Unemployment Insurance Has Been a Critical Lifeline During the Pandemic

Good morning, Chairman Clyburn, Ranking Member Scalise, and members of the Committee. I am grateful for the opportunity to testify today. I am Michele Evermore, a senior researcher and policy analyst with the National Employment Law Project (NELP).

NELP is a nonprofit research, policy, and capacity building organization that for more than 50 years has sought to strengthen protections and build power for workers in the U.S., including people who are unemployed. For decades, NELP has researched and advocated for policies that create good jobs, expand access to work, and strengthen protections and support for underpaid and jobless workers both in the workplace and when they are displaced from work. Our primary goals are to build worker power, dismantle structural racism, and ensure economic security for all.

30 million workers have had access to a transformative benefit

A record number of workers have lost their jobs as a result of the pandemic. May’s jobs report showed a surprising 13.3% unemployment rate, lower than feared, but still an alarmingly high rate which would be much higher if it included workers misclassified as temporarily out of work or not actively seeking work due to relaxed work search requirements. Moving forward, we must continue to work together to fill the gaps in unemployment insurance (UI) coverage, increase equity, and maintain benefits for those who are already eligible, until the economy sufficiently improves. NELP applauds the bold action Congress has taken, but more can and must be done.

In this moment in history, it is easy to focus solely on the ways in which our lives, the world, and the economy feel out of control. As gaps in benefits for unemployed workers have taken center stage, it is important to remember that the CARES Act you enacted is having a dramatic and positive impact on tens of millions of people who are out of work and must stay home to care for their families. Particularly for workers who are paid low wages, these benefits are the difference between not making ends meet and being able to afford to stock up and remain home safely. These benefits are saving lives.

Compounding centuries of structural racism, the unemployment crisis is affecting communities of color most dramatically. A recent Washington Post-Ipsos poll from May showed that 16 percent of Black workers reported being laid off, as well as 20 percent of Latinx workers. At the same time, 11 percent of white workers and 12 percent of workers from other racial groups reported being laid off.[i] Because of the massive racial wealth gap in the United States, workers of color have less savings to tide them over until they find their next job. The Brookings Institution reports that Black families have one-tenth the wealth of white families.[ii] For all who are out of work, but particularly for Black, Latinx, and Indigenous workers and other workers of color, unemployment benefits are a vital lifeline in this time of crisis.

Take, for example, Alicia, a worker from the District of Columbia who was laid off in March. Alicia needed to be home to handle distance learning for her two teenage children. When her older daughter was deemed an essential worker, Alicia provided care for her granddaughter. She applied for unemployment insurance and received UI and the $600 Pandemic Unemployment Compensation (PUC) benefit. “I don’t know how I would be able to do anything without the $600,” she said. “I reached out to my mortgage lender and they allowed just one month of deferment. If it was just UI, it would have been much harder to pay my bills.” And when her employer made it possible to work from home, she returned to work, ending her UI and PUC benefits.

In addition to the benefits provided by state unemployment insurance (UI) programs, Pandemic Unemployment Assistance (PUA) is helping both middle-class self-employed workers and lower-paid workers in the gig economy (many of whom are misclassified as independent contractors) to weather an economic storm that has left them stranded in a largely shut down economy, with social insurance systems otherwise ill-equipped to provide them help in an emergency.

It is crucial to this discussion that we understand that we are not dealing with a cyclical or even structural recession like ones we’ve seen in the past few decades. We are dealing with an international pandemic that has forced us to shut down our economy for the sake of saving lives. Our state, local, and federal government have taken extraordinary but necessary measures to protect public health. Although we are slowly starting to reopen our economy, we cannot pretend that everything will go back to normal in the next few weeks, months, or even years.

A robust program of continued unemployment insurance will help ease this economic turmoil by keeping workers in place and ready to resume employment once it is safe to do so. But it will also provide a lifeline to workers who will not be able to return to work for whatever reason, including because their employers have gone out of business, because they must reopen slowly for safety’s sake, or because the demand is not there yet for the goods or services they offer. We cannot pretend that the coronavirus and the economic disaster it has wrought will simply disappear in a few months. The federal government has a responsibility to make sure that people do not suffer exacerbated economic pain or face undue risks to their health and safety.

Unemployment Insurance Has Always Been a Key Economic Stabilizer

Unemployment insurance is the only ongoing program we have that was built to distribute funds during an economic crisis. It was created in 1935 with the hope of stabilizing the economy by giving workers buying power when they find themselves involuntarily unemployed. UI succeeds in achieving several key goals:

• Help workers make ends meet. UI is intended to simply provide workers a benefit to help them make ends meet and support their families when they are out of work.
• Support people in their job search. UI helps to make sure that workers have the time and support they need to find a job that meets their skills and interests—one for which they are well suited and are likely to succeed in.
• Keep people connected to work. UI helps employers by making it possible for workers to maintain a connection to work, by providing access to employment services and encouraging work search, or through work-sharing.
• Uphold living standards. UI reduces the likelihood that periods of high unemployment will drive down wages for everyone. It helps people uphold their standard of living so that, as a society overall, we have wage stability.
• Preserve economic stability. In times of economic downturn, UI provides macroeconomic stability by maintaining overall worker buying power, which in turn supports businesses and the economy. In the last recession, economists Alan Blinder and Mark Zandi looked at the effect UI had on the economy and found that every dollar paid out in UI generated $1.61 in economic activity.

Neglect of UI Programs and Systems Has Hindered Their Effectiveness in This Crisis and Implementation of CARES Act Programs

For all its potential to help workers and to stabilize the economy, the UI system also faces serious challenges.  Shamefully, the UI program historically excluded domestic and agricultural workers, which had a disproportionate impact on Black and Latinx workers, and some of those exclusions remain in effect today—an area that obviously demands reform.

Moreover, state UI does not reach nearly enough unemployed workers, necessitating the enactment of the PUA program. UI also fails to provide adequate wage replacement, especially in a period of government-mandated mass unemployment, so Congress enacted the Pandemic Unemployment Compensation (PUC) program. Finally, all states struggled mightily to get these new programs up and running. Now, we must ask ourselves, how did a program that could do so much good in precisely a crisis like this one struggle so much?

