Tag Archives: Unemployment

Risk coronavirus or default: ride-hail drivers face tough choices as U.S. aid expires

By Tina Bellon

NEW YORK (Reuters) – Uber driver Johan Nijman faces a difficult decision as federal unemployment aid expires: risk failing to pay for groceries and even lose his home, or resume driving and potentially catch COVID-19.

Nijman is among thousands of Uber Technologies Inc and Lyft Inc drivers across the United States choosing between physical and financial health risks as $600 in additional weekly unemployment assistance expire.

While drivers are not the only workers struggling, they are particularly vulnerable as their work puts them close to many strangers. Also, as independent contractors, they have none of the formal protection or benefits that employees enjoy.

“I never thought that after working so hard for so long that I would ever find myself in a situation where I had to ask for food one day,” Nijman said.

With type 2 diabetes putting him at higher risk for severe COVID-19, Nijman stopped driving in mid-March when the virus was raging through New York City. Before the pandemic, he earned some $1,500 a week driving for Uber’s high-end black car service in an SUV he bought when he signed up in 2017.

He applied for unemployment and received around $900 in weekly benefits – some $300 from the state and $600 from the federal government. That barely covered his expenses, including city-mandated liability insurance drivers must keep paying.

Without the additional $600, Nijman said he faces financial ruin, putting his car and house on the line.

Other drivers, like Sacramento-based Melinda Pualani, are still waiting for their unemployment claims to process, with agencies overwhelmed by the slew of applications.

“Driving again was simply a necessity because I used up most of my savings and still have to keep food on the table,” Pualani said.

She resumed driving last week, rolling down windows, thoroughly disinfecting her car after every trip and asking passengers to wear masks.

Federal pandemic pay offered a lifeline to many gig workers not eligible for ordinary unemployment insurance. Uber and Lyft lobbied U.S. lawmakers to include gig workers in the taxpayer-funded March coronavirus relief bill and workers remain eligible for state-based assistance.

No data is available on the share of gig workers among the 30 million Americans currently collecting unemployment. But the enhanced $600 pay stopped last week and U.S. lawmakers are at an impasse over how to extend it.

Uber and Lyft have provided drivers with masks and disinfectants. They also pay two-week financial assistance to drivers infected by the virus or ordered to quarantine.

Trip requests dropped 80% in April and remain significantly below prior-year levels. Uber and Lyft are expected to provide updates when they report results later on Thursday and Wednesday, respectively.

For parents, the timing is particularly difficult.

Single mom Denise Rozier, a Lyft driver in Austin, Texas, burned through her savings and in April contracted the virus. Alone and struggling to breathe, she worried she might not recover.

“I have a lot of anxiety, but really need to go back (to work) with school starting and expenses piling up,” she said. “I don’t want to risk my safety, but I also don’t want to depend on my family.”

Rozier is afraid of bringing the virus to her family or even contracting it again.

But she also fears altercations with passengers refusing to wear masks. Uber and Lyft have mandated masks for drivers and passengers, but several driver dashcam videos posted online have shown heated arguments with riders refusing to wear one.

“I wished that people in power find a way to look after people that never looked for a handout,” Queens-based Nijman said.

(Reporting by Tina Bellon in New York; Editing by Ben Klayman and Peter Henderson)

U.S. Treasury to sell $112 billion next week, continue shift to longer-dated debt

By Ross Kerber

BOSTON (Reuters) – The U.S. Treasury Department said on Wednesday it will sell $112 billion next week in notes and bonds and that it plans to continue to shift more of its funding to longer-dated debt in coming quarters, as it finances measures to offset the impact of the COVID-19 epidemic.

The Treasury said it expects its debt needs to moderate but remain elevated, after borrowing a staggering $2.753 trillion in the second quarter.

“Treasury continues to face unprecedented borrowing needs as a result of the federal response to COVID-19,” Brian Smith, Treasury’s deputy assistant secretary for federal finance, said on a conference call.

The Treasury will sell $48 billion in three-year notes, $38 billion in 10-year notes and $26 billion in 30-year bonds next week as part of its quarterly refunding.

