As the extra $600 in federal unemployment benefits from the CARES Act is set to expire on July 31, Iowa lawmakers on Capitol Hill are divided on its future.
U.S. Sen. Chuck Grassley, Republican and chairman of the Senate Finance Committee, expressed concern about residents being motivated to go back to work if the $600 a week continues past July 31.
“I’m against extending it just the way it is because we have found that it’s very hard to get people go back to work if the government’s paying you for not working,” Grassley said in a call with media Wednesday.
The House of Representatives passed a bill to extend the $600 weekly benefits through Jan. 31. Rep. David Loebsack, 2nd District, voted for the measure, but Rep. Abby Finkenauer, 1st District — both Democrats — voted against party lines.
“It is vitally important that we extend the additional unemployment insurance to folks who are out of a job through no fault of their own,” Loebsack said in a statement. “By extending this safety net for the record number of unemployed Iowans, it helps them be able to continue paying their bills, putting food on the table and providing for their families.”
A spokesperson from Finkenauer’s office referred The Gazette to Finkenauer’s statement from May 15. Finkenauer wants a bill with temporary federal unemployment benefits beyond July 2020, but she was not satisfied with the details of the HEROES Act.
“The next federal COVID-19 relief package must be focused on helping families, workers, small businesses and local governments. It needs bipartisan buy-in, and should not be tied up with unrelated provisions,” Finkenauer said in the statement. “I came to Washington to get things done, and this legislation only serves to push real relief further down the road.”
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Iowa Workforce Development Director Beth Townsend also voiced reservations about the amount of federal benefits at a Senate Finance Committee hearing Tuesday.
She said 79 percent of Iowans who have received unemployment benefits since March 15 earned more on state and federal unemployment than the state’s average weekly wage.
“This is not an issue of low wages in Iowa,” Townsend told the committee. “It is the impact of the additional money.”
The average claim amount — when combining state and federal benefits — is equal to $22.50 per hour, she said.
“This has resulted in very awkward conversations between employers and employees,” Townsend said. “Employees are asking to be laid off.”
If the bill gets extended, Townsend said lawmakers should put together legislation “that is not one size fits all.”
“Six hundred dollars a week in benefits in Iowa goes much further than in states where the cost of living is significantly higher,” Townsend said.
Grassley said he supports fellow Republican Sen. Rob Portman’s efforts of coming up with a less costly alternative for when the CARES Act unemployment benefits expire.
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“If it’s possible to administer it, I think we need to give people encouragement to go back to work, and give them some help from the federal treasury that would supplement their income,” Grassley said. “Not necessarily to the tune of the $600.”
According to Bureau of Labor Statistics data, the national average weekly wage was $1,095 ($27.38/hour) in the second quarter of 2019. Iowa’s counties are all below that average. Thirty-six of Iowa’s 99 counties reported average weekly wages of $749 or lower (roughly $18.75/hour or less), 28 reported wages from $750 to $799 ($18.75/hour to $19.95/hour), 18 had wages from $800 to $849 ($19.95/hour to $21.22/hour), and 17 had wages of $850 or higher ($21.22/hour or more).
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