Federal $600 unemployment benefit, extend to pay, or not to pay

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COLUMBUS (WCMH)–More than 30,000 workers were unemployed from the hotel industry during the height of the coronavirys pandemic in Ohio. Most of those employees were laid off according to Joe Savarise, executive director of the Ohio Hotel and Lodging Association. He explained that fewer than 10 percent of those workers are back on the job.

“The impact on travel, the fact that we still have events that we are not allowed to hold in hotels because they don’t fit the parameters of what the state guidelines are on large meetings,” Savarise said. “All of that is having an impact.”

Savarise described the extra $600 a week in federal unemployment benefits as a great thing for hotel workers. What was supposed to help workers while they could not work now has these employees declining to come back to work.

“We’re running into situations where people might make a decision to not come back to work because of that additional benefit and how much they’re making temporarily while that’s in place,” Savarise said.

The extra federal pandemic unemployment benefit of $600 is set to expire next month. The money, which is officially named the Federal Pandemic Unemployment Compensation and was approved as part of the government relief package passed earlier this year, is set to officially expire July 31.

More than 20 million workers remain unemployed across the country. An additional 1.5 million people applied for state unemployment benefits last week, including 760,000 new claims for Pandemic Unemployment Assistance.

According to USA Today, a research note from Goldman Sachs said the company expects the program to be extended in some form, but it will likely be reduced.

Democrats have proposed keeping the $600-a-week payments through January in a $3 trillion relief package that the House approved in May. Republicans oppose the measure and the bill is not expected to pass the Senate.

So far, there are no formal negotiations on another relief package. Analysts say the need to address the fate of the $600 weekly benefit could force a resolution of the issue this summer.

Kim Hall, Director of the Ohio Department of Job and Family Services, said the state will not allow people to continue to collect unemployment benefits if they have a bonafide offer to return to work.

“It’s a balancing act between wanting to keep individuals stabilized during this challenging time, but then also needing to ensure that employers have the workers that they need to keep delivering and injecting energy into the economy,” Hall said.

In an interview with television station WCAU, Treasury Secretary Steve Mnuchin said his department is looking to “fix” the program.

“We are going to make sure that people don’t get more money to stay home than they would to work,” Mnuchin told WCAU. “That’s obviously a bad disincentive for the economy and not fair.”

Sen. Rob Portman, R-Ohio, and Rep. Kevin Brady, R-Texas, are promoting a plan that would provide $450 weekly benefits for laid-off workers who return to their jobs, as a “back-to-work” bonus. This payment would also expire by July 31.

Larry Kudlow, the top White House economic adviser, said last month that the proposal is “something we’re looking at very carefully.”

Employers added jobs in 46 states last month. Unemployment rates fell in 38 states, rose in three and were largely unchanged in nine, according to the Labor Department.

If the $600 unemployment payment ends in July, those who qualify will continue to receive state unemployment benefits.

The Associated Press contributed to this report.

Coronavirus in Ohio resources:

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