Unemployment insurance intended as a bridge between jobs | Brunell

It shouldn’t be an incentive to stay jobless.

Don Brunell

Don Brunell

When Congress established the Federal Unemployment Tax Act (FUTA) in 1935, it was intended to provide temporary and partial income replacement for workers who lost their jobs through no fault of their own. It was supposed to be a “bridge” to a new job and not “in lieu of compensation” to remain jobless.

The coronavirus pandemic produced massive layoffs. The resulting economic downturn swelled the ranks of unemployed Americans by more than 14 million — from 6.2 million in February to 20.5 million in May 2020, Pew Research reported. The unemployment rate jumped from 3.8 to 13 percent.

However, in the last few months with more Americans being vaccinated, our economy is catching fire only to find employers in frantic searches for people to fill job vacancies.

Now, the emphasis is shifting to safely reopening schools, restaurants, factories and shops by stepping up “shots in the arms” vaccination programs.

The number of unfilled jobs soared to nearly 15 million by mid-March (2021), according to ZipRecruiter. The online job site reported “discouraged, hesitant and fearful job seekers” accounted for many positions remaining vacant.

Recently, the Labor Department jobs numbers were disappointing. The total non-farm payroll employment rose by 266,000 in April (2021), far below the 1 million expected by Dow Jones economists.

When the pandemic struck a year ago, our economy tanked. President Trump and Congress needed to act swiftly and did.

In March 2020, Congress passed a $2 trillion stimulus bill called the CARES (Coronavirus Aid, Relief, and Economic Security) Act to blunt the impact of the COVID pandemic economic downturn.

CARES extended regular unemployment benefits from 26 weeks, to as long as 39 weeks and temporally suspended work search requirements. In addition, it funded a new Federal Pandemic Unemployment Compensation (FPUC) benefit of $600 per week on top of the regular unemployment benefits.

That continued through the end of July 2020; however, the FPUC was modified and extended to provide an additional $300 per week in benefits until March 31, 2021.

President Biden’s $1.9 trillion COVID-19 relief package extends enhanced unemployment benefits until Labor Day, Sept. 6, with a $300 federal bonus on top of what states pay.

The U.S. Chamber of Commerce believes the additional $300-per-week is enticing Americans to stay at home. “The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market,” the Chamber added.

With millions of employer looking for workers, Republicans say emphasis needs to shift to encourage people to seek work. Employers nationwide say the enhanced federal unemployment benefits will only add to workers’ reticence to fill the millions of open positions—-a conclusion President Biden denies.

However, some states, such as Montana, are rejecting the added $300 payment. Gov. Greg Gianforte (R) told the Associated Press that extra federal unemployment benefits are doing more harm than good echoing the Chamber’s comments — “extra payments have served as an incentive for people to stay home, collect the money and not seek work.”

Instead, Montana instituted an incentive program where workers currently receiving unemployment payments can qualify for a one-time $1,200 bonus after they have completed four weeks in their new jobs.

Montana is among several states announcing it will reinstate the work-search requirement. Others include Vermont, New Hampshire and Arizona.

Finally, lawmakers must find ways to generate tax revenue without further damaging our economy. In 2020, the federal government took in $3.42 trillion, but spent $6.5 trillion. Our national debt has soared to $28 trillion, according to the Peter G. Peterson Foundation.

Putting people safely back to work and paying taxes on what they earn is a necessary step forward.

Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.


Talk to us

Please share your story tips by emailing editor@courierherald.com.

To share your opinion for publication, submit a letter through our website https://www.courierherald.com/submit-letter/. Include your name, address and daytime phone number. (We’ll only publish your name and hometown.) Please keep letters to 500 words or less.

More in Business

Don Brunell
Land is the wild card in Biden’s green gamble |Brunell

It will take a lot of land to covert the U.S. to 100 percent renewable energy.

Don Brunell
Ignoring China’s grip on critical metals production is not an option | Brunell

China processes more than 90 percent of the world’s manganese, while the U.S. has none.

Ian McLeod speaks with customers behind the desk at Rock Paper Games on Main Street in Buckley on the afternoon of May 11. Photo by Alex Bruell
Buckley game shop is a critical hit

‘Rock Paper Games’ has weathered COVID-19 with the help of the Plateau gaming community

Don Brunell
Building our future electricity supply around hydropower | Brunell

Instead of eliminating fossil-fuel power plants, Washington and New Zealand should work on making those plants fore energy efficient.

The Moe Vegan food truck serves meals at the city of Kent’s annual Community Thanksgiving Dinner on Nov. 21, 2020. Sound Publishing file photo
King County fire marshals offer regulatory relief to food trucks

39 fire authorities have reportedly agreed to standardize fire codes and inspections.

Don Brunell
Unemployment insurance intended as a bridge between jobs | Brunell

It shouldn’t be an incentive to stay jobless.

From left to right: Peggy Wenham, Toby Wenham and Sheree Schmidt stand for a picture outside Sweet Necessities on Griffin Avenue. Photo by Alex Bruell
For sale: Enumclaw candy shop Sweet Necessities looks for a new owner

Co-owner Toby Wenham is joining his wife Peggy in retirement from their twin Enumclaw businesses

Don Brunell
Rethinking natural gas bans | Brunell

Washington shouldn’t ban natural gas in new homes. Thankfully, Olympia left the bad legislation on the table this session.

Nickie Lynn's 22x22-foot labyrinth takes up nearly the entire floor space in her Myrtle Avenue location. Photo by Ray Miller-Still
A new ‘place for healing’ opens in heart of Enumclaw

Nickie Lynn has earned a Masters in pastoral studies and has been certified in pastoral ministry, spiritual direction, and labyrinth facilitation — all to help you on your spiritual journey.

Don Brunell
North American ports remain closed to large cruise ships | Brunell

Losing out on cruise ship season last year cost Alaska $3 billion.

Don Brunell
Good news from Hanford | Brunell

If Washington is going to reduce CO2 emissions, then it has to go nuclear.

A street sign along Bay Street in Toronto's financial district is shown on Tuesday, January 12, 2021. THE CANADIAN PRESS/Nathan Denette
Energy and base metals help lift TSX in early trading, U.S. markets down

TORONTO — The energy and base metal sectors helped lift Canada’s main… Continue reading