First, we must acknowledge the massive decline in UI administrative funding, and lack of designated funding for the states to invest in and maintain a 21^st century information technology (IT) infrastructure. In 2020, national administrative funding for UI was $2.14 billion. Back in 2001, that funding was $2.21 billion. Given increases in the cost of living and the growth in the working population, that marks a dramatic reduction over time.

Using a simple inflation calculator on the Bureau of Labor Statistics website, the 2001 funding level is roughly $3.2 billion in today’s dollars. At the same time, the highest number of new claims for any single week in history before this crisis was 695,000 in October of 1982. That is in contrast to new claims of 3.3 million for the week ending March 21 of this year, which were followed by 6.6 million in the two following weeks, 5.2 million the week ending April 11, and continuing initial claims in the millions every week since.

This dramatic and instant decline in employment is unlike anything we have ever seen. Historically, recessions have a much slower onset and much lower new claims every week. The fact that UI systems did not collapse entirely under the weight of the demand, particularly given the low funding levels they had to work with, is a testament to the enormous dedication of UI administrators and staff across the United States.

It is also important to understand that our unemployment system is a patchwork of various state systems, some of which have been modified in recent years to intentionally make it more difficult to access benefits. Indeed, just last summer, NELP published “Are Unemployment Systems Still Able to Counter Recessions?” detailing how many state systems were not recession-ready precisely because of the steps they had taken to make their UI systems impenetrable to so many unemployed workers.[iii] Figures 1-5 at the end of this document detail that benefit duration and adequacy are worst in states that have the greatest numbers of workers of color, as well.

As states have moved to largely online processing, many have created systems that are inaccessible to workers on the other side of the digital divide, workers with limited English proficiency, and people with disabilities. For instance, as NELP outlined in its prescient 2015 report on the Florida unemployment system, titled “Ain’t No Sunshine,” the U.S. Department of Labor’s Civil Rights Division ruled that Florida’s system was discriminatory and inaccessible.[iv] An example of this unequal access is Florida’s procedure for directing calls needing translation services: the procedure was to ask claimants in English what language they needed services in, but to speak slowly. The system also had no TTY or other assistive services for callers with disabilities.

State legislatures, pressured by business interests and looking to reduce the number of people eligible for unemployment insurance, have turned to a variety of benefit restrictions, including: (a) dramatically reducing duration of benefits; (b) narrowing the definitions of qualifying separation events; (c) increasing the amount of wages workers need to earn to qualify for UI; and (d) imposing stricter, yet no more effective, work search requirements. In addition, many states have narrowed workers’ access to UI benefits by implementing technologies that may limit accessibility of the application processes.[v]

As a result, the nationwide percentage of jobless workers receiving UI last year was only 27 percent, and as low as 9 percent in North Carolina, as compared to 36 percent across the country before the onset of the Great Recession. In states like Florida, Georgia, and North Carolina, where state legislatures slashed the duration of available benefits far below the standard 26 weeks, the rates of unemployed workers receiving UI were below 15 percent, or nearly half the national average.

The decline in UI recipiency also reflects a dramatic increase in workers facing erroneous denials of their benefits by state UI agencies. According to U.S. Department of Labor, Employment and Training Administration (ETA) data on erroneous denials, the denial error rate for separation reasons in 2017 was 17.44 percent, while that error rate in 2007 was only 8 percent.[vi] Similarly, in 2017, 17.54 percent of benefits were erroneously denied for nonseparation reasons, while in 2007, the improper nonseparation denial rate was only 9.9 percent.[vii]

Part of this increase in erroneous denial has to do with the fact that systems have been over-calibrated to prevent overpayments at the expense of paying appropriate benefits. States have programmed their computer systems to pause applications at every decision point, which can generate multiple eligibility determinations and denials. As we have seen, that is going to slow down benefits getting to the public when there is a crisis.

Overconcentration on suspicion of fraud, especially when not coupled with a corresponding focus on employer fraud, worker misclassification, and UI system errors and failures, can wreak havoc on UI programs. For example, as part of the 2011 unemployment insurance provisions passed in Michigan, the state dramatically increased fraud detection efforts and penalties. When the state upgraded its information technology system, it added algorithms that over-flagged claims for fraud. That system, MiDAS, flagged at least 37,000 workers for fraud, with a staggering 93 percent inaccuracy rate. Workers impacted had to pay back four times the benefits they received plus 12 percent interest, and many were driven into personal bankruptcy.[viii]

The Department of Labor must examine why there is such a stark increase in erroneous denials of benefits over the past decade and should impose checks on states that are routinely mischaracterizing processing errors as claimant fraud.

DOL Must Issue Complete and Accurate Guidance About Workers’ Right to Refuse to Return to Unsafe Work; If It Fails to Do So, Congress Must Act

Any steps that states take to reopen their economies must be done with the utmost care for worker health and safety. No worker should be expected to return to a workplace where the employer does not implement sufficient measures to safeguard employees against exposure to COVID-19.

This is both a workers’ rights and a public health issue. If workers are forced to go back to unsafe conditions, employers’ negligence could result both in workers getting sick and in COVID-19 spreading further throughout the community, prolonging the duration of the pandemic and the number of people being infected, while also exacerbating economic problems in the future. Rushing to reopen and forcing workers back to unsafe environments will only lengthen the duration of the crisis and worsen long-term economic conditions—particularly for underpaid workers of color and women of color who are suffering higher rates of infection and mortality in this pandemic due to systemic racism related to healthcare and employment.

Workers receiving unemployment insurance are not permitted to refuse “suitable work” and continue to get benefits. However, workers are allowed to refuse unsuitable work. As requested by more than 20 members of the Senate,[ix] the Employment and Training Administration (ETA) must make it clear that suitable work does not include unsafe work, referring to situations where the employer has not taken the minimum precautions set forth by the Centers for Disease Control and Prevention’s COVID-19 workplace guidelines, particularly if the individual is an older worker, immunocompromised, or more vulnerable to infection in some other way (e.g., because of a disability, or if the worker is caring for a vulnerable household member). ETA has thus far failed to issue clear guidance on the issue, which contrasts with helpful COVID-19 suitable work policies recently issued by California, Connecticut, Colorado, North Carolina, Texas, and other states.

