- President Donald Trump’s unemployment proposal seeks to design a parallel system of benefits so that workers can receive an additional $ 300 a week from the federal government.
- But it states that people should earn at least $ 100 in state benefits, a threshold experts say that many part-time and gig workers out can get federal aid.
- “The people I care about the most are the ones who do their best to try and get back to work,” said unemployment expert Michele Evermore.
- One economist estimates that it could leave a maximum of 1.5 million workers.
- Visit the Business Insider website for more stories.
President Donald Trump is seeking to implement a $ 300 weekly supplement for state unemployment benefits for the unemployed.
It’s a 50% cut from the $ 600 level it was before the end of July. The administration reduced it from $ 400 after imposing a backlog of states with cash that were unable to chip in an additional $ 100 benefit as set out in a recent memorandum.
But one element in the memo has raised concerns about its potential to exclude some low-income people. It contains a provision stating that unemployed people are only eligible for federal aid if they already receive at least $ 100 in state benefits each week.
Alternatively, the unemployed should already receive government assistance – so that they are eligible for additional government assistance. Employers who could be excluded include part-time workers, low wages and gig economics, some of which previously collected the $ 600 federal benefit that expired at the end of July.
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“The people I care about the most are the ones who do their best to try and get back to work,” Michele Evermore, a senior policy analyst at the National Unemployment Project, told Business Insider. “They get a partial benefit, and that benefit will fluctuate weekly and drop below $ 100.”
Ernie Tedeschi, a former economist in the Obama administration, estimated about 1 million to 1.5 million workers may not be eligible for federal assistance. He said younger workers with a limited work history and others who jumped in and out of the workforce due to family care obligations were also at risk.
Lower earners are most at risk of becoming unreachable
“These are people who were already low-paid before they lost their jobs,” Eliza Forsythe, a labor economist and professor at the University of Illinois, told Business Insider.
See honey that 6% of unemployed people on state unemployment insurance receive less than $ 100 a week in benefits, and said they were disproportionately women.
But she said the overall figure is likely to be higher because her projection did not include people in federal programs such as the Pandemic Unemployment Aid. That was set up for gig workers and independent contractors who are not normally eligible for state benefits.
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Andrew Stettner, a senior fellow at the Left-leaning Century Foundation, said the $ 100 benefit threshold forced some workers to come up with little help and delay the arrival of the money.
“Some workers who have received the benefit in the past are not eligible for assistance and have to subsist on a very small amount,” Stettner told Business Insider. “And the second is that it’s going to be really slow to get the money out fast because they have to use a different screen.”
Only nine states pay minimum benefits above $ 100, according to the Department of Labor.
The number of weekly unemployment claims slipped below 1 million for the first time since March, according to new federal data released Thursday. The US registered 963,000 new unemployment claims last week and the unemployment rate stands at 10.2% – both figures higher than any point reached the Great Recession.
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Congress is still deadlock on negotiations for a next stimulus bill. Additional state aid and a federal boost to unemployment benefits are two of the biggest divisions between Democrats and Republicans. It allowed Trump to sign the executive orders, which did not have much direct effect.
Forsythe said the program included in the memo could leave some part-time workers who benefit in part from the reinstatement of the workforce, as they could lose out on the $ 300 federal supplement if they are starting to earn more.
“All this discussion about a disincentive to work, that’s a very explicit disincentive to work,” Forsythe said. “You start working out a little bit and you lose on that $ 300.”