It said on Monday that it plans to borrow $947 billion in the third quarter, about $270 billion more than it previously estimated for the July-September period.

The federal agency will use “long-term issuance as a prudent means of managing its maturity profile and limiting potential future issuance volatility,” Smith said in a release.

As Treasury increases auction sizes, it will have larger increases in 7-year, 10-year, 20-year and 30-year notes and bonds, he said.

Treasury has been raising extra money to fund trillions of dollars in coronavirus-related economic aid allocated by Washington. As of Tuesday, White House negotiators were trying to reach a deal with congressional Democrats to extend relief measures including unemployment benefits, liability protections for businesses and a moratorium on evictions.

Borrowing has spiked far above the quarterly record set during the 2008 financial crisis.

A declining economic outlook has driven down U.S Treasury yields across the curve to record or near-record lows, helping raise equity prices and lower borrowing costs.

(Additional reporting by Karen Brettell in New York; Editing by Paul Simao)

Congressional Democrats, White House set new round of coronavirus aid talks

By Patricia Zengerle

WASHINGTON (Reuters) – Top White House officials and Democratic leaders in the U.S. Congress will try again on Tuesday to narrow gaping differences over a fifth major coronavirus relief bill to help stimulate the economy and possibly provide new aid to the unemployed.

The two sides have reported some progress in recent days. But they remain far apart on a range of issues including unemployment benefits for workers made jobless by the epidemic, as well as liability protections for businesses and funding for schools, state and local governments and election security.

Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows were due to meet with Senate Republicans at a midday policy lunch, before resuming negotiations with House of Representatives Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer at 3:30 p.m. EDT (1930 GMT).

Federal Reserve officials are urging Congress and the White House to help the struggling U.S. economy. Tens of millions of Americans have lost their jobs during the crisis.

Congress passed more than $3 trillion in relief legislation early in the epidemic. But lawmakers missed a deadline last week to extend the $600 per week in enhanced unemployment payments that have played a key role in propping up the U.S. economy.

Democrats are pressing for another $3 trillion that would retain the $600 benefit and add nearly $1 trillion in assistance for state and local governments.

Senate Republicans, who have not taken part in the White House talks with Democrats, have proposed a $1 trillion package that would slash the unemployment payment to $200 a week and eventually move to 70% of wages.

Republicans say the $600 benefit – which is on top of state unemployment payments – discourages people from taking lower-paying jobs. A Fed official on Monday said there was little evidence to support that view.

Differences also remain on whether to extend a moratorium on housing evictions and Democrats’ demand for around $1 trillion in aid to state and local governments suffering revenue shortfalls as a result of the epidemic.

(Reporting by Patricia Zengerle; Writing by David Morgan and Richard Cowan; Editing by Scott Malone, Sam Holmes and Paul Simao)

U.S. COVID-19 aid bill talks ongoing as jobless benefit nears end

By Susan Heavey

WASHINGTON (Reuters) – Negotiations over another coronavirus relief bill continue, the No. 2 Democrat in the U.S. House of Representatives said as a federal jobless benefit was set to expire on Friday with no sign of a deal between the White House and Democrats.

“We’re going to be negotiating every minute that is possible,” despite the Republican-led Senate’s adjournment for the weekend, House Majority Leader Steny Hoyer told MSNBC in an interview.

Lawmakers and the White House are at odds over efforts to further shore up the economy and manage the novel coronavirus pandemic that has left tens of millions of Americans out of work and killed at least 152,384 people in the United States.

In a meeting on Thursday night between top White House officials and congressional Democratic leaders, negotiations focused on an extension of the expiring unemployment benefit.

Senate Majority Leader Mitch McConnell sent senators home for the weekend without reaching a deal to extend the extra $600 per week unemployment benefits many received amid the outbreak.

According to a person familiar with the closed-door negotiations, the White House proposed reducing the $600 weekly payment to $400 for the next four months. While that was a move toward the demands of House Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer, the source said they rejected it as insufficient.

On Thursday, Senate Republicans tried, without success, to pass a bill reducing the jobless benefit to $200 per week.