Virtually every state UI law is clear that an offer of work that exposes a worker to an unreasonable degree of risk to their health or safety is, by law, unsuitable. For workers collecting regular UI, the federal “prevailing conditions of work” provision applies (26 U.S.C. Section 3305(a)(5)(B)), which all states must incorporate into their UI laws. This provision, which dates back to the Social Security Act of 1935, prohibits a state from denying UI to a worker who refuses work if “the wages, hours, or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality.” Here, the issue is whether the health and safety “conditions of work” are sufficiently serious to pose an unreasonable threat to the worker which, in turn, suppresses the working conditions of other workers in the labor market.

For workers collecting Pandemic Unemployment Assistance (PUA) under the CARES Act, the federal “suitable work” regulations governing the Disaster Unemployment Assistance (DUA) program apply to protect workers against returning to work that is unsafe to themselves, their families, or to the public. The regulation (20 C.F.R. 625.13((b)(2)), which corresponds to the state “suitable work” laws, provides that “a position shall not be deemed to be suitable for an individual if the circumstances present any unusual risk to the health, safety, or morals of the individual, if it is impracticable for the individual to accept the position. . . .” The federal “prevailing conditions of work” requirement also applies to the PUA program as does “any comparable” provision of state law.

Workers asked to return to work, particularly in the early phases of reopening, are especially at risk. Jobs such as meatpacking, hairdressing, retail, home care, and food service are poorly paid and are filled disproportionately by workers of color. Underpaid workers are far less likely to have access to counsel to advise them of their right to refuse unsuitable work. What will likely happen is that employers will flag these workers as refusing suitable work, and those workers will then bear the burden of proving that the work they refused was unsafe, which is a huge burden and will keep them from getting benefits while the dispute is litigated. Either Congress or the DOL must make clear that unsafe work is not suitable work and establish a safety standard that states and employers must follow.

Congress Must Reauthorize the Pandemic Unemployment Compensation Program in Response to the Exponential Growth in Unemployment

The Pandemic Unemployment Compensation (PUC) program, which temporarily provides an additional $600 weekly to qualified unemployed workers, is an essential benefit in this moment, as it attempts to make up for the fact that UI benefits only replace approximately 40 percent of wages.

Efforts to undo PUC fail to acknowledge the reality that working people and communities are facing and what is really going on in our economy. PUC is also critically important to many self-employed workers who were struggling to make ends meet but can now comfortably work on plans to re-open their businesses when the health crisis passes.

At the same time, we should be asking why underpaid workers—who will hopefully be making closer to or perhaps even above their regular wages, allowing for greater economic stability in these uncertain times—are being expected to work for so little compensation in the first place. Wages and unemployment benefits have stagnated for decades. Many workers cannot live on the wages they are making, much less on an unemployment benefit that is a small fraction of their regular wages. This is particularly true for women of color. While the overall gender wage gap means that for every dollar a white man makes, a woman makes 82 cents,[x] when disaggregated by race, Black women earn 63 cents, Latinx women earn 54 cents, Native Hawaiian and Pacific Islander women earn 65 cents, and American Indian and Alaskan Native women earn 59 cents.[xi] Black men earn 73 cents and Latinx men earn 69 cents to the dollar of white men.[xii]

Right now, the federal government should be focused on ensuring that workers can survive this crisis and that the economy gets the maximum boost possible with the consumer buying power generated from the PUC benefits. Congress must ensure that workers are able to maintain an adequate income while they have no jobs because of public-health-necessitated shutdowns, and the unavoidably slow return to a normal economy. We must also recognize that there are certain industries, such as those involving large crowds like sporting events and live performing arts, that are not going to be able to safely “reopen” anytime soon.

Indeed, in May, the official unemployment rate surpassed 13 percent, which is higher than the peak unemployment rate reached during the Great Recession. This number represents job loss up to the middle of last month, and we have seen millions of new initial claims flow in since that time. By pulling the plug on the PUC program, which will impact an estimated 10 million workers and self-employed business owners, the economy will suffer a massive economic hit of over $17.9 billion dollars per week if insured claims hold at mid-May levels. The chart at the end of this testimony details the dollar impact by state based on continued claims reported for the week ending May 23.

The PUC benefit boost is also necessary, in large part, because so many states have lowered their unemployment insurance benefit levels to the point where they cannot effectively aid workers and provide countercyclical stabilization during a recession or other crisis. For example, the average weekly unemployment benefit in the U.S. is just $370 a week, which replaces only 44 percent of the average worker’s weekly wage. As NELP has reported repeatedly, the real problem is that too many workers who qualify for benefits cannot access them.[xiii] As we have seen across the country, filing for unemployment insurance can be arduous.

As workers in low-wage jobs are facing mounting bills as a result of the COVID crisis, including back rent and other major expenses, the increased income provided by PUC is often all that separates workers and their families from homelessness.[xiv] When workers are standing in line for paper applications for unemployment insurance,[xv] spending hours on hold while trying to apply over the phone,[xvi] or when computer systems continue to crash,[xvii] it’s crucial that Congress and state governments focus on making sure everyone who lost work can get their benefits, rather than anti-worker fallacies about people “refusing to work.”

PUC is a lifeline and does not create a disincentive to work. As discussed above, under every state unemployment insurance law in the country, a person who refuses suitable work will be found ineligible for benefits. There are some situations that can be regarded as good cause to leave a job for personal reasons, such as escaping domestic violence, or for work-related reasons, such as preserving worker health and safety—but the prospect of a higher unemployment benefit is not one of those good causes.

Additionally, several guidance letters issued by ETA have made it clear that refusing work to receive unemployment benefits can be fraud. Workers are informed before applying that they cannot claim benefits for which they do not qualify and if they do, they will need to pay them back, and may even face steep financial penalties.

Moreover, we should not overlook how critical it is for workers to maintain their connection to a job right now. For so many people, there is more to a job than the paycheck. In these uncertain times, workers are seeking stability, and the reassurance of continued work is something that more and more workers can no longer count on.  Their jobs may be the source of health care benefits, retirement security, and possibly equity in the company. Workers are also well aware of how resume gaps can harm long-term job prospects, even in this era.

