Tag: unemployment insurance

States Are Seeing Steep Income Tax Revenue Growth. Will It Last?

Mary Pat Campbell

Link:https://www.forbes.com/sites/lizfarmer/2021/12/01/states-are-seeing-steep-income-tax-revenue-growth-will-it-last/

Excerpt:

States collected nearly $455 billion in total income tax revenue in fiscal 2021—an astounding 14.7% increase over the prior year. That’s according to the latest report from the National Association of State Budget Officers (NASBO), which covers spending through June 2021. Over two years, income tax revenue is up 15%.

However, these numbers are highly influenced by unusual economic times. For starters, states delayed their tax filing deadline by several months when the pandemic began. For most, this pushed their 2020 income tax revenue into the next fiscal year. This artificially deflated 2020’s numbers while inflating 2021 collections.

The federal stimulus has also played a role. Since March 2020, the feds have doled out $867 billion in cash to households via three Economic Impact Payments. While those payments weren’t taxable, they could indirectly increase state tax liability for some. (The New York Times NYT +1% has a good explainer on that.) Plus, unemployment insurance — which most states do tax — received a massive boost for about 15 months.

Author(s): Liz Farmer

Publication Date: 1 Dec 2021

Publication Site: Forbes

States Have $95 Billion to Restore their Unemployment Trust Funds—Why Aren’t They Using It?

Mary Pat Campbell

Link:https://taxfoundation.org/state-unemployment-trust-funds-2021/

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Excerpt:

States are permitted to replenish their unemployment compensation (UC) trust funds using the $195.3 billion they received in Fiscal Recovery Funds under the American Rescue Plan Act (ARPA)—and they need the help, having paid out $175 billion in state-funded benefits since the start of the pandemic, in addition to the $661 billion shelled out by the federal government in extended and expanded benefits, for a total of about $836 billion between January 27, 2020 and September 11, 2021.[1]

…..

Pre-pandemic trust fund balances stood at $72.5 billion. Today, aggregate trust fund balances are negative, at -$11.1 billion, reflecting $44.8 billion in indebtedness currently incurred by 10 states and the U.S. Virgin Islands. By federal standards, 34 state accounts are currently insolvent, with $114.6 billion needed to bring them all up to what the federal government regards as minimum adequate levels.

Author(s): Savanna Funkhouser, Jared Walczak

Publication Date: 22 Sept 2021

Publication Site: Tax Foundation

ILLINOIS MISSES DEADLINE TO REPAY $4.2 BILLION FEDERAL UNEMPLOYMENT INSURANCE LOAN

Mary Pat Campbell

Link: https://www.illinoispolicy.org/illinois-misses-deadline-to-repay-4-2-billion-federal-unemployment-insurance-loan/

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Excerpt:

Illinois missed the September deadline to repay a $4.2 billion federal unemployment loan. Employers warn inaction by state lawmakers could ‘cripple’ businesses and the COVID-19 economic recovery.

Illinois state leaders missed the Sept. 6 deadline to repay a $4.2 billion federal loan to the state’s unemployment insurance fund, which leaves Illinois taxpayers on the hook to pay $60 million in annual interest on that loan.

The unemployment fund has been depleted during the COVID-19 economic downturn. Between the loan and failure of state leaders to replenish the fund, potentially by using federal COVID-19 bailout funds, the deficit stands at $5.8 billion.

Business leaders warn a failure to repay the debt would result in automatic tax hikes on Illinois’ employers starting at $500 million, further waylaying the state’s stagnant job recovery. There would also be automatic benefit cuts of the same amount. Employers could be subjected to further, discretionary tax hikes by the state legislature if those automatic solvency measures fail to fill the hole.

Author(s): Adam Schuster, Patrick Andriesen, Perry Zhao

Publication Date: 17 Sept 2021

Publication Site: Illinois Policy Institute

10 States Didn’t Pay Off Unemployment Loans Ahead of Interest Deadline

Mary Pat Campbell

Link: https://www.route-fifty.com/finance/2021/09/10-states-didnt-pay-unemployment-loans-ahead-interest-deadline/185172/

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Excerpt:

At least four states paid back money in the last week they borrowed from the federal government to cover unemployment benefits—narrowly avoiding additional interest on the loans.

