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Unemployment Numbers Rise Amid Debate Over Extending Enhanced Benefits

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3 years ago

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  • Another 2.4 million people filed for unemployment last week, bringing the total count to more than 38 million.
  • This comes as President Trump and GOP leaders said they do not want to extend federal unemployment benefits that give everyone an addition $600 a week and are set to expire in July.
  • Those Republicans say the benefits disincentivize people from going back to work because many are currently getting more money from unemployment insurance than they would at their normal jobs
  • Others argue that the enhanced benefits are an essential part of the broader economic recovery effort because it puts money in people’s pockets and acts as a stimulus.

Unemployment Continues to Rise

Another 2.4 million people filed for unemployment last week, the government reported Thursday, bringing the official total count to more than 38 million in the last nine weeks.

While the newest numbers still support the continued downward trend the U.S. has seen over the last few weeks, that is only one part of a much bigger picture.

Almost 40 million Americans have filed for unemployment since the coronavirus pandemic forced widespread shutdowns. That does not include the estimated millions more that are currently applying for benefits or waiting for their applications to be approved.

Even though more places are reopening and more people are going back to work, those numbers might not be as optimistic as many have hoped.

In fact, continuing claims— which show how many people are still collecting unemployment after their initial application— rose by 2.5 million to a record 25 million. Some believe that is a sign that unemployment is still straggling even as states being to ease restrictions.

While that figure is reported on a two-week lag and thus might not be representative of recent reopenings, it is clear that many Americans are still hurting. 

According to a recent household survey from the Census Bureau, 47% of adults said they or someone in their household have lost employment income since March 13, and nearly 40% “expected that they or someone in their household would lose employment income over the next four weeks.”

Now, more and more economists are warning that many of the job losses meant to be temporary could become permanent. One recent report published by the University of Chicago’s Becker Friedman Institute estimated that 42% of recent layoffs will result in permanent job loss.

Debate Over Extending Enhanced Benefits

Despite these growing concerns, President Donald Trump and other top Republicans have said they want to end the enhanced federal unemployment benefits that were laid out under the stimulus bill.

Normally state governments are the ones that give out unemployment, but under the CARES Act, Congress authorized an additional $600 a week on top of that for all unemployed Americans.

However, those extra benefits are set to expire in July. On Friday, the House passed a $3 trillion stimulus package that would extend those benefits until the end of the year, but Republicans have broadly rejected a number of provisions in that bill.

According to reports, Trump privately expressed his opposition to extending those benefits during a private meeting on Tuesday. 

The next day, Senator Majority Leader Mitch McConnell (R-KY) reportedly said that the enhanced unemployment benefits would not be in the next stimulus bill, and added that Republicans are “going to have to clean up the Democrats’ crazy policy that is paying people more to remain unemployed than they would earn if they went back to work.”

That pretty much sums up why Republicans want to end the benefits. They believe that if unemployed people are getting more money from unemployment than they would normally, or even if they are just able to get by existing on those benefits, then they will not go back to work.

There has been some anecdotal evidence of companies saying they are having a hard time getting workers to go back to their old jobs. Although, according to reports, some workers say this is because they are concerned about unaddressed safety issues.

But here’s the thing: legally, people who are offered reemployment and turn it down are likely to lose their unemployment benefits.

That, however, puts employers in a tough position because they have to make hard choices about keeping their business afloat and rehiring people who might be better off on unemployment.

This is true for a lot of people. While some studies estimate that about 40% of workers made less at their jobs than they would get from the expanded benefits, others say two-thirds of unemployed workers who are getting those benefits are taking home more than they would from their previous job. 

The Benefits of More Benefits

On the other side of this debate, many argue that giving people more money right now a good thing— not just for everyday people who are hurting, but for the economy as whole.

“Unemployment benefits represent a critical component of the country’s recovery effort, as the weekly payments to out-of-work Americans function as a form of stimulus in their own right,” the Washington Post explained.

Normally, joblessness benefits are supposed to provide around 45% of a person’s wages, but in order to boost the economy, the extra $600 in the CARES Act is intended to be enough to give most people 100% of their lost wages.