Finally, we need to note that re-employment bonuses are not the answer. They are based on the premise that workers are not looking hard enough for work. The reality is that there is a positive correlation between duration of unemployment and finding a suitable replacement job that workers remain at longer.[xviii] Workers and employers benefit from having an unemployment system that is designed to get workers back to the right job, and not just any job.

While some policymakers expect that most workers will be asked to return to the same job that they had before, the longer this pandemic and the recession continue, the less likely it is that workers’ previous jobs will exist. Moreover, vast swaths of industries may never return to normal, like travel, gyms, restaurants, sporting events, and music.[xix] That will also impact all the industries that feed them. We may be looking at a massive economic restructuring, the answer for which should be access to better job training to ensure good job matching, rather than bonuses to encourage workers to take a less suitable replacement job.

Policymakers need to learn the lesson of the Great Recession, from which many individuals, families, and communities never recovered. The response to the last recession did not inject enough money and was not sustained enough to ensure that individuals and communities could fully recover from the economic devastation.

This reality also underscores the ways systemic racism impacts which communities federal and state governments invest in—during times of crisis and always. Cities like Detroit and Flint were unable to recover from the last recession and still have astronomical unemployment rates, and the Black unemployment rates in those cities is 17.4 percent and 25 percent, respectively.[xx] When unemployment reached 14.7 percent for the broader population in April, it was rightly viewed as a national emergency, but there are communities for whom that number is a persistent reality.

The families and communities that were most harmed in the last recession, unsurprisingly, were disproportionately people of color and women—who already were dealing with generational racial wealth gaps and gender wage gaps. Today, we are in an economic crisis, with workers in a worse place economically than before. No community, least of all Black communities and other communities of color, can afford for policymakers to aim low in terms of emergency aid.

Any argument being made that is not focused on ensuring all workers have the income needed to survive in this moment is ignoring a very important truth: Ensuring people have economic security is the answer to economic stability in good times, and to recovery after times of crisis. After all, the economy is not an entity unto itself, but rather, is the direct result of the economic strength and security of the people who comprise it.

Expanding State Work-Sharing Programs Can Help Businesses Reopen Responsibly, While Ensuring Workers’ Safety and Economic Security

Amidst the tensions playing out between calls to reopen the economy and the need to ensure workers are safe and healthy, we believe a program known as work-sharing holds tremendous promise as a solution that will benefit both workers and employers. With over 40 million workers already laid off and the underlying cause of our economic disruption likely not remedied for the foreseeable future, we need to reject all-or-nothing approaches to the question of economic recovery or individual worker health.

Work-sharing programs (also known as short-time compensation) saved half a million jobs in the Great Recession, and in 2012, Congress enacted federal legislation (the Layoff Prevention Act, sponsored by Senator Jack Reed) that provided incentives to states to enact work-sharing as an alternative to layoffs. While work-sharing was originally envisioned—and is still primarily used—as a voluntary layoff alternative when employers first face a temporary financial downturn, the program can also be a vital tool for businesses that have already laid off their workers but need to ramp back up slowly.

Through work-sharing, employers who need to rebuild their operations gradually can spread the impact across the workforce by substituting the number of layoffs they would otherwise be imposing with an equivalent number of reduced work hours spread over a larger number of employees. So, for example, an employer that has already laid off all 20 employees but has only enough work to call back 10 could, instead of keeping 10 workers on layoff, bring back all 20 employees half-time. Under a work-sharing plan, all employees would receive half pay and a work-sharing benefit that is equivalent to half a weekly UI payment (as well as any employer-provided fringe benefits). As business continues to pick up, hours could be increased across the workforce with corresponding increases in wages and decreases in work-sharing payments.[xxi]

This kind of rebuilding approach brings tremendous advantages for workers and the economy. First, the sooner that workers and their employers reconnect, the greater the likelihood that workers will not suffer the economic harm that comes with long-term unemployment or having to start over with new employment. Second, businesses benefit by retaining trained employees, and if they can provide those employees enough financial security between wages and work-sharing benefits to keep them on board through tough times, they will come out stronger on the other side, when customers and demand for products and services fully return.[xxii]

Third, we are looking at an economy that will not be able to sustain the levels of employment that it did pre-COVID for a long time. Sharing the available work over the workforce in the short-term is a common-sense solution that will benefit all of us in the long run. Companies that have used work-sharing through down times routinely talk of its positive impact on employee morale.

Through the CARES Act, Congress has already acted to renew incentives and provide funding to states to improve and promote work-sharing, but more needs to be done. Only 27 states have active work-sharing laws today, and it is time to ensure that that this voluntary program is offered as an option to employers in every state.

In the wake of an economic tsunami that has left one in four workers in the U.S. unemployed virtually overnight, we need to update work-sharing law to streamline its usage by employers struggling to find their footing as they come back online. Businesses should be able to access the program quickly, and program rules should provide employers with maximum flexibility in deploying hours reductions in lieu of layoffs. Continuing federal reimbursement of work-sharing benefits beyond the end of this calendar year will be vital to bringing new businesses to the program.

Finally, more needs to be done to promote work-sharing usage by state and local governments and nonprofits. As the next wave of financial battering comes in the form of state and local budget cuts, government and nonprofit jobs can be preserved through strategic hours reductions using work-sharing.

Unemployment Benefits Are Making a Profoundly Positive Impact on Workers and Families Throughout the Country

Though we have heard so much in the news about the administrative struggles to get PUA and PUC up and running, it’s important to highlight that these programs have already provided an essential lifeline for millions of workers and their families across the country. These benefits have prevented families from making untenable choices such as going without healthy and adequate food and necessary medications, or not paying utility bills, mortgages, rent, and health insurance premiums. In a time of such anxiety and uncertainty, these benefits have given people a measure of economic security, allaying at least some of their fears.

Additionally, these benefits have allowed people to keep spending money in their local grocery stores, to perhaps support local restaurants with take-out orders, and to keep contributing to the economies of their communities. As demonstrated in the table below, should Congress fail to reauthorize PUC, an estimated $17 billion per week will disappear from families, which means it disappears from our economy as well. Even as we slowly reopen businesses, the withdrawal of this important source of income support will dramatically hinder recovery for individuals, communities, and the economy overall, making the scaling up of businesses slower under the best of circumstances, and likely impossible for far too many.

