EDITOR NOTE: Around 7.5 million Americans will be losing pandemic-era unemployment benefits in September. It’s true that there are millions of jobs available, but whether due to a lack of skills in demand or to unfavorable terms of employment, those jobs are not getting filled. And with a new surge in delta variant cases gaining strength, the near-term economy is, once again, highly uncertain. Are we slated to see an enhanced repeat of 2020, possibly with new variants besides delta, or will vaccinations eventually mute the spread? The answer is that we don’t know how devastating it might be. The practical thing to do would be to not get too comfortable and to hedge any potential economic pain that might come as a result, similarly to how you’d hedge against a car accident by buckling up your safety belt when driving.
Roughly 7.5 million workers who’ve relied on pandemic-era unemployment benefits will be cut off from jobless aid altogether when they are set to expire on September 6, according to estimates from The Century Foundation, a left-leaning think tank.
As of mid-July, roughly 9.4 million people were drawing benefits from Pandemic Unemployment Assistance (PUA), which covers those not traditionally eligible for aid, including freelancers and gig workers, and Pandemic Unemployment Emergency Compensation (PEUC), which extends aid to those who’ve exhausted their state’s benefits period. Workers drawing from either of these programs make up more than 72% of Americans collecting unemployment insurance, according to the Department of Labor.
The programs, which support people who’d normally fall through the cracks of the unemployment system, were established in the March 2020 CARES Act and extended until Labor Day 2021 through the American Rescue Plan. When pandemic unemployment was last extended in March 2021, it kept an estimated 11.4 million people from falling off the “benefits cliff.”
Many cut off from aid early
While pandemic unemployment programs officially run until September, governors in 26 states withdrew early in June and July. The moves left some 1.6 million workers without any jobless aid over the last month, according to a statement from Andrew Stettner, a senior fellow at The Century Foundation.
Anna Keeton, 32, of Memphis, Tennessee, stopped receiving PUA benefits after July 3. They were furloughed from their EEG technologist job at a children’s hospital in March 2020, then received orders from a doctor to shelter in place due to an underlying condition that could increase their risk of serious illness if they contract Covid. Keeton has been unable to find new work due to a worsening medical condition and, until last month, said the PUA benefits, which amounted to less than what they earned while working, helped them stay current on essential bills and groceries.
Since July, Keeton has been getting by with financial help from friends and family. “If it weren’t for friends and family, if I didn’t have this community, I would be in my car,” Keeton tells CNBC Make It. “That’s if I could keep my car. If not, I’d be on the street or in a shelter.”
In Atlanta, Jennifer Askew, 39, said her PUA benefits were “a lifeline” to stay in her apartment, pay for utilities and buy groceries. The state of Georgia stopped providing PUA on June 27.
The single mom of two daughters works as a court reporter on a 1099 contract basis. If it weren’t for PUA, she wouldn’t be eligible for jobless aid to make up for lost wages. Askew’s opportunities for work have been extremely inconsistent since the state’s judicial emergency orders limited court operations at the start of the pandemic.
Askew drained her savings in order to pay bills before her PUA payments kicked in during the spring of 2020, and her payments were less than what she earned while working full-time. She says she recently had to shut off her cellphone service in order to afford food.
Each month for the last year and a half, Askew has had to wait and see whether the judicial emergency order would lift so she could find more work again. Work picked up a little in June, but without supplemental PUA, it’s still not enough to make ends meet fully. “Now I’m just borrowing and falling behind. I don’t know what’s going to happen.”
She’s frustrated lawmakers are letting benefits expire for millions of Americans like her, if they haven’t been cut off by their state already.
“As some job sectors go back to normal, others have been forgotten about,” Askew says. “And with the delta variant beginning to surge again, I’m worried. Are they going to shut down the courts or prohibit gatherings again? With so much uncertainty around [Covid], it feels like the worst time to end benefits.”
Ending aid hasn’t spurred hiring
Critics of pandemic aid have said generous benefits, including a $600 weekly supplement that dropped to $300 per week last summer, have kept people from accepting new jobs that would jumpstart the economy. Many employers, particularly in leisure and hospitality, have had trouble filling a growing number of opening roles as consumer activity has picked up since the spring.
But Census Bureau data suggests recipients didn’t rush to find jobs in states that cut off pandemic aid early, according to research from Arindrajit Dube, an economics professor at the University of Massachusetts Amherst.
Previous research has suggested that financial assistance hasn’t kept people from taking jobs, but rather availability of paid work; workers’ individual health and safety concerns; and access to child care all play a large role in whether or not they can find suitable work during the pandemic.
All three are concerns for Samantha Lyons, 48, from Kansas. She used to run her own business as a real estate consultant, but lost all of her work once the pandemic hit. The last time she received a PUA benefit was on December 26, 2020. For the last seven months, she’s contacted everyone she can think of to figure out why her claim was flagged for fraudulent activity. Without access to her benefits, she’s had to take out payday loans, racked up debt, ruined her credit and lost her housing.
Two months ago, she moved herself and twin 15-year-olds to Seattle, where she has two adult children they can stay with for part of the week. Lyons and her twins live in a hotel the rest of the week. She has an underlying condition and doesn’t feel safe working an in-person job. And most of the remote jobs she’s applied for indicate they will be returning to the office soon.
The disruptions have been devastating for her two teens, who need help during the day to do distanced learning. “My kids have lost their home twice in nine months,” Lyons says. “They failed school. They’re depressed. They’ve both been suicidal. It’s destroyed their lives. They can’t even be kids.”
The inconsistency also makes her own job search feel impossible: “For people without PUA who are now homeless, how do you go to a job if you don’t have a place to shower and get a good night’s sleep?”
What Lyons really needs, she says, is to finally be approved for Covid relief from the Small Business Administration so she can get her business back up and running.
“If I pause my business, I will lose my business,” she says. “I will lose everything I put into it. Believe me, I don’t want their PUA. I want my business back.”
Jobless workers are concerned about delta variant
Rising Covid cases due to the contagious delta variant make finding a suitable job even harder.
For Lyons, who is immunocompromised, the part-time minimum-wage jobs available in her area present more risk than opportunity. She worries for in-person workers whose workplaces don’t mandate Covid health and safety protocols, like vaccine requirements, masking or social distancing.
“I’m all my kids have,” she says. “I’m not going to put myself in harm’s way for $8 an hour that won’t even pay the rent.”
In Tennessee, Keeton isn’t hopeful that Congress will extend aid again before September. They’re already planning to move across the country to Colorado to live with a friend if they’re unable to find another way to pay the bills.
Even if an extension is granted, they worry governors could end federal assistance on a state-by-state basis. “I think it could be more devastating than what people in Congress are prepared for,” Keeton says.
Original post from CNBC