As unemployment benefits end for about 80,000 Oregonians, U.S. Sen. Ron Wyden has vowed to fix the flaws that have persisted since the system was created during the Great Depression more than 80 years ago.
The Oregon Democrat is in a position to do so as chairman of the Senate Finance Committee, which writes tax legislation. He says he will push for changes — which range from upgraded computers for states processing claims to automatic triggers for benefits when the economy turns down — in the next Democratic-sponsored jobs legislation in the fall.
Congress approved special federal benefits in March 2020, and extended them twice more, to supplement state unemployment trust funds that employers pay into through a payroll tax. States run the programs subject to oversight by the U.S. Department of Labor.
Wyden said in a statement on Friday, Sept. 3, a day before the end of federal benefits:
"When it comes to long-term reform, our unemployment insurance system is broken. It's been broken for decades. Not only did we fail to fix it after the Great Recession, state after state sabotaged their unemployment insurance systems by making benefits as hard as possible to access. As we've seen over the last 18 months, it's much harder for the unemployment system to work in a crisis when it's been neglected and sabotaged when the economy is doing well.
"While the weekly boost and coverage for self-employed workers helped keep the economy afloat and millions out of poverty, millions of jobless workers struggled to access benefits and millions more have been completely unable to access benefits. We can't fail again to fix it in the wake of the second major economic crisis in 10 years, and this will be a major priority in Democrats' upcoming jobs package."
Wyden was instrumental in securing congressional approval of expanded federal benefits in the CARES Act last year and their continuation in other legislation in December and March, when Congress approved President Joe Biden's pandemic recovery plan, known as the American Rescue Plan Act.
Though the actual cutoff date for federal benefits is Labor Day, Sept. 6, Oregon and most states end their claims weeks on Saturdays.
Federal benefits end
According to the Oregon Employment Department, the benefits cutoff will affect 36,000 self-employed and gig workers who received federal benefits for the first time under Pandemic Unemployment Assistance, and 56,000 other workers who received federal benefits once their regular 26 weeks of state benefits from the unemployment trust fund expired. The agency estimates that 11,000 in the second category may qualify for state benefits, given that they had to file new unemployment claims earlier this year after their initial one-year claims expired.
All Oregon workers who received an extra $300 per week in federal aid, regardless of the source of their benefits, also will lose the supplemental payments.
Wyden said he would have liked to have continued payments to gig workers and additional federal aid, but there was no legislation in the works that would have enabled him to attach those provisions.
About half the states — Oregon not among them — discontinued the special federal unemployment benefits before the Sept. 4 deadline. But Oregon Employment Department economists say that studies do not indicate the cutoffs have spurred job growth in those states, all but one led by Republican governors.
"It's unfortunate the business lobby's false narrative that workers were refusing to go back to work was endlessly repeated and allowed to take hold," Wyden said. "All evidence has subsequently shown that jobless benefits were not a real factor. This false narrative gave Republican governors cover to cause workers needless financial pain to score political points."
State economists have said it is too early to tell whether the surge in coronavirus infections and hospitalizations from the delta variant will result in job losses from the return of business curtailments and shutdowns and a lack of consumer confidence. They say if there are such trends, they should show up in August reports that will become public later this month.
Among the sectors hit hardest are leisure and hospitality — restaurants, bars and taverns and hotels — and retail stores.
"It's clear from the economic and health conditions on the ground that we shouldn't be cutting off benefits now," Wyden said. "There was no way to predict back in March the explosion of cases we've seen with the delta variant, and how it's held job growth back, particularly in the service sectors."
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