For weeks, McConnell has said that any deal with Democrats would require a shield for companies and schools from liability lawsuits as they reopen during the pandemic.

The source, who asked not to be identified, said the White House hinted that it could embrace a deal without that provision.

Besides the $600 “enhanced” payment, Democrats are seeking a wide-ranging economic stimulus bill that would include about $1 trillion in aid to state and local governments experiencing plunging revenues during the economic downturn.

In mid-May, the Democratic-controlled House passed a $3 trillion bill that the Republican Senate has ignored.

“We’re here, we’re on the phone. We will be negotiating with those who want to get to a reasonable place,” Hoyer told MSNBC.

More details on the White House position may emerge when Trump’s spokeswoman Kayleigh McEnany gives a news briefing scheduled for 10:30 a.m. EDT (1430 GMT). Pelosi is also scheduled to talk to reporters at 10:45 a.m. (1445 GMT).

Republicans, Democrats face tough talks on coronavirus relief as deadline looms

By David Morgan and Patricia Zengerle

WASHINGTON (Reuters) – U.S. Republicans and Democrats faced difficult talks on Tuesday on how best to recover from the coronavirus pandemic, after Republicans unveiled a relief proposal days before millions of Americans lose federal unemployment benefits.

Senate Republicans announced on Monday a $1 trillion coronavirus aid package hammered out with the White House, which would slash the current expanded unemployment benefit from the $600 per week in addition to state unemployment, which expires on Friday, to $200.

Senate Majority Leader Mitch McConnell touted the proposal as a “tailored and targeted” plan to reopen schools and businesses, while protecting companies from lawsuits.

The plan sparked immediate opposition from both Democrats and Republicans. Democrats decried it as too limited, and too late, compared with their $3 trillion proposal that passed the House of Representatives in May.

Some Republicans called it too expensive.

The Republican proposal would give many Americans direct payments of $1,200 each, provide billions in loans to small businesses and help schools reopen.

The federal supplemental unemployment benefit has been a financial lifeline for laid-off workers and a key support for consumer spending. Democrats quickly denounced the cuts as draconian when millions of Americans cannot return to shuttered workplaces.

Many Republicans insist the high unemployment payout encourages Americans to stay home rather than go back to work. Their proposal would put the $200 weekly supplemental payment in place until states create a system to provide a 70% wage replacement for laid-off workers.

Democrats said the $200 suggestion is insufficient and would damage the economy, and scoffed at suggestions that people would rather stay home.

“People want to work, Republican friends. They just don’t have jobs to do it. We’re not going to let them starve while that happens,” Senate Democratic leader Chuck Schumer said in a Senate speech criticizing Republicans.

“Let’s get something done. America desperately needs our help,” he said.

Schumer and Democratic House Speaker Nancy Pelosi are due to meet later on Tuesday with Treasury Secretary Steven Mnuchin, after a session on Monday evening.

The partisan dispute comes as U.S. coronavirus cases have passed 4.3 million, with nearly 150,000 people killed in the country, and tens of millions out of work.

The Democratic-led House in May passed its $3 trillion coronavirus relief bill known as the “HEROES Act,” but the Republican-led Senate refused to consider it.

McConnell acknowledged that the Republican “HEALS Act” was just a starting point for negotiations that would need bipartisan support to become law.

In his remarks opening the Senate on Tuesday, McConnell accused Democrats of risking Americans’ well-being amid the health and economic crisis by playing politics.

“The HEALS Act is full of provisions that I would frankly dare my Democratic colleagues to actually say they oppose,” McConnell said.

(Reporting by David Morgan, Patricia Zengerle and Susan Cornwell in Washington; Additional reporting by Lisa Lambert in Washington; Writing by Patricia Zengerle; Editing by Bernadette Baum and Matthew Lewis)

Republicans, White House seek $400 cut to weekly unemployment aid: report

WASHINGTON (Reuters) – U.S. Senate Republicans and the White House plan to seek a reduction in emergency federal weekly unemployment benefits from $600 to $200 until states can handle a more complicated benefit formula, the Washington Post reported on Monday.

