With the expiration of federal pandemic unemployment benefits last Labor Day, it’s easy to forget proposals that would have continued those record payments even longer. One of the most noteworthy was a December 2020 bill dubbed the American Worker Holiday Relief Act, which was introduced by senior Senate Democrats including Majority Leader Chuck Schumer (D-NY) and Finance Committee Chairman Ron Wyden (D-OR). Had it been enacted, federal pandemic unemployment benefits would have continued well past their actual Labor Day shutoff—in practice generally in blue states, since most red states opted to end those benefits last summer. In fact, under this legislation these benefits would continue to be payable today in multiple states, even as the nation experiences a record worker shortage.

The bill proposed reviving unprecedented $600-per-week federal unemployment bonuses, formally called Pandemic Unemployment Compensation (PUC). Created in March 2020, those bonuses were last paid in July 2020, yet the legislation would have revived them throughout 2021. It also would have paid them retroactive to September 2020, offering millions of Americans (including some who had already returned to work) lump sums sometimes exceeding $10,000. Instead, Congress in late December 2020 approved bipartisan legislation providing—but not paying retroactively—$300-per-week supplements, which the partisan March 2021 American Rescue Plan extended through last Labor Day.

The American Worker Holiday Relief Act also proposed extending all other federal pandemic unemployment benefits—with an important twist. Those benefits included: Pandemic Unemployment Assistance (PUA), which aided the self-employed and gig workers and was beset by historic fraud; Pandemic Emergency Unemployment Compensation (PEUC), which provided almost a year of extended benefits for those who exhausted six months of state unemployment checks; and full federal funding for the first week of state benefits, short-time compensation programs, and the Extended Benefits program.

The twist involved how long the legislation proposed those pandemic programs would continue to operate. Normally, when Congress expands federal unemployment benefits in a recession, it does so through a date certain. For example, the American Rescue Plan established Labor Day as its “hard cutoff,” which even President Biden said “makes sense.” Instead, the American Worker Holiday Relief Act proposed extending pandemic benefits as long as state unemployment rates remained high—that is, indefinitely. 

The bill’s definition of “high unemployment” is complicated: Pandemic programs would operate until a state’s three-month average total unemployment rate fell below 5.5 percent, after which benefits for current recipients would phase out over as many as 13 additional weeks. That’s a mouthful, but it simply means that if this legislation had been adopted, pandemic unemployment benefits would have continued to be paid well past Labor Day in many states. In October 2021, counting the phaseout benefits would have continued in 23 states (there are 53 “states” that operate unemployment programs, including the District of Columbia, Puerto Rico, and the US Virgin Islands). Benefits would have continued in 20 states in January 2022. Even in March 2022, benefits would have continued in 15 states, including large blue states like California, Illinois, Michigan, New Jersey, New York, and Pennsylvania. Those 15 states collectively contain over one-third of the nation’s workforce.

This week we learned that in March 2022 job openings nationwide hit a record high of 11.5 million. Even “high unemployment” states by the standards of the American Worker Holiday Relief Act are experiencing labor shortages. For example, California saw the biggest monthly increase in job openings in the country in February (the most recent state data). And a workforce survey from 2021 indicated that 46 percent of contractors in California experienced project delays due to labor shortages. But if the December 2020 bill had become law, even as inflation was already hitting 40-year highs, billions of dollars in additional unemployment benefits would have been paid since last Labor Day in California alone, where the last pandemic benefits would currently be scheduled to finally phase out this coming July.

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