Some in the Senate are resisting extending the $600-per-week unemployment benefit as part of the latest rescue bill. They want a $200 supplement until states can come up with something that reimburses unemployed workers for 70% of their lost income.
That $200 is too low. And mandating a formula is likely to complicate the ability of states to process checks, delaying delivery.
Missouri's average weekly wage before the pandemic was just was around $950, and 70% of that is $665 per week. Meanwhile, our average weekly unemployment benefit in Missouri is $246 — a difference of about $420. Split the difference between what Republicans are ultimately proposing and what Democrats want and we're at $510, which is a step in the right direction, but not a drastic one.
The national average weekly wage is around $1,100, and 70% of that is $770. The average weekly unemployment check nationwide is $320 — a difference of $450. Split that difference with $600 and you get $525. Another good compromise.
Here are a few other things to consider:
• On the plus side, we haven't seen the dire unemployment forecasts materialize — yet. We pray we don't. There had been talk of unemployment hitting 25% — toward levels not experienced in this country since the Great Depression. Nationwide, it climbed to 14.7% in April but fell back to 13.3% in May.
In Missouri, we hit 10.2% in April and fell back ever so slightly to 10.1% in May; and for the Joplin metropolitan area (Jasper and Newton counties), we went from 10.5% in April to 9.2% in May. While we are encouraged, we only have two months of data — not enough to see if there is any kind of a downward trend to justify a dramatic cut in the benefits, so we recommend a small reduction that can be adjusted in another eight to 12 weeks.
While not as bad as predicted, it is still the highest unemployment rate we have seen in our area in at least 30 years.
• We also have seen some of our larger employers — Justin Brands, for one, as well as Leggett & Platt Inc. — shift what they had originally said would be temporary furloughs to permanent layoffs, and some of those workers are finding there are no jobs to be had.
• The spring boost in unemployment compensation as well as the $1,200 stimulus checks that went to most Americans was not designed to be a social safety net so much as an adrenaline shot for the economy, putting money into the hands of people who would spend it with merchants, restaurants and many other businesses — thereby keeping people employed.
• We hear people say that the $600-per-week federal check, combined with state unemployment, was too generous and that some people made more money unemployed than they did working. Perhaps. Missouri's average unemployment is $246, and its cap is $320 — and when combined with $600, that tops out at nearly $3,700 per month. What that doesn't take into account is that fact that many people who lost their jobs also lost their health insurance and other benefits, and a good bit of that extra money will go to health care costs one way or another, either for insurance or to pay for health care bills directly.
And for every person we heard who said $600 was keeping people from going back to work, we heard from just as many who told us they would rather work, they would rather have their benefits back, they would rather have the long-term income security that comes from having a job rather than the short-term boost in unemployment money.
We are not out of the woods on this yet, and we don't see any signs of a pandemic-free economy on the horizon, which is why we advise a phased approach, with small, steady steps.
Our vote: $510-$525.