Democrats, who control the U.S. House of Representatives, have sought to keep the current federal benefit in place. Senate Republicans are expected to unveil their latest coronavirus relief plan later on Monday.

(Writing by Susan Heavey; Editing by Tim Ahmann)

U.S. Congress girds for a fight over new coronavirus aid bill

By David Morgan and Doina Chiacu

WASHINGTON (Reuters) – U.S. Senate Democrats are prepared to block Republicans from moving forward on a partisan coronavirus aid bill, the chamber’s top Democrat warned on Monday, as Republican leaders were expected to meet at the White House to discuss legislation.

The Republican-controlled Senate and Democratic-led House of Representatives have less than two weeks to hammer out a new relief package before enhanced unemployment benefits run out for tens of millions of American workers made jobless by the COVID-19 pandemic.

Senate Majority Leader Mitch McConnell and House Republican leader Kevin McCarthy were due to discuss legislation with President Donald Trump and Treasury Secretary Steven Mnuchin at the White House on Monday, a White House official said over the weekend.

But Senate Democratic leader Chuck Schumer warned Republicans not to try to move forward on their own legislation, saying Senate and House Democrats would unite to demand bipartisan action.

“We will stand together again if we must,” Schumer said in a letter to colleagues. “A bipartisan, bicameral process will result in a much better bill for the American people.”

Congress has so far passed legislation committing $3 trillion to the crisis. In the more than 12 weeks since Trump signed the last response law, the number of U.S. coronavirus cases has more than tripled to over 3.7 million.

Similar partisan standoffs preceded the last bills.

Senate Republican plans to unveil a coronavirus bill this week have been upstaged by a White House effort to eliminate billions of dollars for coronavirus testing and tracing from the legislation.

“That goes beyond ignorance. It’s just beyond the pale. Hopefully, it was a mistake and they’ll back off it, because it is so very wrong,” House Speaker Nancy Pelosi told MSNBC.

Republicans and Democrats appear to be far apart on what should be included in the next coronavirus package.

Republicans have circulated draft documents laying out liability protections for businesses, schools, government agencies and charities.

Democrats, who oppose liability protections, have pledged to fight for legislation akin to the $3 trillion bill that the House approved in mid-May. McConnell has said his bill would not cost more than $1 trillion.

(Reporting by Doina Chiacu and David Morgan; Editing by Scott Malone and Jonathan Oatis)

More grim job losses as U.S. hits record high on new COVID cases

By Lisa Shumaker

(Reuters) – As the number of new coronavirus cases in the United States rose to a single-day record, fresh government data on Thursday showed another 1.3 million Americans filed for jobless benefits, highlighting the pandemic’s devastating impact on the economy.

More than 60,000 new COVID-19 infections were reported on Wednesday and U.S. deaths rose by more than 900 for the second straight day, the highest since early June.

The grim numbers come on top of extraordinarily high jobless figures, although they came in lower than economists had forecast.

Initial unemployment claims hit a historic peak of nearly 6.9 million in late March. Although they have gradually fallen, claims remain roughly double their highest point during the 2007-09 Great Recession.

With coronavirus cases rising in 41 of the 50 U.S. states over the past two weeks, according to a Reuters analysis, many states have had to halt and roll back plans to reopen businesses and lift restrictions. From California to Florida, beaches and bars have been ordered to close. Restaurants in Texas have been told they can have fewer diners.

Earlier this week, President Donald Trump criticized his health agency’s recommendations for reopening schools in the fall as too expensive and impractical, insisting that all schools must open for classroom instruction. Vice President Mike Pence said on Wednesday the Centers for Disease Control and Prevention would issue a “new set of tools” next week.

Many Americans cannot return to work if schools do not open for in-person learning, as they are a major source of childcare in the country.

The CDC’s director, Robert Redfield, on Thursday defended the guidelines but gave no details on what the CDC was changing.

“It’s not a revision of the guidelines. It’s just to provide additional information to help the schools be able to use the guidance that we put forward,” he told ABC’s “Good Morning America” program. “Our guidelines are our guidelines.”