Below is a sampling of stories from people throughout the country who are surviving because of the combination of UI or PUA and the PUC benefit. NELP thanks MomsRising, UNITE HERE Local 355, the United Steelworkers, Actor’s Equity, SAG-AFTRA, the American Guild of Musical Artists, Business for a Fair Minimum Wage, International Alliance of Theatrical Stage Employees, the Department of Professional Employees, UNITE HERE Local 355, Make the Road New York, Make the Road Nevada, Ohio Organizing Collaborative, Step Up Louisiana, and One Pennsylvania for sharing these first-hand accounts with us, and we thank these workers for allowing their stories to become part of the official record in today’s hearing. Though the implementation of PUA and PUC was troubled, to say the least, now that all the states have the programs up and running, this is truly the best way to make sure we get money into the hands of people and families who desperately need it.

• Carlos worked as a bartender at Miami International Airport for six years and was laid off during the current COVID-19 pandemic. As a single father to a four-year old daughter, caring for his parents and two chronically ill dogs, Carlos’ monthly bills exceed $1,300. For Carlos, “$600 a week is necessary.” He shares, “I worked six years without stopping, without taking a day off. I think I at least deserve to be able to maintain my family during this time of crisis. He adds, “We fought hard to receive Florida’s unemployment benefits and we’re still fighting. So many of my coworkers haven’t received any unemployment checks from Governor DeSantis. This federal aid is the only income many families have.”
• Ricardo worked as a bellman at Florida’s famed Fontainebleau Hotel for 8.5 years before being laid off in March. This June, he will lose his health insurance. For Ricardo, who is diabetic, “$600 is necessary for me to survive, including being able to pay for my medications.” He shares, “I have been paying my taxes since I was 14 years old. I have been working for decades. I’ve never collected unemployment. And this is a time we need the government to step up and do their job. I can’t think of any other state that’s put citizens through what Governor DeSantis has done to us here in Florida. This money is not a luxury, it’s a necessity.”
• Karen worked as a Player’s Club representative at Gulfstream Park Racing and Casino in Florida for nine years before being laid off during the current COVID-19 pandemic. Karen is a single mother to a nine-year old daughter. Karen needs to continue to receive $600 in federal unemployment to keep paying her bills. She said, “My fear is that me and my daughter will end up homeless without this federal aid. I waited over a month to receive Florida’s unemployment and honestly $275 a week is just not enough. This federal aid is important to help us for all we do as taxpayers.”
• Angie from Missouri writes that “I am living on unemployment so for now I’m ok. I work for the school system as a classified employee. We are paid hourly. I don’t know when or if I’m going to go back to work. My passion is working with kids but my future is uncertain. After the $600 a week pandemic relief expires in July, I will be getting $141.00 per week. I can’t live on that. I have a special needs son and it isn’t easy on a good day.”
• Zinnia from Florida tells us that “My family and I were greatly impacted during the pandemic. We were left without jobs, no income and unfortunately, I had to wait 2 months before I could receive any unemployment benefits due to all the issues FL had with their system and processing claims. I’m finally receiving the benefits, but I’m not out of the woods yet. Due to the long wait, I had to borrow money for rent and am so behind on bills. I can only pray that the benefits be extended until we can all get back on our feet. I have a compromised immune system and honestly too afraid of exposing myself too soon to the public.”
• Beverly from California reports that “When I was laid off from my job due to COVID-19, as a single mother I was petrified. The added $600 in unemployment benefits has been a lifeline, the difference between keeping a roof over our heads and homelessness. With no end in sight of this pandemic, we need the expansion of unemployment benefits to make sure no one gets left behind in this situation we had no control over.”
• Peggy from Michigan: “Unemployment insurance has allowed me to pay my bills and feed my family. I have not been able to work because I am a parent monitor, which means that I monitor parental interaction with their children under supervised visitation by order of the court system. We are not set up to have parental visits at this time. Thank you for allowing me the ability to maintain an important part of my life.”
• Korry from Michigan is a U.S. veteran who lives with his wife, and their five children. He met his wife at Panera, where they both worked, but they have been laid off since shortly after the stay-at-home order came out. Korry is collecting unemployment while he stays home to take care of the kids, but his wife, who is pregnant, got another job at Amazon to support them rather than collect unemployment.  Without the current $600 per week, Korry would be getting less than $300 per week based on his prior earnings with Panera.  Normal state weekly benefits even when combined with Brittni’s salary would not be enough to support their family of nearly eight. The $600 per week makes it possible for Korry to be the children’s caretaker. The day care they used to rely on is no longer operating during COVID-19 and the only family nearby are their great-grandparents, both of whom are elderly and would not be able to watch five children under 10.
• Stephanie from Michigan and her husband have two children, ages 5 and 3. He works from home as an IT specialist for the University of Michigan.  But Stephanie ran a home daycare where she took care of children for 8 other families.  Because of COVID-19, she was forced to shut down her daycare entirely and is grateful for PUA because she does not qualify for UI as she is self-employed.  Michigan has a low maximum weekly benefit so without the additional $600 in unemployment benefits, her family would have already depleted their liquid savings and would have to borrow from retirement savings and family members to make ends meet.  Stephanie and her husband use the $600 not just to stay afloat, but to donate to local charities caring for people in need and to support local businesses such as grocery stores and restaurants doing take-out and delivery service so they can help keep their local economy afloat.
• Casey from Michigan is a bartender for a local craft cocktail bar and was in the first wave of people to lose their jobs due to the COVID-19 shutdown. His last day of work was March 16^th. Because he was early to start receiving benefits, Casey did not receive the additional $600 for the first two weeks of his unemployment. When he took account of his finances after receiving the first check, he realized that even with his partner still working that he would have to deplete his savings for them to get by without her shouldering most of the burden.   When he received his first check with the additional $600, he remembers breathing a huge sigh of relief. His mental state went from crisis management mode to a feeling of stability, since the $600 brought him much closer to what he was making at work. The additional $600 has also allowed him to support local businesses that are still open.  Casey says he would love to go back to work since he really enjoys the small, locally-owned bar that he works for and he’s worried that they are hurting. Whether or not he was receiving the $600, Casey says he would go back to work. For him, the most important factor in his decision to go back is whether the bar can reopen safely for its workers and its customers.
