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A proposal from Senate Republicans to reduce $600 in weekly federal unemployment benefits in favor of a sliding-scale system could take months for Maine to implement as more than 80,000 workers here face steep income drops next week.
The additional federal unemployment benefits, which passed as part of a $2.2 trillion March stimulus bill, have been a lifeline for unemployed workers. Republicans and some Democrats side with businesses that argue the program made it difficult to rehire workers, although individuals receiving unemployment can lose benefits if they refuse a job offer outright.
For Maine workers, the benefits effectively expired July 25. Unless Congress reaches an agreement this week, workers still receiving unemployment will see benefits revert to the state level. State benefits are capped at $445 weekly, with the average sitting at $327 as of May.
More than 84,000 Mainers filed continued claims for the week ending July 18, the most recent week for which data are available, marking a downward trend. But the expiration of the extra $600 is coming as some are still waiting to receive their first benefits, as issues with the state’s online interface and difficulties reaching state workers by phone have led to significant delays.
A proposal floated by Senate Majority Leader Mitch McConnell, R-Kentucky, on Monday would replace the $600 with $200 per week while giving states two months to match 70 percent of workers’ previous wages, The Washington Post reported. In Maine, the change would amount to a 43 percent drop in income for individuals receiving the average benefit.
Significant changes to the program, including switching to sliding benefits correlated with previous wages, would likely pose an administrative problem for states including Maine that have struggled to keep up with increased demand throughout the coronavirus pandemic.
Continuing to administer federal benefits at a flat level other than $600 would be simple, said Maine Department of Labor spokesperson Jessica Picard. Determining benefits based on previous wages would be “very complex” and take months to program because the department only has access to quarterly wage data, not workers’ previous weekly wages, she said.
Additionally, for self-employed individuals receiving Pandemic Unemployment Assistance — who made up about 30 percent of claims in the most recent state data — the state does not collect any wage information unless the worker registers as an incorporated business, Picard said.
When Maine rolled out the Pandemic Unemployment Assistance program in early May, it began by paying all workers on the program the minimum payment of $172 with the plan of adjusting benefit amounts in the future. The state announced on July 23 — nearly three months later — that it was ready to begin the process of matching tax information in order to update the payments for these workers.
For Suzanne Young, a self-employed fiber artist in Winterport, the formula is unforgiving. Young, who usually sells her work at shows and farmers’ markets, re-invested in her business last year, so her tax returns show a loss, making her eligible for only the minimum of $172 per week.
She operates a sheep farm and cares for her husband, who suffers from memory loss, so getting a job with regular hours would be difficult.
“With the $600, I’m making ends meet,” Young said. “Barely making ends meet with nothing extra, but it’s doable and I don’t know what I’m going to do when the $600 goes away.”
Any extension of the additional $600 in benefits will likely require an agreement between the Democratic-led House and the Republican-controlled Senate. A bill passed by the House in May, and supported by U.S. Rep. Chellie Pingree, a Democrat from Maine’s 1st District, would have extended the full $600, but the Senate declined to take it up.
Maine’s congressional delegation has expressed a range of views on the issue, though only Pingree has explicitly endorsed a specific plan.
Sen. Susan Collins, R-Maine, said Monday that it was important to extend federal unemployment benefits “in a way that does not create a disincentive” for individuals to return to work. Collins added states should be able to provide wage replacement or something similar with federal help based on the data used to calculate regular state benefits.
Sen. Angus King, I-Maine, has declined to endorse an extension of the full $600, but said Monday that the $200 per week proposed by Republicans was “too small.” King also said he would oppose any plan that created an “impossible logistical burden” for the state.
A spokesperson for Rep. Jared Golden, a Democrat from the 2nd District, said his priority was preventing a lapse in federal benefits, which rules out a wage-matching system in the short-term, though he didn’t have a specific number in mind for what the fixed benefit should be.
Some Maine workers have still yet to receive any benefits. James Morrow, a nurse from Presque Isle, applied for unemployment insurance on May 19. He said he was let go from his job after hearing difficulties made it difficult for him to understand people who were wearing masks, leading to miscommunications. Those circumstances meant his case requires a fact-finding interview, which has been scheduled for Aug. 25.
Morrow said he and his wife managed to make things work so far thanks to a stimulus check and a tax refund. After his fact-finding interview, he should get back pay including the extra $600. In the meantime, he is looking for work but found it difficult, even as a health care worker. He worries about individuals with similarly delayed benefits who might not have savings.
“The employment situation hasn’t gotten any better,” Morrow said. “People are hurting.”