Nearly 9M to lose all jobless benefits
For some Americans, Labor Day will mean more fear amid virus
WASHINGTON — Mary Taboniar went 15 months without a paycheck, thanks to the COVID-19 pandemic. A housekeeper at the Hilton Hawaiian Village resort in Honolulu, the single mother of two saw her income vanish as the virus devastated the hospitality industry.
For more than a year, Taboniar depended on boosted unemployment benefits and a network of local food banks to feed her family. Even this summer as the vaccine rollout took hold and tourists began to travel again, her work was slow to return, peaking at 11 days in August — about half her pre-pandemic workload.
Taboniar is one of millions of Americans for whom Labor Day represents a perilous crossroads. Two primary anchors of the government’s COVID-19 protection package are ending or have recently ended. Starting Monday, an estimated 8.9 million people will lose all unemployment benefits. A federal eviction moratorium already has expired.
While other aspects of pandemic assistance including rental aid and the expanded Child Tax Credit are still available, untold millions of Americans will face Labor Day with a shrunken social safety net.
“This will be a double whammy of hardship,” said Jamie Contreras, secretary-treasurer of the SEIU, a union that represents custodians in office buildings and food service workers in airports. “We’re not anywhere near done. People still need help . ... For millions of people nothing has changed from a year and a half ago.”
For Taboniar, 43, that means her unemployment benefits will disappear — even as her work hours vanish again. A fresh virus surge prompted Hawaii’s governor to recommend that vacationers delay their plans.
“It’s really scaring me,” she said. “How can I pay rent if I don’t have unemployment and my job isn’t back?”
She’s planning to apply for the newly expanded SNAP assistance program, better known as food stamps, but doubts that will be enough to make up the difference. “I’m just grasping for anything,” she said.
President Joe Biden’s administration believes the U.S. economy is strong enough not to be rattled by evictions or the drop in unemployment benefits. Officials maintain that other elements of the safety net, like the Child Tax Credit and the SNAP program (which Biden permanently boosted earlier this summer) are enough to smooth things over.
Labor Secretary Marty Walsh said he believed the country’s labor force was ready for the shift.
“Overall the economy is moving forward and recovering,” Walsh said. “I think the American economy and the American worker are in a better position going into Labor Day 2021 than they were on Labor Day 2020.”
Walsh and others point to encouraging job numbers; as of Friday the unemployment rate was down to a fairly healthy 5.2%.
But Andrew Stettler, a senior fellow with the Century Foundation, a left-leaning think tank, says the end of the expanded unemployment benefits is still coming too early.
Rather than setting an arbitrary deadline, Stettler says the administration should have tied the end of the protections to specific economic recovery metrics. He suggests three consecutive months with nationwide unemployment below 5% as a reasonable benchmark to trigger the end of the unemployment benefits.
“This does seem to be the wrong policy decision based on where we are,” Stettler said.
The end to these protections while the economic crisis persists could have a devastating impact on lower-middle class families that were barely holding on through the pandemic.
Potentially millions of people “will have a more difficult time regaining the foothold in the middle class that they lost,” Stettler said.
Biden and the Democrats who control Congress are at a crossroads, allowing the aid to expire as they focus instead on his more sweeping “build back better” package of infrastructure and other spending. The $3.5 trillion proposal would rebuild many of the safety net programs, but it faces hurdles in the closely divided Congress.
In the meantime, families will have to make do.
“These are two very important things that are expiring. There’s no doubt that there will be families impacted by their expiration and that they will have additional hardship,” Sharon Parrott, the president of the Center for Budget and Policy Priorities, said.
The COVID-19 response has been sweeping in its size and scope, some $5 trillion in federal expenditures since the virus outbreak in 2020, an unprecedented undertaking.
Republicans had supported some of the initial COVID-19 outlays, but voted lockstep against Biden’s $1.9 trillion recovery package earlier this year as unnecessary. Many argued against extending another round of unemployment aid, and Republicans vow to oppose Biden’s $3.5 trillion package lawmakers are expected to consider later this month.
States with higher levels of unemployment can use the $350 billion worth of aid they received from the relief package to expand their own jobless payments, as noted by an Aug. 19 letter by Walsh and Treasury Secretary Janet Yellen.