Kathleen Pender:
From 750,000 to 1.6 million Californians could abruptly lose unemployment benefits by the end of this year.
Somewhere between 750,000 and 1.6 million Californians will abruptly lose federal unemployment benefits at the end of December, unless Congress passes and the president signs a bill extending them, according to two reports issued this week.
An analysis released Thursday by the California Policy Lab estimates that 750,000 Californians will no longer receive benefits when two programs created under the federal Cares Act expire Dec. 26.
The Century Foundation, in a report issued Wednesday, estimated that 9.1 million
Americans, including 1.6 million in California, will lose benefits at year end.
Both programs come to a hard stop on Dec. 26, meaning those who have not yet received the maximum weeks of benefits available will lose them.
“The cutoff is the day after Christmas, which is so hideously brutal,” said Judy Conti, government affairs director with the National Employment Law Project. “That money is going toward food and gas, for utilities and mortgages. My main concern is the hit that unemployed workers and their families will take when they can’t afford the bare necessities of life, but also what it could do to weaken our economy as a whole.”
During the past recession, federal unemployment benefits “had a soft cutoff, which allowed individuals already receiving benefits to continue doing so until their full term was exhausted, but stopped any additional workers from qualifying,” the Century report said. A soft cutoff “creates a gentle downward slope for workers and the economy, while a hard cutoff creates a cliff.”
Most people facing a hard cutoff are currently receiving Pandemic Unemployment Assistance or PUA. In California, people who didn’t qualify for regular state unemployMillions
ment can get up to 46 weeks of PUA. This includes people who were selfemployed, didn’t have enough earnings to qualify or had run out of state benefits.
The policy lab estimates that 583,000 people, or 40% of those receiving PUA in October, will lose it at year end. The other 60% will have found work or exited the program for other reasons before then, said Till von Wachter, faculty director at the California Policy Lab, a research center housed at UC Berkeley and UCLA.
The Century Foundation estimates that 1.6 million will lose PUA at year end.
The other people facing a hard cutoff are former employees receiving Pandemic Emergency Unemployment Compensation, or PEUC. This program provides up to 13 weeks of federal benefits to people who exhaust their regular state unemployment benefits, which last up to 26 weeks in California. It also ends Dec. 26.
The vast majority of people getting PEUC can transition to yet another benefit program when they exhaust their 13 weeks or when PEUC ends, whichever comes first. This program is called FederalState Extended Duration. Most states call it “extended benefits,” but in California it’s called FedEd.
Today, people in California can get up to 20 weeks of FedEd. When PEUC ends, people will transition straight from regular state benefits to FedEd. ( People who were receiving PUA are not eligible for FedEd.)
FedEd is a longstanding program that kicks in during periods of high unemployment and provides extended state benefits based on the state’s unemployment rate. Not all states provide this, and some give fewer than 20 weeks.
The maximum could drop below 20 weeks in California if its unemployment rate were to fall precipitously, although that’s not likely to happen soon, von Wachter said. His report estimates that about 166,000 people, or 6% of those receiving regular state unemployment insurance in October, won’t be eligible for FedEd and face a hard cutoff after December. These are mostly lowearning individuals who would have met the PEUC requirements but don’t meet California’s requirements for FedEd.
The Century Foundation estimated that all of those receiving PEUC will transition to FedEd in California.
The policy lab used “individual level data” in its analysis, von Wachter said, which is one reason its results are different than the Century Foundation’s. This let the lab “make more precise predictions on who is currently receiving benefits, exit rates and available benefit durations” and take into account that individuals “churn” through the unemployment system or get partial UI. “For the same reason, they cannot see which individuals exhaust PEUC and are not eligible for FedEd,” von Wachter said.
Many people who filed for unemployment in March, when the shelterinplace orders took effect, ran out of regular state benefits, moved onto PEUC in September and will move to FedEd in December.
“A second wave of exhaustions is expected to crest in midMay,” when these people begin to exhaust their 20 weeks of FedEd, the policy lab report said.
Barbara Squires is in that boat. She has been on unemployment since midMarch, when she lost her parttime job of nine years as a personal assistant to a busy family in Kentfield. She got regular state benefits, followed by the 13week extension, which runs out in midDecember. If she qualifies for FedEd, that should carry her through midMay, when she hopes a vaccine will be available and she can return to work.
If that doesn’t pan out, she’s not sure what she will do.
“I’m single and haven’t saved a lot of money,” she said. “I have a certificate of deposit that matures in February. That should help.”
Whether Congress extends benefits past December is anyone’s guess. Conti of the National Employment Law Project doesn’t expect any “honesttogod negotiations until they come back after Thanksgiving.”
Earlier this year, lawmakers failed to extend a third Cares Act program, which added $ 600 a week to federal and state unemployment benefits from April through July. President Trump authorized a separate program called Lost Wages Assistance that added $ 300 a week to benefits for up to six weeks retroactive to late July. That program has expired.
In late September, House Democrats released a somewhat slimmed down version of the Heroes Act, which passed the House in May but went nowhere. The revised plan would revive the $ 600 bonus retroactively from Sept. 5 through as late as March, according to a summary by Matt Weidinger, an unemployment insurance expert with the American Enterprise Institute. It also would revive the 13week extension and add another 13 weeks and extend Pandemic Unemployment Assistance through January.
On Monday, Presidentelect Joe Biden urged Congress to pass a relief bill “like the Heroes Act that the House passed six months ago.”
Republicans have proposed extending the $ 300aweek boost through the end of December, but have not passed a bill extending unemployment, Weidinger said.
Although the Cares Act passed with broad bipartisan support, the economic picture has changed since then. The September unemployment rate was just 3.3% in Nebraska and 11% in California.
“It doesn’t make a whole lot of sense to provide a total package of unemployment benefits in Nebraska that exceeds people’s wages when there is a labor shortage,” Weidinger said. “If you are in Nevada or Hawaii where the tourist industry is reeling, additional help makes some sense. Given that wide array of state experiences, it makes a lot more sense,” instead of giving everyone up to 72 weeks of unemployment, “to let states figure out what to do with the money.”