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Most unemployed Americans have been waiting for federal relief since extra weekly pandemic benefits began expiring this summer and fall. President-elect Biden has plans to restore this aid and implement other proposals to help the jobless, but for some of them he’ll need Congress’ help.
That’s the view shared by several non-partisan economic researchers who have analyzed the promises of the Biden campaign on employment issues. The president-elect’s platform included pledges to restore pandemic-driven federal unemployment supplements and, in the longer term, expand one type of jobless program. The economic analyses also predict his administration’s policies will increase both the number of jobs and overall earnings available to American workers, even if Republicans retain control of the Senate.
Here are details on the ways in which the 46th president might improve employment and unemployment benefits after he takes office on Jan. 20.
Renewing emergency unemployment payments
The CARES Act in March included limited-time provisions to help the millions of Americans losing their job in the coronavirus pandemic: it authorized an additional $600 a week in unemployment benefits for all recipients, and it extended benefits to gig and self-employed workers through the Pandemic Unemployment Assistance (PUA) program. President Trump also issued an executive order creating the Lost Wages Assistance program after the CARES Act expired, but funds for the LWA’s $300 weekly payments have now been entirely spent in most states, or will be soon.
Some Democratic activists have complained that Biden did not, during the election campaign, emphasize enough the need to extend the unemployment benefits that were part of the CARES Act. Yet the Biden campaign platform says the president-elect will “work with Congress to extend the boosted unemployment benefits (the extra $600) for however long this crisis lasts.”
Andrew Stettner, Senior Fellow with the Century Institute, says he is “excited” that the Biden administration also supports continuing PUA unemployment benefits to the self-employed during the pandemic. He notes, however, that “the next step is to adopt a permanent plan to cover this growing part of the economy.” The PUA program is set to expire Dec. 31, 2020.
The fate and timing of these initiatives will depend on Congress passing another coronavirus-driven stimulus bill. Negotiations between Republicans and Democrats on that bill are ongoing. Stettner says he expects negotiations between the major parties to be “challenging” in order “to do everything needed to be done on unemployment insurance.”
Adding to the uncertainty of the president-elect’s success in achieving his goals is whether or not Democrats will gain control of the Senate after the special elections in January for two Georgia Senate seats.
Increasing opportunities for job sharing
A key proposal of the Biden administration to address unemployment benefits in an ongoing way is a commitment to expand and fully fund job sharing, or what’s formerly known as short-time compensation programs.
These plans allow employers to reduce work obligations (and wages) to employees, rather than outright laying them off, with the affected workers receiving government payments to make up some or all of their lost earnings. To Stettner of the Century Institute, “job sharing is better than regular [unemployment insurance], because employers are able to keep their talent attached to them, making it easier to endure and emerge from hard times. Workers keep their skills sharp by working part time, and maintain benefits and seniority.”
However, here, too, Biden’s proposals will require passage through what could continue to be a Republican-controlled Senate. But Stettner says he is more optimistic about the chance of that support, since short-time compensation programs have already been introduced by both red and blue state administrations.
Biden aims to expand the number of states with job-sharing programs from the current 27 to a full complement of 50 states, plus the District of Columbia, Puerto Rico, and the Virgin Islands. As incentives to those jurisdictions, and to further encourage existing programs, Biden pledges “100% federal financing” for short-time compensation programs. The CARES Act included short-term funding for existing state job-sharing programs, but Biden wants to make that financial support permanent, for both existing and new programs.
That pledge should certainly help to expand and stabilize these programs, according to Stettner. “One reason employers do not participate is that they have to pay back benefits through higher taxes. Full federal funding would take away that disincentive to participate.”
Making more new jobs available
The economic plans of the incoming Biden administration also promise to increase the number of jobs available to the unemployed, according to two independent economic analyses.
Moody’s Analytics, an economic-research firm, has published an economic forecast that concludes Biden’s proposals would lead to 13.6 million new jobs during his first term, even with a Senate that remains controlled by the GOP. Moody predicted that, by contrast, a Trump win, under continuing Democratic control of the House and Republican control of the Senate, would result in 1.8 million fewer jobs in a first term than a Biden win under the same divided Congress. The greater gains under Biden, Moody says, will result mostly from higher spending to stimulate job creation.
The other report, from Oxford Economics, predicts an addition of jobs, at 2 million, by the end of a Biden term under divided government. Oxford predicts a Biden win with divided government would cause unemployment to drop from the current 6.9% to 3% over his first term. Moody’s is less bullish on unemployment under Biden, forecasting a drop to 4.5% by the end of a first term with a divided government.