There’s been rampant speculation on the likelihood of an extension of federal unemployment benefits, especially in light of the pending expiration on July 31. But an important domino fell in the direction of a benefit extension with the July 16 release of initial unemployment claims.
The most recent figures confirm the unemployment situation remains dire. That being the case, arguing against an extension of federal unemployment benefits is quickly turning into a political non-starter.
The Latest Employment Numbers from the U.S. Department of Labor
The latest report from the DOL, released on July 16, shows initial claims for unemployment at 1.3 million. That’s down just 10,000 claims from 1.31 million the previous week. More than anything else, the hairline decline in initial claims is confirming a status quo on the employment front. It’s even possible that revisions – which are common with employment figures – will tell an even less optimistic story.
Either way, the most that can be extracted from the recent employment numbers is a stagnated job market. That doesn’t leave politicians with much breathing room as the July 31 expiration date on federal unemployment benefits looms.
One bright spot in the most recent jobs report is that continuing claims for unemployment dropped to 17.34 million from 17.76 million the previous week. That resulted in a decline in the overall unemployment rate, from 12.2% to 11.9%.
Still, both the unemployment rate and the number of continuing unemployment claims confirm the clear recessionary status of the economy and the job market. Even at “only” 1.3 million initial unemployment claims, the number is still twice as high as the peak of claims during the Great Recession, and more than six times the average of 200,000 per week prior to the coronavirus.
Republicans have argued that a $600 benefit is too generous and disincentivizes working class Americans, some of whom are making more on unemployment than they did while working, from returning to their place of work — a position with which President Donald Trump agrees.
Asked about the amount of enhanced unemployment benefits, he said he would be OK with it the next round of coronavirus relief legislation from Congress.
“They’re thinking about doing 70% of the amount,” Trump said. “The amount would be the same but doing it in a little bit smaller initial amounts so that people are going to want to go back to work. As opposed to making so much money that they really don’t have to.”
Sen. Chuck Grassley, an Iowa Republican who chairs the Senate Finance Committee, has for weeks argued that while the unemployment benefit cannot simply drop off, it should also not serve as an unfair competitor to business owners who are looking to hire back employees.
“I think we’re going to have to find the compromise between those who want to cut it off completely, but we can’t go to $600 for another six months,” Grassley told ABC News Monday.
Sen. Mitt Romney, R-Utah, said Tuesday that he supports an expansion of the program, but argued a scale-back is going to be necessary.
“We certainly need to continue to help people with unemployment provisions,” Romney told reporters, but he said the number would be “far lower” than $600.
Two Republican aides involved in the talks have said negotiators have discussed a reduction to $400 per week, but the details of any final product remain unclear.
Some members of the Republican conference have suggested tying the unemployment benefit to each individual’s income. But that is a proposal that states have said would be logistically complicated to execute given the outdated unemployment systems many are using.
Romney said Tuesday he believes that there will have to be some sort of flat rate agreed to due to these technical challenges.