Officials in New Jersey and New York, the hardest-hit states at the outset of the U.S. outbreak, are trying to preserve the progress they made in curtailing the spread of the virus in the face of the resurgence elsewhere, especially the South and West.

New Jersey adopted a stringent coronavirus face-mask order on Wednesday, and New York City unveiled a plan to allow public school students back into classrooms for just two or three days a week.

(Reporting by Susan Heavey and Lucia Mutikani in Washington; Writing by Lisa Shumaker; Editing by Sonya Hepinstall)

NY Fed’s Williams says full recovery will likely take years

(Reuters) – The U.S. economy is showing signs of a turnaround as businesses reopen, but the pace of the recovery is being slowed by large-scale outbreaks in some states and it could be years before the economy is back at full strength, New York Federal Reserve Bank President John Williams said Tuesday.

Increases in consumer spending and in building permits suggest that economic activity is improving in some areas and that the “low point” of the downturn may have passed, Williams said. Manufacturing activity and small business revenues in hard-hit areas such as New York are picking up, he said.

“People have been getting back to work and the unemployment rate has started to edge down,” Williams said according to remarks prepared for a virtual event focused on central banking during the pandemic. “Although this improvement is welcome, the economy is still far from healthy and a full recovery will likely take years to achieve.”

The Fed moved aggressively in March to support the U.S. economy by cutting rates to near zero, buying up trillions of dollars in bonds and launching a slate of emergency lending tools to keep credit flowing to households and businesses.

On Monday the Fed opened a facility that it can use to purchase corporate bonds directly from companies, setting up the last of the several programs created to stabilize financial markets disrupted by the pandemic.

Williams said he believes it’s possible for the U.S. labor market to return to the levels seen before the pandemic, but cautioned that the large-scale outbreaks happening in some states could slow the pace of the economic recovery.

“This is a valuable reminder that the economy’s fate is inextricably linked to the path of the virus,” he said. “A strong economic recovery depends on effective and sustained containment of COVID-19.”

(Reporting by Jonnelle Marte; Editing by Chizu Nomiyama)

For U.S. blacks, Latinos, no sign of a broadly rising tide

By Howard Schneider

WASHINGTON (Reuters) – The protests sparked by the killing of George Floyd by Minneapolis police have opened a broader discussion about racial inequality in the United States.

The U.S. civil rights movement in the 1960s was a watershed when it came to formal de-segregation in housing, education, the workplace and public spaces. But more than a half century later, stark divisions remain in how the benefits of a $20 trillion economy are distributed among the largest racial and ethnic minorities and the country’s white majority.

An array of government programs has attempted to address the issue, including anti-poverty efforts, affirmative action to boost college enrollment, and preferences in contracting for minority-owned businesses.

But black and Latino families on average continue to earn less, have higher unemployment, and are harder hit when economic shocks like the coronavirus hit.

Graphic – Black vs white unemployment:

“The downturn has not fallen equally on all Americans, and those least able to shoulder the burden have been the most affected,” Federal Reserve chair Jerome Powell said this week.

That gap is most apparent in family net worth estimates. Black and Hispanic families accumulate proportionately less in real estate, stocks, business assets and other forms of wealth than white families.

Graphic – After decades, wealth gap remains:

Over time, that creates lower inheritances for children and more constraints when it comes to funding education or training – a dynamic that can help perpetuate the problem.

Some Fed officials have pointed to deep-seated racism as drag on the U.S. economy.

“By limiting economic and educational opportunities for a large number of Americans, institutionalized racism constrains this country’s economic potential,” Atlanta Fed President Raphael Bostic said on Friday, calling for an end to racism as both a moral and economic imperative.

“The economic contributions of these Americans, in the form of work product and innovation, will be less than they otherwise could have been. Systemic racism is a yoke that drags on the American economy.”

The lack of progress after so many decades has led some to argue that a massive generational transfer, sometimes referred to as reparations, is needed to undo a legacy that has roots in slavery, but continued to compound through the era of formal segregation and beyond.

(Reporting by Howard Schneider; Editing by Heather Timmons and Sam Holmes)