The Department of Labor reported skyrocketing unemployment claims on Thursday as the House prepares to take up a Senate bill that would increase unemployment compensation and broaden the range of workers who would be eligible.
The department said 3.28 million people claimed unemployment insurance in the week ending March 21, as entire sectors of the economy shut down in an effort to contain the COVID-19 pandemic. The initial claims were 3 million higher than in the previous week. The previous weekly record had been 695,000 in October 1982. The highest weekly number during the Great Recession was 665,000 in March 2009. St. Louis Federal Reserve President James Bullard said last weekend the unemployment rate rate could rise to 30 percent.
The jobs report was released after the Senate late Wednesday passed a $2.2 trillion economic aid bill that would increase the basic unemployment benefit by about $600 per week per individual for up to four months, and extend the period of unemployment eligibility to 39 weeks through the end of 2020. The current national average is $385 a week, according to the Center on Budget and Policy Priorities.
Speaker Nancy Pelosi, D-Calif., said the House will take up the bill Friday.
The legislation would also broaden eligibility to individuals who normally would not qualify for unemployment with a Pandemic Unemployment Assistance program that would provide benefits to the self-employed, independent contractors, those who have previously used up eligibility for weekly benefits, and others. The bill would also expand federal coverage of unemployment for workers at nonprofit groups and government entities by picking up half the cost. Nonprofits and government entities typically contribute to unemployment funds.
The Senate’s 96-0 vote came after the unemployment benefits in the bill became a sticking point Wednesday afternoon. Republicans complained that the added $600 per week, which the bill would make available through the end of July, would make unemployment compensation greater than the minimum wage and give workers an incentive not to return to jobs.
The Senate voted 48-48 to reject an amendment from Sens. Ben Sasse, R-Neb., Lindsey Graham, R-S.C., and Rick Scott, R-Fla., that would have capped unemployment insurance payments at 100 percent of a person’s salary before they were laid off.
Democrats claimed credit for boosting unemployment compensation from the bill that the Senate GOP released last week.
Sen. Richard J. Durbin, D-Ill., the No. 2 ranking Senate Democrat, said on the floor Wednesday the existing unemployment system wasn’t adequate in the current crisis. He said the legislation would put unemployment benefits “on steroids.”
“We expanded the period of additional unemployment compensation from three months to four months,” he said. “We think it’s reasonable to give people peace of mind.”
Durbin also disagreed with Republicans over the $600 weekly additional compensation. He said the Labor Department had said it was too difficult to use individuals’ incomes to calculate benefits. “The $600 figure that we came up with was an attempt to make sure everyone was made whole, ” Durbin said on the floor. “I believe this is not a windfall.”
The bill doesn’t give a price tag for the dramatic expansion of unemployment, but it specifies that 100 percent of the additional cash would flow to state agencies from the federal budget, with more funds for administration, including money to cover another requirement of the bill, that applications be handled online and by telephone.
The bill would expand unemployment compensation to a broad range of potential recipients who normally would not qualify: those who are ill with COVID-19 or taking care of sick family members, those taking care of a child whose school has been closed because of the emergency, those whose workplace is under quarantine or has been closed because of COVID-19, and even those “scheduled to commence a job” but still unemployed.
The bill also would waive the one-week waiting period for assistance common in many states for the benefits provided by the legislation.
Another provision would make an accommodation for low-income individuals who realize an increase in income via the expanded unemployment benefit by specifying that such additional income would not be counted for purposes of Medicaid or eligibility for the Children’s Health Insurance Program.
In a nod to the daunting task states face in expanding the unemployment compensation to a broad swath of those who normally would not qualify, a provision of the bill loosens hiring restrictions to encourage rehiring of former employees and others.
The bill also includes a provision that would encourage shared work, or job-sharing, by paying up to half of compensation paid to employees who share jobs, with the employer required to reimburse the state employment agency for half of the compensation.