Hawaii, Nevada, Ohio and West Virginia announced the loan repayments within the last week. A remaining 10 states have a combined outstanding balance of more than $45 billion that they will now begin to accrue interest on, according to the Treasury Department.

When states exhaust their unemployment trust funds, they are allowed to borrow money from the federal government to ensure benefits continue to be paid. Twenty-two states took out what are referred to as Title XII advances during 2020. The loans were initially interest free, but starting Monday, states with outstanding loans began to accrue 2.3% interest on the borrowed sums.

Author(s): Andrea Noble

Publication Date: 7 September 2021

Publication Site: Route Fifty

Gig Workers In This State – Not California – Benefited Most From Federal Unemployment Benefit Expansion

Mary Pat Campbell

Link: https://www.forbes.com/sites/lizfarmer/2021/09/09/gig-workers-in-this-statenot-californiabenefited-most-from-federal-unemployment-benefits/

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Excerpt:

Federal unemployment benefits ended this month for millions of Americans and data show that workers in Virginia might feel it the most.

The federal government’s enhanced unemployment benefit added $300 to weekly unemployment checks issued by states and also expanded coverage to the self-employed and freelancers, such as rideshare drivers and musicians. That expansion, called pandemic unemployment assistance (PUA) was a lifeline for these gig workers who previously weren’t eligible for any unemployment help.

An analysis I did for the Rockefeller Institute of Government on unemployment benefits given to non-traditional workers shows that the PUA program had the biggest financial impact in Virginia, where those payments accounted for nearly 26% of all unemployment benefits paid in 2020.

Author(s): Liz Farmer

Publication Date: 9 September 2021

Publication Site: Forbes

How Many People Are Now Covered by Unemployment Insurance?

Mary Pat Campbell

Link: https://mishtalk.com/economics/how-many-people-are-now-covered-by-unemployment-insurance

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Excerpt:

In April of 2020, there were 145.67 million people covered by unemployment insurance but only 133.33 million people working. 

This unusual inversion had never happened before. It lasted 4 months, April through June of 2020.

Covered Employment data is weekly, ending Saturday and lags by a week. I use a “monthly average” which run through July vs the employment level series which runs through August.

Author(s): Mike Shedlock

Publication Date: 6 September 2021

Publication Site: Mish Talk

What’s Keeping Women Out of the Workforce?

Mary Pat Campbell

Link: https://www.city-journal.org/government-policies-keeping-women-out-of-workforce

Excerpt:

Since last winter, 1.8 million women have left the labor force entirely—neither working nor looking for work. At first, closed schools and the high cost of child-care options seemed responsible. But economists who have crunched the numbers argue that closed schools can’t explain higher female unemployment. Women with young children make up only 12 percent of the labor force and were only slightly more likely to leave the labor force than were women without young children. The exception? Women with young children who don’t hold college degrees—they constitute only 6 percent of the labor force but saw the biggest drop in employment. Their employment rate has fallen by almost eight percentage points since the pandemic started.

This suggests that women aren’t working for various reasons. For most families, several factors—child-care options, how much a given job will pay, and their partner’s employment prospects—determine whether they will decide to return to work. Rarely in economics does a single cause explain a phenomenon; policies often affect behavior on the margins. If you’re struggling to find good, affordable child care and you are being paid more to stay at home, that extra factor can tip the scales.

Indeed, several current policies seem to be discouraging women from returning to work.

Author(s): Allison Schrager

Publication Date: 15 June 2021

Publication Site: City Journal

Unprecedented federal borrowing floods state budgets

Mary Pat Campbell

Link: https://thehill.com/opinion/finance/556660-unprecedented-federal-borrowing-floods-state-budgets

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Excerpt:

Once per calendar quarter, the state of Michigan conducts a Consensus Revenue Estimating Conference that provides updates on both the national and state economies and the state’s fiscal outlook. The May conference each year is especially significant because it sets the official revenue targets for the next fiscal year’s state budget. 

The May meeting packet contained a broad range of data points, but a few jumped out.

….

