If Donald Trump and the Senate Republicans get their way, about a week from now, the United States will swap an imagined economic problem for a predictably devastating one, economists warned.
To keep people safe in their homes during the pandemic and support them during the resulting job crisis, Congress in March instituted a $ 600 increase to weekly unemployment insurance benefits. Unless lawmakers intervene, the money stops on July 31.
Money is an unusually robust benefit in a country with a weak social safety net. With it, researchers estimated that between 40% and 68% of US workers could earn more from unemployment than working, due to the high concentration of job losses in low-wage jobs.
Republicans, as a result, have warned of hordes of “disincentivized” people not to return to work. But economists say the real crisis is what happens when those same people have $ 2,400 less each month to pay bills, rents, and groceries.
Sara Gard has been suspended since April from her hospitality job, and said that without the $ 600, she and her two children will depend entirely on her husband’s salary.
“It won’t cover everything, so what will it give? Home? Food? “Gard said.
Once it’s safe to return to work, Gard has a job that he loves waiting for at a company he admires and has been with for 15 years. But without the $ 600 increase, you will have to give up license protections to take a new job near your home in Atlanta.
“It is a feeling of being caged and trapped, and every decision I can make is a bad one,” said Gard.
Gard, 39, is the breadwinner for his family, and said he would return to his job for less money if that meant he could continue to raise the $ 600. An additional stress for Gard is that at the same time the $ 600 is also slated to lose state unemployment insurance due to limits on how long people can collect it.
State unemployment averages $ 340 per week, a replacement for 44% of workers’ average wages. In states with the weakest unemployment benefits, that pay rate is 25% or less of the worker’s average weekly wage. For people who have not yet reached the limits, state unemployment is all they will have, unless Congress agrees to a replacement.
As the benefit deadlines approached, Gard was also forced to decide before July 10 whether to send her two- and five-year-olds to school or have them take classes online in the fall.
She tries to compartmentalize the different problems, but said: “It just stops working at some point, because every possibility ends in: If only someone had done something four months ago, they wouldn’t have to try to decide whether to give up my kindergarten as a tribute or What? Or I decide I’m not going to work, but if I do that, do I lose my house? Everything is one domino touching another. It’s just horrible. “
The domino effect goes beyond the Gard family. More than a million people have filed new unemployment claims every week for 16 weeks – women, especially women of color, are the hardest hit by the losses. When millions of families have less money to spend, the country’s economy strains.
The abrupt completion of the expansion could cost 2 million jobs by the end of the year, economist Jason Furman warned a House committee in June. The Institute for Economic Policy estimated that 5 million jobs could be lost by July 2021 if it is cut.
There is also a public health threat if people are forced to return to work in a pandemic that has killed more than 137,000 Americans because they cannot survive without unemployment benefits.
For security reasons, Samantha Acuña would like to be home. Instead, she works shift duty as a cocktail waitress at a Las Vegas casino pool, where patrons are not required to wear masks.
She lives with her parents and her mother has asthma, but people cannot reject the job they had before the pandemic and still receive benefits, unless they meet specific guidelines.
Acuna gets the prorated $ 600 boost for days she doesn’t work, but if that money goes away, she’ll have to find a full-time job to continue paying her rent, her car, student loans, and phone. invoices
“The pandemic will get worse if we don’t pay attention to it,” Acuña said. “So I would rather keep that income so I could be home and this could all end faster.”
Democrats have introduced legislation that would expand the program, with limits. Republicans have said they are against the $ 600, but have not said what they would replace it with.
Both sides have been on a two-week break that ends on Friday, two weeks before the program’s official expiration on July 31. For most people, however, payments actually end a week early.
The $ 600 expansion is far from perfect, but it is a welcome solution in a country with outdated and underfunded unemployment systems that have left millions without benefits months after filing claims. In Alabama, people slept through the night in a parking lot so they could speak to a representative from the state unemployment agency.
Michele Evermore, senior policy analyst for the nonprofit National Labor Law Project, said: “We have systematically destroyed any other part of the social safety net, unemployment insurance as well.”
Evermore said that since the last recession, state governments have made benefits more difficult to access and have reduced the amount of benefits. The Care Act, which included the $ 600 expansion, covered these problems.
Without it, they are likely to return in full force.
“When systems are set up with the goal of catching people, catching people, cutting people off, you can’t change that overnight when you want to pay benefits quickly,” Evermore said.
She said the lingering myth that people charge unemployment to take advantage of the system ignores the importance of profit to the national economy. “This is a system that has been undermined for a while, and this is the moment we can use to implement permanent reforms, now and forever,” said Evermore.
Research published in June by the Chicago Federal Reserve Bank found that people who receive normal unemployment benefits “look for work more intensively” than unemployed people who do not receive them. “During the current economic climate, one might expect that a greater share of the unemployed will receive UI [unemployment insurance] benefits and look for work more intensely, “the article says.
In mid-March, Karen Kent was fired from her job as a cafeteria worker in New Jersey. She has been looking for a job because without the $ 600 she will have to find a job. But so far, her searches have only found jobs with direct client contact, something she can’t face because she has asthma and a heart condition.
The $ 600 has been a “lifesaver” for Kent, 47. Her husband is still working, but it is not enough to support the family. She also lost a part-time job at a restaurant she had so her family could get dental insurance.
“This was starting to give me a step back in the door to hope, I felt like I was working on something and they just wanted to take it away from me,” Kent said. “I work hard. I am a workhorse.”
Kent is a fighter. She corners politicians at public events and brings people together on social media, but is concerned that the situation she and others face will not reach the political class. Kent said: “I feel like they need the working class, but we are being defeated.”
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