As businesses shutter to slow the spread of the coronavirus, the United States has likely already entered a recession. New weekly unemployment insurance claims in Louisiana have already jumped from 2,225 claims to 72,620 claims in just a week. Congress has responded quickly, by approving emergency measures that provide aid to families, workers, businesses and state governments.
Much of the federal money is going to help people who are unemployed. But it comes with some conditions for states that want to take full advantage of the benefits. Gov. John Bel Edwards recently signed an executive order that waived requirements that don’t make sense in our current economic conditions: Applicants no longer face a one-week waiting period before they can get benefits, and don’t have to prove to the government that they are searching for work. Employers will not face financial penalties if they are forced to lay off workers due to the virus.
These waivers, which Congress recommended in the Families First Coronavirus Response Act (“Families First”), are an important first step. But Louisiana could be doing much more to get money in the hands of as many unemployed Louisianans as possible. This is important for laid off workers and the overall state economy, as unemployment insurance is one of the most effective ways to lift an economy that’s in recession.
To take full advantage of the new federal funding, Gov. John Bel Edwards should take the following steps through an executive order:
- Waive the minimum base earnings of $1,200 required to qualify for unemployment insurance. This would ensure low-wage workers with inconsistent work history due to illness, caring for a family member, seasonal work, or past layoffs can still qualify for benefits.
- Temporarily replace the formula that calculates state benefit amounts with a flat rate of $370/week, which is the national average for weekly unemployment insurance benefits. Louisiana’s current average weekly benefit is $220 – only 23% of our average weekly wage and one of the lowest weekly benefits of any state. The federal government will subsidize state extended benefits until December 31. Increasing the weekly benefit will put more money in the pockets of unemployed workers, and potentially streamline application processing. Benefits can currently vary from $10 to $247 a week, with the workers who were paid the least before losing their jobs receiving the smallest benefits.
- Enact worksharing. Workshare, or Short Term Compensation, allows companies to reduce their employees’ hours instead of laying them off. The employer pays their employees for the reduced amount of hours worked, and unemployment insurance subsidizes their lost hours. The Louisiana Legislature repealed workshare in 2014. The CARES Act subsidizes 100% of workshare for states that already have it, and will subsidize 50% for states that enact it in response to the recession.
Taking these steps will reduce the number of layoffs, and ensure everyone who becomes unemployed due to the pandemic gets the financial support that they need.
Outreach and engagement
Louisiana also should take steps to improve how the state’s unemployment insurance program is administered, to make sure that every person who qualifies for these benefits receives them. Only 11% of unemployed Louisianans currently receive unemployment benefits. Only four states – North Carolina, Mississippi, Nebraska and South Dakota – have a lower share of eligible people getting benefits.
The Families First Coronavirus Response Act – the second of three economic stimulus bills passed by Congress – includes $500 million for states to help operate their unemployment systems and another $500 million for states who are actively strengthening their unemployment insurance systems. The Louisiana Workforce Commission should make quick and creative use of this money to open the door to further federal funding and to reach as many people as possible:
- Be creative and intentional with outreach: Most people who file for benefits will do so online. But large areas of rural Louisiana lack reliable broadband internet access, and many other low-wage workers simply can’t afford high-speed internet. The state could address this by hiring temporary outreach workers in communities at risk of being overlooked. Working with grassroots organizations, the state should advertise benefits at school feeding sites and grocery stores and advertise on TV and radio to make sure people know how to apply for benefits.
- Make necessary hires and technology updates: The caseload spike will stress the state’s technological capability. The Workforce Commission should use the federal money for technology upgrades, to staff up call centers and hire more people to process claims.
- Make the application process easier for non-proficient English speakers: The Workforce Commission’s website is hard to navigate for applicants who are not proficient in English. More content should be translated into Spanish, French and Vietnamese. The Workforce Commission could build on this by hiring French and Vietnamese speakers at its call centers, where the only current options are English and Spanish..
- Advertise unemployment benefits through employers: Employers should be communicating these benefits to their employees during layoffs, as required by the Families First Act. The Workforce Commission should provide updated resources to companies so information can easily flow to those affected.
Unemployed Louisianans should get access to the benefits they are owed, regardless of ZIP code, internet access, or socio-economic status. Getting more benefits to more unemployed Louisianans is important for two reasons:
- It helps “flatten the curve”: Providing vital financial assistance to people who become unemployed because of coronavirus allows recipients to make the best public health decision possible in the short term: staying home.
- It will reduce the impact on our economy in the long term: If Louisianans are able to pay their bills and buy food during the stay-at-home order, our economy will continue to function (albeit at a slower pace). That helps everyone. And by enacting a workshare program, more Louisianans will stay employed, which means they won’t be looking for work when the restrictions are lifted.
Louisiana is no stranger to disasters. We have weathered hurricanes, floods and oil spills – all of which have had significant disruptions on our state’s economy. But the current economic downturn is unique. Never before have so many economic sectors shut down, virtually overnight.
Fortunately, Congress quickly recognized the need for emergency relief to lift up families and businesses. But Louisiana can only take full advantage of this moment if the administration acts quickly.