A job creation organization has sent a letter asking Senate Majority Leader Mitch McConnell of Kentucky, Sen. Marco Rubio, R-Fla., and Sen. Susan Collins, R-Maine, to reject the extension of the current unemployment benefits and instead create a new program that offers employers a tax credit for every new employee they bring on board.
The Job Creators Network (JCN) is proposing a program that would include a $300 tax credit to employers for every worker they hire and would take place over the next few months. A $300 "back to work" bonus would be paid directly to every new employee. The credit would go to businesses with 100 employees or less.
"Federal unemployment benefits of $600 a week have helped millions of Americans. But the payments have been so large that they have dissuaded people from going back to work. Many could make more money by being unemployed than employed. That is untenable for an economy with as much promise as ours," said Alfredo Ortiz, JCN President and CEO.
In March, Congress passed a $2 trillion relief coronavirus stimulus bill that included an additional $600 in weekly unemployment benefits. Congress enacted the bill assuming the pandemic would eventually dissipate and workers would be able to return to work as normal.
"We recommend that the Senate let extended unemployment benefits lapse and start a new program called Employment Assurance. We envision it as a $300 employer tax credit for each new employee hired over the next few months plus a $300-back-to-work bonus paid directly to each new employee," Ortiz said. "Businesses with 100 employees or fewer would be eligible for the credits. New employees at businesses of any size should be eligible for this bonus. Everyone wins with such a program."
But ever since states have begun to reopen their economies, the coronavirus cases have continued to climb in 40 states. And 22 states have paused or reversed their reopenings, which could hamper rehiring efforts.
Meanwhile, the additional federal unemployment payments that millions of Americans have used to pay rent and stay afloat after the coronavirus pandemic forced employers to shut down their businesses are expected to end on July 25.
Senate Minority Leader Chuck Schumer of New York and Sen. Ron Wyden, D-Ore., have floated an alternative bill that gives weekly payments to states based on their unemployment rates. People in states with rates between 6% and 7% would receive $100 in weekly payments. If a state hit 11%, those payments would be capped at $600.
"What I am worried about is that Congress doesn't act by the 25th," Michele Evermore, an analyst at the National Employment Law Project in Washington, D.C, told the South Florida Sun-Sentinel. "Most people don't know they're not going to get that enhanced benefit. People are going to be very surprised when they don't get a benefit in the last week of July."
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