• Jennifer from New York: “My husband and I are both unionized workers in the Broadway theatre; I work onstage as a member of Actors’ Equity Association, and he works backstage as a proud IATSE member. Like many who work in the arts, we book jobs months, sometimes years in advance to manage our income and ensure we maintain health care. When the pandemic forced theaters to close, within 24 hours we both lost not only all our current income, but also close to $110,000 in income we were counting on for the rest of the year. There is no end in sight right now. All of us working in the live arts will be the last to go back to work.  We are also the parents of a 19-month-old son, for whom I am the primary provider of childcare. Rents are high. Diapers are expensive. Utility bills are creeping up. Our mobile phones and internet costs are even more necessary as we search for new jobs and, in my husband’s case, train for a career change. Without an extension of the emergency benefits, we will be forced to give up our apartment and move in with my parents, but even that is an expensive, complicated solution. Due to my parents’ health conditions, we will need to spend two weeks in quarantine at a hotel before we can safely join them. And when Broadway does eventually reopen, we will not be in the city to return to work. PUC is the only thing keeping our heads above water now. We are doing everything we can to weather this storm: staying home, not visiting grandparents, exploring new careers and taking free online courses. It’s not enough.”
• Ben from California is and actor with a wife, a 10-year-old son and two dogs, both of whom have medical conditions which can be expensive from time to time. He earns most of his income from self-employment, but because of residuals that he earns from past work, he has just enough income to qualify for a low UI benefit, rather than a more robust PUA benefit.  “While my wife continues to work at home (thank God!), making her salary and keeping our health benefits, her monthly income covers about half of our monthly expenses (which include a mortgage, various insurances, utilities, food, etc).  So until I get consistent UI every two weeks, we are dipping into our savings to pay for life’s necessities.  We also have had to curb a number of expenses and lifestyle habits…not donating to charitable causes, not ordering from restaurants more than 2x a month, changing our cable subscription to a basic plan, finding and using coupons for grocery store trips, and probably the hardest one…keeping the AC off as much as possible despite hot temps.  So yeah, it hasn’t been easy.  If the $600/week disappears before I regain employment, we will undoubtedly be forced to make some additional really difficult financial decisions about what else we’ll need to cut — and possibly have to move out of town where the mortgages wouldn’t be as high.  Bottom line is that it’s just insane that physical work I did 3-15 years ago is preventing me from receiving the full financial assistance Congress intended me to receive right now via the PUA.”
• Bonnie from California is an actor who before the pandemic, made a comfortable living, earning about $200,000 per year. But all the work she had lined up for this year ceased and filming may not resume for a long time.   She applied for benefits and though the vast majority of her income is not earned as an employee, she made just enough in recent years as an employee that she was awarded $65 per week in UI, rather than the weekly maximum of $450 per week.   Though she wants Congress to remedy the penalty that mixed-income earners are facing, she also writes that “I am grateful indeed for the $600 the government is adding to my $65.00 U.I. compensation because it is crucial to my getting by right now. I don’t know what would happen were that to disappear at the end of July!  Even with that weekly amount, I am running up a serious credit card bill.  The entire film industry is shut down… with everything being pushed until ‘early next year’ at the soonest. There will be no work for some time. We really need some help here.”
• John, who runs a chiropractic practice in VA tells us that “Unemployment benefits, especially the $600 per week, helped keep my family afloat and out of debt while I had to close down my practice. As someone who has contributed to the federal government for years, it was nice to know that the federal government was there for me when I needed help.”
• Axel lives in Queens, NY: “I am one of those fortunate enough to receive unemployment benefits during this pandemic. Right now, I receive $979 in weekly benefits, $600 of which is Pandemic Unemployment Compensation (PUC). All of it goes towards covering only the most basic necessities for me and my family: our rent, which is $1,500 per month, utility bills, food, medical costs, and transportation. Everyone in my family has fallen ill to COVID-19—my brother is still struggling to recover—and this has caused significant psychological and emotional stress on top of the financial stress I feel to make ends meet. I had an emergency operation at the beginning of the pandemic, and I am terrified that I will be unable to pay for medical care should something else happen to me in the months to come. Without the extra $600 in PUC, life in New York would be impossible. Even with benefits, we must rely on food pantries to keep us from going hungry. We must extend PUC benefits past July, because $379 is not enough.”
• Ahmad in Pennsylvania writes: “On March 16, I was laid off from my job as a line cook at a Philadelphia restaurant. I’m a community college student but I worked full-time at the restaurant. When I was working, I was able to help my parents pay for groceries and help my mom cover the costs of starting her new business. I also was trying to save up so that I could move out of my parents’ place and afford a down payment on a house. Without the $600, my benefits would be very low — $219/per week. Because the restaurant industry in Philadelphia has been destroyed by this pandemic, I’m afraid I won’t be able to find a job for a long time. If Congress cuts my benefits to $219 per week, it would really be hard for me to help out my family. I’ve been working so hard to build a better life for myself, but these cuts would send me back to square one.”
• Mary in Ohio: “On March 13, 2020, I was laid off from my job as a substitute teacher and was not able to pay rent for 2 months. I struggled getting through to ODJFS through phone and email with no resolution for my specific issues. The extra weekly $600 is crucial to ensure that Ohioans can meet our financial needs. With the $600, I can pay my rent, put food on the table, and cover my other bills.”
• Cindy from Ohio is self-employed and is supporting herself on PUA and PUC: “I’m a self- employed painter of 18 years finding myself as one out of the countless 1st-time filers for unemployment.  My last day of work was March 14th, 2020 and as a caretaker of my compromised parents, my imperative is to keep them safe. After Governor Mike DeWine’s request to stay at home, I waited 10 weeks for the PUA system to be “built” with no income!  After FINALLY receiving the $600 addition in weekly “back pay” (which is less than my normal income), I can make sure my overdue mortgage can be brought close to current, that my taxes that are due in July will get paid, and that several other bills will get partially paid. That $600 is security that I need while trying to move forward into an unknown workscape. Due to the public health crisis, my projected work is about 30% of what is normal for the last 3 months! I HAVE to protect my parents’ health first. But without the continued $600 benefit, we are being forced to choose between our health, the health of our loved ones, or our jobs, when we did not choose this path! This is unacceptable and beyond cruel. I’m certain none of our public officials would choose to walk in our shoes, but I hope they can imagine being in them!”
• Katie from Ohio: “I work in education and am only getting $340 every two weeks. Since I am not able to pay all my bills with this amount, I am being reported to the credit bureau and my credit score has dropped significantly. I was told by my employer that due to the pandemic they’re making cuts & that I will not have a job when/if school opens in the Fall. I have MS (multiple sclerosis), so for my personal health & my family’s safety, I am currently looking for a remote position. I have applied to 15 job openings, but I have yet to receive any interviews. Ohio’s unemployment system has failed to provide livable unemployment relief & I am struggling with paying bills. My family and I need assistance, and that extra $600 a week would allow me to pay my car, mortgage, medical and other bills. Please expand PUA & extend the $600 a week past July 2020.”
