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How the pandemic could permanently change unemployment benefits

Yahoo Finance’s Myles Udland, Julie Hyman, Brian Sozzi, and Jessica Smith discuss outlook for U.S. unemployment insurance.

Video Transcript

MYLES UDLAND: Jess, I know you spoke with Senator Ron Wyden of Oregon. He has been driving the charge to update the unemployment system really since the beginning of this pandemic, and certainly that's coming even more into focus as this period drags on.

JESSICA SMITH: Yeah, I did talk to Senator Ron Wyden, and he says it's really time to start looking at long-term reforms as we've seen all of these problems with the way the US handles unemployment benefits throughout the pandemic. He says if Democrats manage to take control of the Senate-- so if they win both of those races in Georgia-- he will be the top Democrat-- or excuse me, he'll be the top lawmaker on the Senate Finance Committee, and doing this will be one of his top priorities.

So here are some of the ideas that are being tossed around. I talked to Wyden and a few other experts and lawmakers about what they would like to do. First, they would like to update the technology. You remember back in the spring when we first saw these record waves of jobless claims. The state systems were totally overwhelmed. They crashed. People had to wait for weeks or months for their benefits. So now lawmakers and experts want to update that technology. There seems to be broad bipartisan support for at least addressing that problem.

Next, some people say that the chaos throughout the pandemic has shown that the federal government should take over the systems instead of having this patchwork of systems from state to state. That is going to be a heavy lift to try to get that through Congress, but it's something that they might consider. Wyden says that it's time to look at that, but he is not actively supporting it yet.

Next, making gig workers eligible. That's another plan. The CARES Act did include a program that made gig workers, independent contractors, and others eligible for unemployment insurance, and now some say that change or at least something similar to it needs to be made permanent.

There's also a push to expand benefits, to establish a baseline standard that states must follow to make the benefits more generous or last longer. Not everyone will be on board with that plan because they say people in Mississippi don't necessarily need as much money as people in a place like New York.

So I asked Senator Wyden what he had to say about that. Let's watch.

RON WYDEN: Differences in the cost of living, certainly it's appropriate to take those into account. But my view is and what I'm going to be looking for is all of the ideas for making sure there is a floor of dignity for all our workers.

JESSICA SMITH: Wyden told me-- Wyden said he was fully aware that it's going to be difficult to get some of these changes through Congress, but he said he's going to try and make this a priority. He did point to the battle over that extra $600 boost in unemployment benefits. He said that shows just how difficult this could be going forward.

I did try to get a comment or an interview from the top Republican on the Senate Finance Committee, Senator Chuck Grassley, but his office did not make him available. And I should note I did put in the request before he was diagnosed with COVID-19 earlier this week.