“Unemployment insurance in a normal recession is a great stimulus because it has high bang for your buck. People spend it,” Chad Stone, the top economist for Center on Budget and Policy Priorities told the Post. “It’s very valuable to the people receiving it, and it’s beneficial to the economy.”

With rising concerns that more and more of the job losses caused by the pandemic will become permanent, that could be incredibly important for supporting the economy in the long term.

When it comes to unemployment, planning for the distance has proven to be essential in the past.

For example, during the 2008 financial crisis, Congress extended unemployment benefit eligibility up to 99 weeks.

While it was an expensive and controversial move, some experts said the payments were essential for people who were unemployed for way longer than their states would normally give them benefits, which currently is around 26 weeks in most parts of the country.

If more job losses are permanent, some argue extending these federal benefits could be absolutely necessary.

See what others are saying: (The Washington Post) (MSNBC) (ABC News)

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Survey and Census Data Shows Record Number of Americans are Struggling Financially

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7 days ago

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May 23, 2023

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Americans are choosing not to pursue medical treatment more and more frequently as they encounter money troubles.

A recent federal survey shows that a record number of Americans were worse off financially in 2022 than a year prior.

Coupled with recent census data showing pervasive poverty across much of the country, Americans are forced to make difficult decisions, like foregoing expensive healthcare. 

According to a recent Federal Reserve Bureau survey, 35% of adults say they were worse off in 2022 than 2021, which is the highest share ever recorded since the question was raised in 2014. 

Additionally, half of adults reported their budget was majorly affected by rising prices across the country, and that number is even higher among minority communities and parents living with their children.

According to recent census data, more than 10% of the counties in the U.S. are experiencing persistent poverty, meaning the area has had a poverty rate of 20% or higher between 1989 and 2019. 

16 states report at least 10% of their population living in persistent poverty. But most of the suffering counties were found in the South — which accounts for over half the people living in persistent poverty, despite making up less than 40% of the population. 

These financial realities have placed many Americans in the unfortunate situation of choosing between medical treatment and survival. The Federal Reserve study found that the share of Americans who skipped medical treatment because of the cost has drastically increased since 2020. 

The reflection of this can be found in the overall health of households in different income brackets. 75% of households with an income of $25,000 or less report being in good health – compared to the 91% of households with $100,000 or more income. 

See what others are saying: (Axios) (The Hill) (Federal Reserve)

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Montana Governor Signs TikTok Ban

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2 weeks ago

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May 18, 2023

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The ban will likely face legal challenges before it is officially enacted next year. 

First Statewide Ban of TikTok

Montana became the first state to ban TikTok on Wednesday after Gov. Greg Gianforte (R) signed legislation aimed at protecting “Montanans’ personal and private data from the Chinese Communist Party.”

The ban will go into effect on Jan. 1, 2024, though the law will likely face a handful of legal challenges before that date. 

Under the law, citizens of the state will not be held liable for using the app, but companies that offer the app on their platforms, like Apple and Google, will face a $10,000 fine per day of violations. TikTok would also be subject to the hefty daily fine. 

Questions remain about how tech companies will practically enforce this law. During a hearing earlier this year, a representative from TechNet said that these platforms don’t have the ability to “geofence” apps by state.

Roger Entner, an analyst at Recon Analytics, told the Associated Press that app stores could have the capability to enforce the restriction, but it would be difficult to carry out and there would be a variety of loopholes by tools like VPNs.

Montana’s law comes as U.S. politicians have taken aim at TikTok over its alleged ties to the CCP. Earlier this year, the White House directed federal agencies to remove TikTok from government devices. Conservatives, in particular, have been increasingly working to restrict the app.

“The Chinese Communist Party using TikTok to spy on Americans, violate their privacy, and collect their personal, private, and sensitive information is well-documented,” Gov. Gianforte said in a Wednesday statement. 

Criticism of Montana Law

TikTok, however, has repeatedly denied that it gives user data to the government. The company released a statement claiming Montana’s law “infringes on the First Amendment rights of the people” in the state. 

