crime rings.

At least 10% of unemployment claims may have been fraudulent before controls were installed in October, according to Blake Hall, founder and chief executive of the company ID.me., which has been hired by the state Employment Development Department to weed out fraud. A 10% fraud rate could total $9.8 billion of the benefits paid from March through September.

Much of the fraud in California and other states is coming from organized criminal gangs operating in some 20 foreign countries, including Russia, China, Nigeria, Ghana, Turkey and Bulgaria, Hall said.

“When the Russians and the Nigerians and the Chinese are the players on the field, they are going to put up some points,” Hall told The Times. “This is a very sophisticated cyberattack that’s being run at scale.”

Hall’s firm was hired by the EDD to begin checking unemployment claims in October, and since then 30% of the claims it screened turned out to be fraudulent. Between Oct. 1 and Jan. 11, Hall said his firm blocked 463,724 fraudulent claims, which he said would represent more than $9 billion if the EDD had paid $20,000 on each claim.

The EDD has so far paid out $113 billion in unemployment benefits during the 10 months of the COVID-19 pandemic, including $43 billion as part of an expedited — and less secure — Pandemic Unemployment Assistance program for independent contractors, gig workers and the self-employed.

State officials were recently warned by Bank of America, which is under contract with the EDD to issue debit cards to distribute benefits, that there is evidence that fraud could total more than $4 billion in California. A task force of county, state and federal law enforcement officers and prosecutors is continuing an investigation to identify all of the fraud, which has also involved claims in the names of prison inmates.

Read the complete article here.

OnlyFans: Jobless from the Pandemic, Selling Nudes Online and Still Struggling

From today’s New York Tiimes:

Savannah Benavidez stopped working at her job as a medical biller in June to take care of her 2-year-old son after his day care shut down. Needing a way to pay her bills, she created an account on OnlyFans — a social media platform where users sell original content to monthly subscribers — and started posting photos of herself nude or in lingerie.

Ms. Benavidez, 23, has made $64,000 since July, enough not just to take care of her own bills, but to help family and friends with rent and car payments.

“It’s more money than I have ever made in any job,” she said. “I have more money than I know what to do with.”

Lexi Eixenberger was hoping for a similar windfall when she started an OnlyFans account in November. A restaurant worker in Billings, Mont., Ms. Eixenberger, 22, has been laid off three times during the pandemic and was so in need of cash by October that she had to drop out of dental hygiene school. After donating plasma and doing odd jobs, she still didn’t have enough to pay her bills, so at the suggestion of some friends, she turned to OnlyFans. She has made only about $500 so far.

OnlyFans, founded in 2016 and based in Britain, has boomed in popularity during the pandemic. As of December, it had more than 90 million users and more than one million content creators, up from 120,000 in 2019. The company declined to comment for this article.

With millions of Americans unemployed, some like Ms. Benavidez and Ms. Eixenberger are turning to OnlyFans in an attempt to provide for themselves and their families. The pandemic has taken a particularly devastating toll on women and mothers, wiping out parts of the economy where women dominate: retail businesses, restaurants and health care.

“A lot of people are migrating to OnlyFans out of desperation,” said Angela Jones, an associate professor of sociology at the State University of New York at Farmingdale. “These are people who are worried about eating, they’re worried about keeping the lights on, they’re worried about not being evicted.”

But for every person like Ms. Benavidez, who is able to use OnlyFans as her primary source of income, there are dozens more, like Ms. Eixenberger, who hope for a windfall and end up with little more than a few hundred dollars and worries that the photos will hinder their ability to get a job in the future.

It’s Time to Strike! This Could Be the Last Stand for American Workers

From today’s New York Times:

Labor Day hit with an extra knife-twist of cruel irony this year, in an America that is barely trying to pretend anymore that the plight of tens of millions of working people merits national concern.

On Friday, the government announced a slowing recovery from the job losses and economic shutdown caused by the pandemic. Nearly 14 million Americans are now unemployed, and almost eight million more are euphemistically called “involuntary part-time,” meaning they would work more if there were enough work.

In March, as part of a wider stimulus, Congress expanded unemployment aid by $600 per week, a plan that scholars say may have temporarily reduced the nation’s poverty rate. As of mid-August, about 29 million Americans were receiving some form of unemployment assistance.

But the $600-per-week bonus ran out in July, and Senate Republicans have rejected Democrats’ bill to extend the payments. The G.O.P. is now working on its own more limited plan, though several Republican senators are reluctant to support even that.

Inaction may prove disastrous. Beth Ann Bovino, chief U.S. economist for S & P Global, told The Times last week that federal aid was meant as a kind of economic bridge through uncertain times, but, she added, “it looks like the ravine has widened and the bridge is halfway built, so there are a lot of people stranded.”

Bovino’s image suggests a way out of this mess: Workers should band together and demand, collectively, a bridge across the ravine.

To put it more plainly: It’s time for a general strike. Actually, it’s time for a sustained series of strikes, a new movement in which workers across class and even political divides press not just for more unemployment aid but, more substantively, a renewed contract for working in an economy that is increasingly hostile to employees’ health and well-being.

This may be the American worker’s last stand: If we can’t get our government to help us now, when will we ever?

Read the complete article here.

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.

Read the complete article here.

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.

Read the complete article here.

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.

Read the complete article here.

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.

Read the complete article here.