America’s broken unemployment system

America’s broken unemployment system

Nearly 1.4 million Americans filed for unemployment last week, joining the 16 million others who were unemployed at the start of the year. The joblessness unleashed by the Covid-19 pandemic has put unprecedented strain on state unemployment insurance systems, which are ill-equipped to deal with deep economic downturns. Eduardo Porter of the New York Times looks at this broken system, conceived during the Great Depression, that leaves millions of Americans without income support when they need it most. 

States competing to be the most business-friendly, with the lowest taxes, will sort of naturally allow their unemployment systems to become underfunded, said Robert Moffitt, a professor of economics at Johns Hopkins University. The outcome is hardly optimal. “The program was set up to have tremendous cross-state variation,” he said. “This makes no sense. It creates tremendous inequities.”

Another major issue is that state unemployment programs have not kept up with the changing nature of work, which left many working people shut out of the system altogether before the Covid crisis:

The system was designed in 1935 for an industrial economy in which breadwinners — typically men — supported a family with a reasonably paid job that would last until retirement. It has proved an ill fit for a labor market where most working-age women are also employed, often in low-paid, part-time jobs that are insufficient to qualify for benefits. Certain new job types, like gig work, are not within the design of the unemployment system.

Unemployment insurance is a fundamental piece of our modern social contract. Our state unemployment systems are failing to uphold this contract and allowing companies to skirt their obligations – and we must change that.

New Covid variants may make recovery harder
Newly discovered coronavirus variants could complicate the ongoing efforts to recover from the pandemic. Emily Woodruff of The Times-Picayune | Baton Rouge Advocate reports that only one new variant has been detected in Louisiana so far, but public health authorities are not doing nearly enough genome testing  to know for sure whether or not new variants have arisen in the United States:

“We’re not doing enough of it,” said virologist Bob Garry, a professor at Tulane University who has studied viruses for over 40 years. “We need to do a better job of keeping track when they do come in, figure out how they’re spreading around, and look for new ones.”

The big problem with this is that we can’t be sure yet that the vaccines currently being distributed will protect everyone from these new variants of Covid:

“There is no way to sugarcoat this,” said Garry. “It does look like some of the variants may not be as effectively blocked by the vaccine.”

Child Tax Credit could lift millions of children out of poverty
Before the pandemic 1 in 8 American children lived in poverty – a figure that has surely grown in the last 10 months. A new analysis from Chuck Marr of the Center on Budget and Policy Priorities finds that the child tax credit expansion included in President Joe Biden’s Covid-relief proposal would lift millions of out of poverty, or bring them significantly closer to the poverty line:

President Biden’s $1.9 trillion emergency relief plan includes a Child Tax Credit expansion that would lift 9.9 million children above or closer to the poverty line, including 2.3 million Black children, 4.1 million Latino children, and 441,000 Asian American children. It also would lift 1.1 million children out of “deep poverty,” raising their family incomes above 50 percent of the poverty line.

The expanded tax credit would be fully available to 27 million children whose parents don’t earn enough to normally qualify for a full credit, while also increasing the credit’s payout from $2,000 to $3,000 for children ages 6 to 17 and to $3,600 for children younger than 6.

Biden makes food aid more adequate
President Joe Biden signed an executive order on Thursday that allows states to increase Supplemental Nutrition Assistance Program (SNAP) benefits and Pandemic-EBT benefits by 15% for children who have missed free or reduced price school meals due to school closures. That could give a family of three children more than $100 in extra benefits every two months. With hunger still terribly high, administration officials made clear that Congress must go further. Jeff Stein and Laura Reiley of the Washington Post have the report

“These actions are not a substitute for comprehensive legislative relief,” Deese said, “but they will provide a critical lifeline to millions of American families.” Biden’s order attempts in several ways to address the surge in hunger in America during the pandemic, with approximately 50 million people, including 17 million children, considered food insecure.

As part of this order, President Biden is also asking the U.S. Department of Agriculture to consider revisions to the outdated formula used to determine SNAP benefits, a move that could help increase food assistance to better meet the financial realities facing hungry families.

Number of the Day:
$294 million – The settlement reached between the U.S. Department of Justice, EPA, and Louisiana Department of Environmental Quality and Dow Chemical. This money will be spent on installation and operation of air pollution control and monitoring technology to reduce flaring and air pollution from facilities in Louisiana and Texas. (Source: CenterSquare)