• Brittany from Louisiana: “The recent payments of unemployment have been a great help to my finances. I recently bought a car, and between that, food, and providing for my son, the additional $600 from the CARES ACT has really helped me out.  We need to extend these benefits and start paying people real wages.”
• Jason from Nevada: “Receiving the $600 has helped me keep all my bills up-to-date. Otherwise, I would miss payments and then would have to pay late fees. I would go further into debt like so many people I know during this pandemic. These benefits have taken the place of what I would have gotten if I was still working at the job I had before this pandemic. Without them, I would not be able to keep up.”
• Samantha from Nevada: “I’ve been working for MGM Resorts since 2017 and as a union worker, I always felt secure in my workplace. Before the pandemic, I transferred to the MGM Resort Pool and unfortunately was laid off before I could even have my first day of work. I had enough money saved up to pay my upcoming bills but not enough to last me through the months to come. Thankfully with the help from unemployment benefits, I’ve had a weight lifted off my shoulders from the stress of not knowing how I was going to pay my next car payment, rent, and my other monthly bills. I’ve been able to live with my family with one less thing to worry about through these hard times. I strongly believe we need to keep unemployment benefits because I don’t know how long it will be until resort pools will open back up to the public again. Not having that income would affect me drastically.”
• Joe from Pennsylvania: “Our company closed due to the Coronavirus.  We had 65 people working, most between the ages of 30 and 63 years, who are now on unemployment.  One of my coworkers has prostate cancer and, like the rest of us, he’ll be losing his medical insurance come July 1st.  A lot of us are in our 50s and are not yet able to go on social security, but we still have car payments, mortgage payments, and utility bills on top of paying for our family’s medication and food.  It’s tough to get a new job when you’re in your late 50s and 60s, especially in this environment.  This is why it is essential for the benefits to continue a bit longer.  We need these additional unemployment benefits to help our families pay for necessities while we look for work.”
• Jared from Pennsylvania: “I worked at my company for about 1 year before COVID-19 hit and we were forced to leave our positions. While unemployment compensation from the state is helpful during this time of joblessness, it’s not enough to cover living expenses, and the additional $600 per pay period for unemployment is necessary because our company has shut off our medical insurance.  It’s stressful to think about how I would be able to cover hospital expenses or prescription medications if I’m only receiving the state unemployment compensation. The $600 makes scenarios like this a little more manageable. I [also] have close family members who are greatly affected by this and already have severe medical conditions that require expensive medicines previously covered by health insurance offered by their employer. The loss of the $600 would mean that their prescriptions cannot be purchased because they are too costly.  I ask that the additional $600 per pay period be extended for people on unemployment compensation until the end of this year. Not only will this provide additional funds to cover utility bills and medical insurance, it will give me time to find another job should our company shut down business permanently and not be able to offer employment.”
• Justin from Florida: “I’m a stagehand technician/rigger and proud member of I.A.T.S.E. Local 647 of this month, and I’ve been a stagehand technician since I was 22 years old. Last October, for the first time in my life, I was able to get a mortgage and purchase my very own home. Then Covid-19 appeared. I was immediately told to stay home, with no means to pay my bills or put food on the table. To make matters worse, I live in Florida, where the unemployment program pays so little for such a short period of time, it could be construed as a joke. I now have a mortgage to worry about and am afraid I’ll lose this house as fast as I got it. And the real cherry on top is that with no end in sight regarding COVID itself, I don’t know when I’ll be able to return to work. I’m not sure our industry will ever truly recover from this. Even with a vaccine, so many Americans are so fearful of coronavirus and mass gatherings that I just don’t see the ticket sales being high enough to support a show staying out on tour. We were the first industry to be laid off, and we’ll be the last to return. We have been absolutely devastated.  It is my hope that Congress may understand just how unique and urgent our situation is and come to our aid by extending the Cares Act $600 per week. To be clear, and I feel I can speak for most of us in the entertainment industry, where most folks deign to work, we actually dream to work. I don’t want to have to rely on federal assistance to scrape by. I want my job back. I love my job, and I wouldn’t trade it for anything in the world. I thank you for your time.”
• Sarah, a musician in New Jersey: “Our industry was among the first to lose work and will certainly be among the last to return to work. The expansion of the extended benefits program beyond July 31 will be essential to my financial wellbeing. The additional $600 per week is the difference between paying the rent or not paying the rent. Full stop.”
• James, a musician in California: “Simply put, unemployment insurance with added PUA financial assistance has kept my household afloat. Without this assistance I would have to seriously consider abandoning the profession.”
• Sara, a musician in New York: “The stress of this uncertainty, and the precarious financial situation we find ourselves in, is amplified by a reality that will come to pass in October: the birth of our first child, a daughter. The PUA has been absolutely essential to our well-being since I first went on unemployment in April. PUA has helped us remain solvent and provided means for us to cover the essentials, like nourishing food for my pregnancy. The continuity or disappearance of the PUA $600 per week will single-handedly determine our future.“
• Maria, a musician in New York: “As a single mother of two, I am so grateful that losing my job as a result of COVID-19 has not jeopardized my children’s stable home or dinner table. Without the PUA I would not be able to pay my rent. I would be forced to choose between buying food and paying the electricity.”
• Laureen, a musician in Illinois: “My husband is in the severe stage of early-onset dementia at the young age of 58. I am paying $210 a day for 24/7 live-in care for my husband. It is alarming and stressful to have a lifetime of savings get spent so quickly. I truly need the help of the $600 PUA to continue.”
• Melanie, a musician in Massachusetts: “My immune system is compromised, so I am unable to easily find work. Receiving unemployment insurance has literally saved my life. If I no longer received that amount, I would no longer be able to afford rent, let alone groceries, or pay my bills.”
• Anne, a musician in New York: “As the mother of a prematurely-born baby girl, I have had tremendous hurdles in providing for her. The CARES Act has made it possible for me to continue to pay bills…healthcare and medicine, food, diapers, infant supplemental formula, and a slew of other non-negotiable necessities. It is the only thing keeping me afloat.”
• Jennifer, a musician from California: “If not for PUA and PUC, I would have become homeless in April and I would have had to file for bankruptcy.

