“Congress Must Cover Paychecks of Every US Worker,” Says Sanders as Laid-Off Americans Struggle to Obtain Benefits
April 21st 2020
Bernie Sanders (Gage Skidmore)
By Jake Johnson
Sen. Bernie Sanders on Monday said Congress should pass legislation to "cover the paychecks of every U.S. worker" as many small businesses struggle to apply for taxpayer-backed loans to keep their employees on payroll and laid-off workers grapple with outdated and punitively complex unemployment systems.
"A furloughed German worker retains 90-100% of his salary, while his American counterpart is struggling to obtain unemployment benefits. Unacceptable," Sanders tweeted, linking to a VICE article by journalist Clio Chang contrasting how the U.S. and German governments are responding to the economic downturn caused by the global Covid-19 pandemic.
"Depending on how their country is handling the situation," Chang noted, "the first month of this historic recession has gone drastically different for different workers."
Chang compared the experiences of a U.S. worker and a German worker, both of whom were laid off in recent weeks.
Jonathan Bowen calls the Oregon unemployment office hundreds of times a day. Or at least he has since March 21, when he first applied online after losing his job as a cook at a small taqueria. Bowen was told then that his claim wasn't valid and that he had to call the office, so he did. Every week, he still puts in his claims, in order to create a record of how long he's been unemployed. One day, the 38-year-old estimated that he called the office over 1,000 times.
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A few weeks before Bowen lost his job, Daniel Flohr, a 33-year-old part-time flight attendant, was sent home from work. Flohr lives more than 5,000 miles away from Portland, in an apartment an hour outside of Frankfurt, Germany, and has been working as a flight attendant for more than ten years. Because of the existing contract that was negotiated between his company and his works council, Flohr's basic salary is still being paid in full. At the end of April, he expects for his pay to go down to 90 percent of his salary, with most of that coming through Kurzarbeit, Germany's short-term work scheme.
On Saturday, Sanders and three other senators introduced a bill to bring the U.S. closer to the German approach by guaranteeing wages and benefits for employees of businesses harmed by the ongoing economic downturn.
The Paycheck Security Act, according to a detailed summary (pdf) released by Sanders' office, would for at least the next six months "cover salaries and wages up to $90,000 for each furloughed or laid-off employee, plus benefits, as well as up to an additional 20 percent of revenues to cover fixed operating costs such as rent, utilities, insurance policies, and maintenance."
Companies would have to meet a number of requirements to qualify for federal grants under the bill, including offering all workers laid off since Feb. 1, 2020 their jobs back and not cutting pay or benefits.
Sens. Mark Warner (D-Va.), Doug Jones (D-Ala.), and Richard Blumenthal (D-Conn.) joined Sanders in unveiling the legislation, which is similar to a proposal released earlier this month by Rep. Pramila Jayapal (D-Wash.).
"With 22 million Americans filing for unemployment and up to 35 million expected to become uninsured, we are the only wealthy nation on Earth where our people are losing jobs and healthcare at precisely the moment that they need them the most," Sanders said in a statement. "This is a man-made crisis. Our job now is to join the rest of the industrialized world and pass the Paycheck Security Act."
The massive stimulus package President Donald Trump signed into law last month, titled the CARES Act, authorized a $600-per-week increase in unemployment benefits on top of what states normally provide.
But many laid-off workers have struggled to obtain their benefits due to antiquated federal and state systems that have been overwhelmed with claims in recent weeks as the coronavirus crisis keeps large swaths of the U.S. economy completely shuttered.
"Many states have such outdated technology—which also rely on decades-old software—that their systems have struggled to make unemployment aid available for gig workers and self-employed workers who don't normally qualify for money but were made eligible by the new law," the Washington Post reported last week. "Florida has resorted to handing out paper applications and said this week it has a backlog of 850,000 applications. So far, the state has sent money to only 34,000 people."
Additionally, a CARES Act loan program designed to help small businesses cover payroll costs has already run out of money as many companies on the verge of collapse await their loans.
Josh Bivens, director of research at the Economic Policy Institute, said in a statement endorsing the Paycheck Security Act that "workers and their families are paying the price for going into the current crisis with a weak social insurance system and public safety net."
"Given this pre-existing weakness, transformative responses to this economic crisis have to be put together on the fly," Bivens said, "and the Paycheck Security Act is a bold solution to provide needed relief during the lockdown period of the crisis and would put us in much better position to mount a rapid recovery once the public health all-clear was sounded."
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