New $300 federal benefit? Not likely for some

JACKSON, MISSISSIPPI » Down to a weekly unemployment check of $96, Fakisha Fenderson brushed aside her doctor’s advice last month and began looking for a job.

In mid-May, Fenderson’s employer, a door manufacturer, sent her home after a co-worker tested positive for the coronavirus. But the 22-year-old, who is six months pregnant and has asthma, felt desperate for work after a $600-aweek federal jobless benefit expired at the end of July.

Even worse, she doesn’t qualify for a smaller $300-a-week check the Trump administration is now offering. That program, announced Aug. 8, requires the jobless get at least $100 in state benefits to qualify.

“It would have been such a huge help,” said Fenderson, who has a 1-year old son and lives in Laurel, Mississippi. “It’s kind of crazy, and it doesn’t make sense.”

The administration rolled out the new $300-a-week benefit, using money from a $44 billion disaster relief fund, after Congress and the White House failed to agree to extend the $600 payment.

Yet because of a raft of restrictions and bureaucratic hurdles, more than 1 million of the unemployed won’t receive that $300 check, and their financial struggles will deepen. Many, like Fenderson, were low-paid workers whose state unemployment aid falls below the $100 weekly threshold. That stands to widen the inequalities that disproportionately hurt Black and Latino workers, who are more likely to work in low-wage jobs.

Some gig and contract workers won’t qualify, either. What’s more, the Trump administration’s program requires the unemployed to certify that their job loss stemmed from the coronavirus — a provision that could trip up many. And the disaster relief money that is funding the new benefit could run dry in coming weeks.

Unemployment benefit applications shows that the pandemic keeps forcing many businesses to slash jobs. Counting all the government’s aid programs, roughly 29 million people are receiving some form of unemployment aid.

The rules to qualify for the new $300 federal check could undercut the administration’s efforts to aid the jobless at a time of high unemployment. Eliza Forsythe, an economist at the University of Illinois,

calculates that about 6% of people receiving state unemployment aid — 840,000 Americans — won’t qualify for the $300 federal benefit because they earned too little before the pandemic. And that figure is likely an underestimate, Forsythe said, because it doesn’t include gig and contract workers.

In California, nearly 200,000 recipients of jobless aid receive less than $100, according to the California Policy Lab. Officials in North Dakota have estimated that only 41% of their jobless aid recipients will qualify for the $300 benefit. In Texas, up to 347,000 recipients, about one-fifth of the state’s total, may not qualify.

Responding to the problem, five states — New Hampshire, Kentucky, West Virginia, Montana, and Vermont — have said they will raise their minimum weekly unemployment payouts to $100 so that the unemployed in their states can receive the $300 check, said Andrew Stettner, a senior fellow at the Century Foundation.

Forty-four states have gained approval from the federal government to provide the $300 federal check, though these authorizations are typically for just three weeks of payments. States must then apply for additional weeks. Just seven states, with 15% of the nation’s unemployed, have begun paying out the benefit, the Century Foundation calculates.

The $300 benefit can be retroactive, so many states will pay it to people who were unemployed in early August. That could drain the available money by mid-September.

Each state sets its weekly unemployment benefit using formulas based on the income the recipients received in their most recent jobs. For people earning the minimum wage or not much above it, that can mean minuscule aid. Mississippi’s minimum payment is $30. Nevada’s is just $16, Connecticut’s $15.