How Do We Move Forward?

This crisis has laid bare the shortcomings and opportunities for action to improve our nation’s unemployment insurance system in so many ways.

Workers who have very little waited in line for weeks for needed benefits. The inequality of access and benefit levels is obvious. That is why we must act now to change the system—we will never have a more important moment to get lasting and long-needed change. Crises expose our greatest weaknesses; if we ignore the moments when systemic flaws are laid bare, that is nothing short of political and policy failure. We must take advantage of the clear lessons we have learned about our UI system to establish a meaningful federal floor, including adequate funding for states to upgrade their IT systems and handle the current flow of applications for unemployment benefits. If we fail to do so, states will face real pressure from employers to cut benefits when state trust funds run out, and our UI system will only be further decimated before the next crisis hits.

First, in the short term, we need to establish a way to scale up and scale down benefits automatically as the economy calls for it, rather than rely on ad-hoc extensions that could come erratically, force states to continually reprogram their systems, and end too soon and too abruptly, thereby stranding families without necessary income support and damaging our country’s economic recovery. Representative Beyer has proposed a thoughtful approach to increase duration as economic conditions call for it, as well as to scale back the $600 bonus as the unemployment rate declines and workers have jobs to return to.  At a minimum, we must reauthorize the full PUC, PUA, and Pandemic Emergency Unemployment Compensation (PEUC) until the public health crisis ends and unemployment is back into the single digits, and authorize additional weeks of PUA and PEUC sufficient to meet the needs of unemployed workers and their families during what will likely be a drawn-out recovery from this pandemic and recession.

As we look beyond just the temporary benefits we need, it is important to consider where the program does not provide equal and fair access to benefits. The Urban Institute found that during the last Great Recession, Black workers were on average 13 percent less likely than white workers to receive benefits, and Latinx workers were 4 percent less likely.[xxiii]  Obviously, structural racism inherent in the occupational segregation in the U.S. plays a role in access to those benefits, but it is also clear that there were hurdles to benefit access disproportionately affecting workers of color back then that persist to this day.

The most obvious hurdle was the move by many states to reduce the maximum duration of benefits below 26 weeks in the aftermath of the Great Recession. Ten states cut duration of benefits. The most recent is Alabama—last June, it cut maximum duration to just 14 weeks. Three states cut maximums from 26 to 20 weeks—Michigan, Missouri, and South Carolina. Arkansas cut maximum benefit duration to 16 weeks. Florida, Georgia, North Carolina, Kansas, and Idaho have adopted sliding scales tied to state unemployment rates. Fortunately, four states—Idaho, Kansas, Georgia, and Michigan—have reversed course and restored benefits to 26 weeks of recipiency. Reducing duration is necessarily going to have a disparate impact on communities of color until other structural reforms are implemented to get people in affected communities back to work faster. As of the third quarter of 2019, during a period of record low unemployment, the average duration of an unemployment spell was 21 weeks. For white workers, a 20-week cutoff would not affect the average worker who remained unemployed for 19 weeks. However, Black workers averaged 25.9 weeks in their unemployment period.^[xxiv] A 26-week benefit period would completely cover average duration for Black workers; any duration reduction therefore statistically harms Black workers more.

We also need to enact an important reform to the UI/PUA method of delivering benefits to unemployed workers. PUA is available only to workers who are not eligible for UI, whether by virtue of not earning enough income to qualify, being self-employed, or facing some other exclusion. Many workers, however, have sources of income both as an employee and as a self-employed worker. Far too many workers, including some featured above, earn most of their income through self-employment but earn just enough income as an employee that they receive a minimum or near-minimum state UI benefit. As a result, they are ineligible for PUA, and over the course of the 39 weeks of authorized benefits, they may stand to lose literally tens of thousands of dollars in benefits they desperately need, not just for their own financial support, but perhaps for the financial support of their businesses as well. This clearly unintended consequence is having a devastating effect on workers throughout the country. We are ready to work with Congress to enact a solution that provides workers with the relief to which they should be entitled, but also gives state UI agencies adequate time and resources to reprogram their IT systems to implement this fix.

Because there is so much disparity across states and populations within those states, we are at a point where Congress should consider federalizing UI to operate similarly to Social Security. Short of that, NELP endorses Senator Bennet’s plan for long-term reform.

As we saw in the aftermath of the Great Recession, if states emerge from this recession with empty trust funds and having had to borrow money to pay benefits, there will likely be widespread efforts to cut benefit access and amounts going forward. Key components of effective long-term reform include the following:

• Minimum of 26 weeks of benefits.
• Benefits replace 60 percent of income for workers below the earnings limit.
• More workers should be eligible. Employers in the gig economy and low-paid educational contract employees like adjuncts and paraeducators should be able to access UI in every state.
• Permanent reform of Extended Benefits. During a recession, benefit weeks should automatically be extended as the unemployment rate increases.
• Every state should provide a dependent allowance for people who have children to care for.
• UI should be available to part-time workers in every state.
• Good cause to quit should be uniform across states, so workers fleeing domestic violence, following a spouse whose job has moved, or whose work jeopardizes their health and safety should be able to resign and receive UI.
• Work-sharing should be universal and available in every state. Employers should have the option to spread layoffs across the workforce and allow workers to receive UI to cover their lost hours rather than completely laying off part of the workforce.
• Make the optional Alternate Base Period mandatory so workers with erratic schedules can maximize their benefits.

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