America has 'two completely different systems' when supporting unemployed workers
Half of states' move to end pandemic unemployment programs prematurely reflects a broader, enduring truism of the US unemployment system: How much aid unemployed Americans get depends largely on where they live.
Twenty-five Republican-run states plan to opt out of certain unemployment programs - including the additional $ 300 in weekly benefits - this month, though the federal expiry doesn't end until September. Around 4.5 million workers in these states will have their benefits cut by at least $ 1,200 a month, while many may no longer be eligible for benefits at all.
"This has created two completely different systems and benefits in the United States, but unfortunately it was also a real pre-pandemic," Jenna Gerry, senior lawyer for the National Employment Project, told Yahoo Money. "They saw huge differences between states and levels of benefits, length [and] eligibility requirements before this pandemic even started."
"Everything in his power has been done to limit the benefits"
The US does not have a federal unemployment system. Rather, each state has its own system with a specific duration of benefits, eligibility requirements and level of benefits. The majority of states that are de-registering from federal programs have attempted to tighten eligibility requirements or either reduce the length or amount of unemployment benefit per week - in some cases well before the pandemic began.
For example, Alabama, Arkansas, Florida, Georgia, Missouri, and South Carolina lowered the maximum length of unemployment benefits to less than 26 weeks - the national standard - between 2011 and 2013. Alabama's regular unemployment benefits are only 14 weeks and Florida unemployment benefits could only run for 12 weeks, depending on the unemployment rate.
In addition, since the pandemic began, Arizona, Ohio, Missouri, Tennessee, and West Virginia have introduced bills to reduce unemployment insurance periods. Tennessee could potentially become the lowest benefit state in the country at 12 weeks if recently passed laws are signed by its governor.
"Unnecessary [government] aid hurts small businesses," tweeted Rep. Kevin Vaughan, a Republican from Tennessee who took the bill. "Prosperity = lower unemployment benefits ... stagnation = higher unemployment benefits."
People walk through a Manhattan neighborhood in New York City on February 05, 2021. (Photo by Spencer Platt / Getty Images)
Tennessee is trying to tie the duration of benefits to the unemployment rate, a move Florida has taken. However, according to Gerry, reducing the duration of benefits based on the state unemployment rate can hurt particularly colored workers, as their unemployment rate is often higher than the overall rate. For example, in the fourth quarter of 2020 - the most recent data available - black workers in 12 of the 21 states that provide such breakdowns had an unemployment rate of over 10%, according to the NELP.
States have also tried to tighten eligibility. For example, after Florida introduced an automated filing system called CONNECT in 2013, the number of disqualified workers more than doubled in the next year, according to the NELP.
"Florida is a great example of a state that has done everything in its power to limit benefits," said Gerry. "They basically created a new online system with the intention of keeping people out."
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