COVID-19 Benefits Aid Nontraditional Workers

The COVID-19 economic crisis seems to be exposing gaping holes in the U.S safety net. A case in point: some 12.9 million Americans are collecting unemployment benefits through a special program under the federal Coronavirus Aid, Relief, and Economic Security Act, better known as the CARES Act.

That number is up from about 11 million the week before, or 1.8 million more people collecting, according to June 13 data from the U.S. Department of Labor.

The Pandemic Unemployment Assistance (PUA) program provides jobless benefits to some workers who, before the CARES Act became law in March, were not even eligible for the jobless benefits traditionally offered by states.

The PUA program targets people who are self-employed, independent contractors, gig economy workers, those with limited recent work history and those seeking part-time work.

Some experts say the fact that so many Americans are receiving aid via this new federal program is a sign that the unemployment system should be altered to provide benefits to these people during more typical times.

Erica Groshen, senior labor economics advisor at Cornell University, asked in a CNBC report, “If we think unemployment insurance is a good idea, why would you be excluding work that’s now characteristic of so many jobs?”

In fact, PUA workers made up about 41 percent of the 31.5 million total unemployment benefit recipients nationwide as of June 13, according to most recent Labor Department data.

These workers can generally get benefits for up to 39 weeks, through the end of the year. Like traditional workers collecting unemployment benefits, they get an extra supplement of $600 a week through the end of this month.

Overall, the U.S. economy added a record 4.8 million nonfarm jobs in June and the unemployment rate fell to a lower-than-expected 11.1 percent, the U.S. Labor Department reported last Thursday (July 2). Meanwhile, the number of Americans who filed jobless claims dropped in the latest week, but still topped 1.4 million.

“These improvements in the labor market reflected the continued resumption of economic activity that had been curtailed in March and April due to the coronavirus pandemic and efforts to contain it,” the Bureau of Labor Statistics said.

The Labor Department found big June job gains in the leisure and hospitality sector, which COVID-19 shutdowns had previously hit hard. The sector saw jobs rise in June by 2.1 million, or two-fifths of the total nonfarm employment gains.