Another chart broke down the components of personal income. Over the previous four quarters, personal income was nearly $3,000 higher than pre-pandemic forecasts had expected. However, employee compensation actually declined by about half that amount. The entire increase is the result of the 53 percent increase in federal transfer payments that have floated U.S. households over the past year.

Author(s): DAVID GUENTHNER

Publication Date: 5 June 2021

Publication Site: The Hill

Labor Shortage Draws Attention of U.S. Lawmakers

Mary Pat Campbell

Link: https://www.wsj.com/articles/labor-shortage-draws-attention-of-u-s-lawmakers-11622712602

Excerpt:

Congressional lawmakers from both parties are considering incentives such as providing federal funding to pay for hiring bonuses for workers and expanded tax credits for employers. A handful of states are moving to implement such programs on their own, without waiting for Washington.

Some economists, Republican lawmakers and business owners say enhanced federal unemployment benefits are contributing to the labor shortage, because many workers receive more in government aid than they would get on the job. Those benefits — $300 a week on top of regular state payments — are due to expire after Labor Day.

Other economists say the payments have provided a boost to many lower-income families, who have disproportionately lost jobs in the coronavirus pandemic, while in turn pushing money back into the broader economy.

Author(s): Kate Davidson

Publication Date: 3 June 2021

Publication Site: Wall Street Journal

Deaths of despair and the incidence of excess mortality in 2020

Mary Pat Campbell

Link: https://voxeu.org/article/deaths-despair-and-incidence-excess-mortality-2020

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Excerpt:

Mortality in 2020 significantly exceeds what would have occurred if official COVID-19 deaths were combined with a normal number of deaths from other causes. The demographic and time patterns of the non-COVID-19 excess deaths (NCEDs) point to deaths of despair rather than an undercount of COVID-19 deaths. The flow of NCEDs increased steadily from March to June and then plateaued. They were disproportionately experienced by working-age men, including men as young as 15 to 24. The chart below, reproduced from Mulligan (2020b), shows these results for men aged 15–54. To compare the weekly timing of their excess deaths to a weekly measure of economic conditions, Figure 1 also includes continued state unemployment claims scaled by a factor of 25,000, shown together with deaths.

Author(s): Casey Mulligan

Publication Date: 28 January 2021

Publication Site: Vox EU

Kansas May End Federal Jobless Aid to Encourage Workers

Mary Pat Campbell

Link: https://www.governing.com/work/kansas-may-end-federal-jobless-aid-to-encourage-workers

Excerpt:

Gov. Laura Kelly said Thursday she was weighing whether to end Kansas’ participation in federal unemployment programs started during the COVID-19 pandemic, as many Republican states say they will pull out of the initiatives.

Businesses have complained of difficulties in hiring workers, something many Republicans have chalked up to a slate of programs aimed at cushioning the blow for residents laid off due to the economic turmoil of the past year.

Kelly’s office confirmed in a statement Wednesday that Kansas wasn’t following in the footsteps of Missouri, Iowa and about a dozen other state in ending their participation in the programs.

Author(s): Andrew Bahl, The Topeka Captial-Journal

Publication Date: 14 May 2021

Publication Site: Governing

Pay a Living Wage or ‘Flip Your Own Damn Burgers’: Progressives Blast Right-Wing Narrative on Jobs

Mary Pat Campbell

Link: https://www.commondreams.org/news/2021/05/07/pay-living-wage-or-flip-your-own-damn-burgers-progressives-blast-right-wing

Excerpt:

Soon after the Labor Department released its April jobs report, the U.S. Chamber of Commerce blamed last month’s weak employment growth on the existence of a $300 weekly supplemental jobless benefit and began urging lawmakers to eliminate the federally enhanced unemployment payments that were extended through early September when congressional Democrats passed President Joe Biden’s American Rescue Plan. 

“No. We don’t need to end [the additional] $300 a week in emergency unemployment benefits that workers desperately need,” Sen. Bernie Sanders (I-Vt.) said in response to the grumbles of the nation’s largest business lobbying group. “We need to end starvation wages in America.”

“If $300 a week is preventing employers from hiring low-wage workers there’s a simple solution,” Sanders added. “Raise your wages. Pay decent benefits.”

Author(s): Kenny Stancil

Publication Date: 7 May 2021

Publication Site: Common Dreams