“We want to reassure Montanans that they can continue using TikTok to express themselves, earn a living, and find community as we continue working to defend the rights of our users inside and outside of Montana,” the company said. 

The American Civil Liberties Union condemned Montana’s law for similar reasons. 

“This law tramples on our free speech rights under the guise of national security and lays the groundwork for excessive government control over the internet,” the ACLU tweeted. “Elected officials do not have the right to selectively censor entire social media apps based on their country of origin.”

Per the AP, there are 200,000 TikTok users in Montana, and another 6,000 businesses use the platform as well. Lawsuits are expected to be filed against the law in the near future.

See what others are saying: (Associated Press) (Fast Company) (CBS News)

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How a Disney-Loving Former Youth Pastor Landed on The FBI’s “Most Wanted” List

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1 month ago

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April 24, 2023

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 “Do what is best, not for yourself, for once. Think about everyone else,” Chris Burns’ 19-year-old son pleaded to his father via The Daily Beast. 

Multi-Million Dollar Scheme 

Former youth pastor turned financial advisor Chris Burns remains at large since going on the run in September of 2020 to avoid a Securities Exchange Commission investigation into his businesses.

Despite his fugitive status, the Justice Department recently indicted Burns with several more charges on top of the $12 million default judgment he received from the SEC. 

Burns allegedly sold false promissory notes to investors across Georgia, North Carolina, and Florida. The SEC claims he told the investors they were participating in a “peer to peer” lending program where businesses that needed capital would borrow money and then repay it with interest as high as 20%. Burns allegedly also reassured investors that the businesses had collateral so the investment was low-risk. 

The SEC says that Burns instead took that money for personal use. 

Burns’ History 

Burns began his adult life as a youth pastor back in 2007 before transitioning into financial planning a few years later.  By 2017, he launched his own radio show, The Chris Burns Show, which was funded by one of his companies, Dynamic Money – where every week Burns would “unpack how this week’s headlines practically impact your life, wallet, and future,” according to the description. He also frequently appeared on television and online, talking about finances and politics. 

The SEC alleges that he used his public appearances to elevate his status as a financial advisor and maximize his reach to investors.

His family told The Daily Beast that he became obsessed with success and he reportedly bought hand-made clothes, a million-dollar lakehouse, a boat, several cars, and took his family on several trips to Disney World. His eldest son and wife said that Burns was paying thousands of dollars a day for VIP tours and once paid for the neighbors to come along. 

Then in September 2020, he reportedly told his wife that he was being investigated by the Securities Exchange Commission but he told her not to worry. 

The day that he was supposed to turn over his business documents to the SEC, he disappeared, telling his wife he was just going to take a trip to North Carolina to tell his parents about the investigation. Then, the car was found abandoned in a parking lot with several cashier’s checks totaling $78,000

FBI’s Most Wanted

The default judgment in the SEC complaint orders Burns, if he’s ever found, to pay $12 million to his victims, as well as over $650,000 in a civil penalty. Additionally, a federal criminal complaint charged him with mail fraud. Burns is currently on the FBI’s Most Wanted list. 

Last week, the Justice Department indicted him on several other charges including 10 counts of wire fraud and two counts of mail fraud. 

“Burns is charged for allegedly stealing millions of dollars from clients in an illegal investment fraud scheme,” Keri Farley, Special Agent in Charge of FBI Atlanta, said in a statement to The Daily Beast. “Financial crimes of this nature can cause significant disruptions to the lives of those who are victimized, and the FBI is dedicated to holding these criminals accountable.”

His family maintains that they knew nothing of Burns’ schemes. His wife reportedly returned over $300,000 that he had given to her. 

She and their eldest son, who is now 19, told The Daily Beast they just want Burns to turn himself in, take responsibility for his actions, and try to help the people he hurt. 

“Do what is best, not for yourself, for once. Think about everyone else,” Burns’ son said in a message to his father via The Daily Beast. 

See what others are saying: (The Daily Beast) (Fox 5) (Wealth Management)

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