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State grapples with high cost of widespread unemployment, even with federal help

3 years 9 months 1 week ago Tuesday, August 11 2020 Aug 11, 2020 August 11, 2020 9:28 AM August 11, 2020 in News
Source: WBRZ

BATON ROUGE - Days after President Donald Trump signed an executive order to continue federal unemployment aid at $400 per week, Louisiana Gov. John Bel Edwards says the state is working through how to implement it.

"We know that we have a lot of workers who are unemployed, continued to be unemployed, through no fault of their own, and we want to make available to them all of the assistance that we can," Edwards said.

Under the president's order, Louisiana and other states will have to cover 25 percent of the federal aid, meaning $100 per week, per unemployed worker.

If a state can't afford to make that match, which is likely Louisiana's case, the match can come from the state's existing unemployment benefits. Under that option, the weekly allotment from the federal government would drop to $300.

As of Tuesday, Edwards says roughly 204,000 unemployed workers in Louisiana are receiving more than $100 in weekly state benefits. Under the state benefits match, these workers would be eligible for the $300 per week from the feds. The state's maximum weekly benefits are $247, meaning the highest total they could receive would be $547 a week.

The state believes, however, not every unemployed worker would qualify. If Louisiana chooses to use state benefits to serve as its match, the roughly 200,000 unemployed workers receiving less than $100 in state benefits a week would not be eligible for the federal aid.

"My bigger concern right now, quite frankly, isn't just over the hundred dollar difference, it's the universe of workers we're going to be able to cover," Edwards said. "Early indications are that any worker in Louisiana who isn't getting $100 a week in state benefits won't be able to get that $300.

Being able to cover every unemployed worker isn't Edwards' only concern, however. With the additional funding come from FEMA's Disaster Relief Fund, he says the money to support the federal assistance won't last long.

"If you look at the available portion of the Disaster Relief Fund, and then look back at the burn rate of unemployment benefits, that if every state participated, it wouldn't last more than about five to six weeks," Edwards said.

The Louisiana Workforce Commission is working with the Department of Labor to clarify the state's options. Edwards spoke Tuesday to Treasury Secretary Steve Mnuchin and says he expects to have more clarity later this week, but adds Congress must figure out a longer term solution.

"This underscores the need for Congress to come up with a compromise, to sit down in a room and figure this out and pass phase four," Edwards said.

The President's order would also allow states to use CARES Act funding for the financial match, but all the relief money Louisiana received earlier this year has already been appropriated.

Edwards is also hoping a stimulus package would include funding that could be used to replenish the state's Unemployment Insurance Trust Fund. The current balance of the fund is $253 million, compared to more than $1 billion at the beginning of March. Once the trust fund dips below $100 million, the state must start borrowing from the federal government. Edwards says that will likely happen next month, and when it does, the state will have to put a surcharge on employers to pay back the federal dollars.

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