The $2 trillion bipartisan pandemic relief deal reached early Wednesday morning will massively expand unemployment insurance, effectively turning it into four months of salary replacement for many workers sidelined by the coronavirus.
Expanding unemployment benefits was one of the key demands of congressional Democrats in negotiating the massive relief package.
A Democratic aide familiar with the negotiations said that the Democrats’ unemployment proposal was included within the economic relief package to give employers the most flexibility to make decisions in their best interest while still ensuring their employees or former employees are financially stable. Democrats argue that the GOP’s plan to provide grants to small businesses to keep their employees on the payroll, also included in the deal, would not cover many employees, such as those who have already been laid off, gig workers, and those who are self-employed.
The $600 a week, effectively a $15 hourly wage for people working 40 hours, would be in addition to whatever each state is giving their workers as base unemployment benefits.
“The $600 flat benefit every week makes the unemployment insurance more progressive,” said Kyle Pomerleau, an economist at the American Enterprise Institute. “The additional cash will be helpful for those who have very low incomes who have lost their job.”
Pomerleau said that the current unemployment insurance, without Schumer’s proposal, would be insufficient for low-income workers who would only get close to the minimum wage from unemployment insurance at the moment. Most state’s unemployment insurance is calculated based on a percentage of a former employee’s salary, meaning higher earners receive more financial aid and lower earners receive less.
Author: Nihal Krishan
Source: Washington Examiner: ‘Unemployment compensation on steroids’: Relief package will boost benefits by $600 a week