Total unemployment payout 33% more than lost wages in NH
By Michael Cousineau
August 10, 2020
New Hampshire paid out 33% more in total unemployment benefits to people during the coronavirus pandemic than they would have earned had they worked, according to the state.
“Now, certainly that does not mean that everyone filing for unemployment has received more while collecting than while working,” Deputy Employment Security Commissioner Rich Lavers said in an email Monday. “The department felt it was important to show the amount of income replacement provided by the unemployment system to help better understand the impact the pandemic has had on the workforce and economy.”
The news comes during a fierce debate over how much in enhanced federal benefits unemployment recipients should receive. Critics argue that people shouldn’t make the same or more money than they did working because it discourages people from re-entering the workforce.
The $600 supplemental federal payments ran out last month because of a stalemate in talks in Washington, leaving Granite State recipients to receive a maximum $427 a week in state benefits rather than up to $1,027.
Sen. Jeanne Shaheen, D-N.H., warned Monday that following through with President Trump’s executive order Saturday providing for an additional $400 a week in enhanced benefits would lead to delays and more frustration.
“One of the challenges with changing the current unemployment program at this point is that we will then go through another whole delay in getting any new changes up and running and also making those available to people, so that’s one of the incentives to try and continue the current program because we know it’s helping people,” Shaheen said during a virtual meeting with unemployment recipients and attorneys.
“We know that there were bugs in the program that are still being worked at,” Shaheen said. “Many of them have been worked out, but any changes at this point will put us back into that cycle where people are going to have trouble again with the system.”
New Hampshire reported 60,470 continued unemployment claims for the week ending July 25.
Lavers said it was too early to say how Trump’s order would work.
“We are waiting for critical federal guidance that will tell us who, in fact, would be eligible and the options for how states are allowed to pay the state share,” Lavers said. “We recognize the opportunities presented by the proposal but really need to know more details in order to responsibly evaluate the options for New Hampshire.”
In its weekly update, Employment Security said it calculated more than $890.8 million in lost earnings by workers since the pandemic. The department also paid out nearly $1.19 billion in unemployment payments.
“Comparing the amount of lost income to the amount of unemployment benefits paid implies that about 133% of the income lost during the pandemic has been replaced by state and federal unemployment benefits,” read the latest weekly update.
It noted research by the National Bureau of Economic Research estimated New Hampshire’s income replacement rates were between 132% and 141% of lost income.
Under Trump’s enhanced benefits plan, states would be required to kick in $100 toward those $400 enhanced weekly payments.
Treasury Secretary Steven Mnuchin said Monday that the administration was willing to meet again with Democrats to try to reach an agreement on relief aid on a number of issues.
“We’re prepared to put more money on the table,” he told CNBC.
Stephen Tower, a staff attorney at New Hampshire Legal Assistance, said the $600 payments have helped keep people in their homes.
“We believe that that $600 a week has helped avoid the avalanche up until this point even though the eviction moratorium ended” more than a month ago for some renters, Tower said.
He said shifting to a new payment amount could cause problems.
“New Hampshire Employment Security — although it was a lot of headaches and frustration for a lot of applicants — I think given the level of new applicants they were dealing with, did a great job and as (Shaheen) said, if we have to redesign the program and redevelop software and plans for implementing a new program, it’s going to cause more delays,” Tower said. “That’s not something anyone can afford right now.”
Susan Sorensen, a self-employed aesthetician, closed AboutFace Skin Therapy in Lebanon on March 20 and couldn’t reopen until June. She struggled to get unemployment benefits.
“It was an extremely stressful five weeks trying to juggle money for groceries for myself and my (college-age) son,” Sorensen said. “When was my business going to be allowed to reopen? There were so many unknowns — and I think that is one of the core issues, is that there are so many unknowns — and I would like for Congress to know that benefits for people must, must continue.”
Shaheen said the unemployment checks stimulate the state’s economy.
“One of the things we’ve heard from a number of economists over the last month or so is that the unemployment benefits have really helped bolster the economy as a whole because what people have done with those dollars is pay their rent, bought groceries, basically spent them, which has helped to keep the economy afloat, so this is very important,” said Shaheen, who praised Employment Security for its efforts.