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Senate bill would expand unemployment benefits and pay $250 a week to gig workers

Senate Finance Committee Chairman Ron Wyden, D-Ore., speaks at a Senate Finance Committee hearing at the U.S. Capitol on Feb. 25, 2021.

Tasos Katopodis | Getty Images News | Getty Images

A Senate bill introduced Wednesday would broadly reform the U.S. unemployment system, seeking to plug gaps in the safety net for jobless Americans in response to the Covid pandemic and put states on a more equal footing.

The legislation would raise the amount and duration of unemployment benefits, and expand the pool of workers who qualify for aid.

It’s sponsored by Sens. Ron Wyden, D-Ore., chair of the Finance Committee, and Michael Bennet, D-Colo.

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The bill, the Unemployment Insurance Modernization Act, would also make the self-employed, gig workers, new graduates and others a permanent fixture of the unemployment safety net.

Such workers, who are typically ineligible for state aid, would qualify for a $250 weekly Jobseeker Allowance benefit, paid by the federal government for up to six months and indexed annually for inflation.

The amount and length may increase during times of high unemployment. Similarly, state benefits would also be more responsive to economic downturns and rising joblessness.

It makes other tweaks, too. For example, states wouldn’t be able to deny jobless aid to workers who quit their job for “compelling” reasons, like the loss of childcare or unusual risks to health or safety, and irregular work schedules — all of which have come into play during the pandemic.

‘Broken’ system

State differences

Differences among states aren’t necessarily guided by cost of living, experts said. Many states, especially in the South, cut taxes that fund unemployment benefits after the Great Recession and cut aid as a result.

“There’s a huge difference,” Andrew Stettner, a senior fellow at the Century Foundation, said. “This [legislation] would narrow the differences between states and create a more stable floor for this benefit.”

The bill would require states to offer at least 26 weeks of benefits. Benefits would also replace 75% of a worker’s average pre-layoff wages (up from roughly half right now), up to a state’s maximum weekly benefit.

The federal government would pay another $25 a week per dependent.

A state’s maximum weekly benefit would also increase, to at least two-thirds of its average weekly wage.

Louisiana, for example, currently caps benefits at about $250 a week. The legislation would cause that to more than double, to about $541, according to an analysis of Labor Department data on the state’s average wages in Q4 2020.

The federal government would also fully replace lost wages for workers during public health emergencies or other major disasters.

Extended benefits

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