A headache for those out of work
Delayed unemployment benefits cause pain across the US
For Cocoa, Florida, residents Christine Powell and her fiance, Robert Hammond, the relentless downward economic drag of the past six months has been suffocating.
First, Hammond was put on medical leave in December after he broke his hand. Then, as the 49-year-old landscaper was about to return to his job, the pandemic hit. Hammond applied for unemployment insurance, but he hasn’t received a dime, he said, and no one will answer his or Powell’s repeated calls to Florida’s Department of Economic Opportunity.
“I felt hopeless,” said Powell, 30, a mother of two who works as a supportive living coach at a behavioral health agency. She, too, suffered a wage cut since the start of the pandemic. Her hours were reduced to just 10 per week, and her income keeps her barely above the threshold to qualify for unemployment.
Without enough money to pay their bills, Powell and Hammond had to sell their flat-screen TVs, her laptop and her children’s Xbox. Powell finally had to make a heart-wrenching decision: In
May, she pawned her engagement ring.
“I was doing what had to be done to survive,” Powell said, adding that she’s angry and frustrated with the unemployment system.
“Someone needs to accept the blame, and it needs to be fixed,” Powell said. “It’s not fair to me or the hundreds of thousands of other Americans that are going through this.”
Gripped by one of the deepest recessions since the 1930s, state governments across the country have to race to catch up with escalating demand for unemployment assistance. Many lacked the technology to deal with the massive wave of layoffs and furloughs, experts said, creating two big issues for their computer systems.
First, there was a surge in people filing for traditional unemployment
“Someone needs to accept the blame, and it needs to be fixed. It’s not fair to me or the hundreds of thousands of other Americans that are going through this.”
Christine Powell Whose hours were reduced during the pandemic
claims. Then, the Coronavirus Aid, Relief and Economic Security Act created a federally funded Pandemic Unemployment Assistance program that allows furloughed, self-employed, independent contractors, temporary workers and gig workers to seek benefits – people who didn’t qualify under traditional unemployment.
After more Americans became eligible for unemployment, states had to repurpose their computer systems on the fly, according to Andrew Stettner, a fellow with the Century Foundation.
“It’s created a level of confusion and frustration for a lot of people,” Stettner said. “The challenges have been widespread among states. The volume has been so high that people have struggled to get through.”
Fifty-seven percent of unemployment applications have been paid, according to the Century Foundation, a nonprofit think tank that analyzed the latest available jobless claims and payment data from the Labor Department and Treasury Department from March 1 to May 15.
Expanded benefits have thrown a lifeline to many Americans. The coronavirus relief act provided an additional $600 per week to individuals collecting unemployment, but that’s set to expire at the end of July if Congress doesn’t pass new legislation. Democrats proposed an extension, either at the full or a reduced amount, but some Republicans argue the extra money has encouraged many Americans to remain jobless.
Florida, Georgia lag other states
Washington, Florida and Georgia were among the slowest to pay unemployment claims – with fewer than four in 10 claims being paid, according to the Century Foundation's calculations.
Statistics provided last week by the state of Washington show that 39% of claims have been paid, which is roughly equivalent to numbers provided by the Century Foundation. But once ineligible claims were weeded out and certain claimants were funneled into the PUA program, 71% of all claimants ended up getting their money, according to Nick Demerice, public affairs director for Washington State Employment Security Department.
The state’s dashboard shows that Florida received 2.96 million claims since the beginning of the pandemic and paid on 1.66 million of them – a total of 56%. It notes that Florida deemed 1.7 million of the claims to be eligible; therefore, it says it has paid on 97% of eligible claims.
Asked for further comment, Landrum did not respond.
The state of Georgia presented statistics showing it has processed more than 2.8 million claims since the outset of the pandemic, but has paid out on only 820,858, which amounts to less than 30%.
Though Kersha Cartwright, director of communication for the Georgia Department of Labor, acknowledged that looks pretty bad on the surface, she said that’s only because of the peculiar way Georgia has processed claims since the start of the pandemic.
Instead of allowing claimants to proceed from beginning to end, regardless of how much money they earn or how long they’ve worked, Georgia makes claimants go through the process in two phases. The first phase functions the way the system has always functioned. If claimants have not worked for at least five quarters (three-month periods) and have not made at least $1,134 in two of those five quarters, their claims will be rejected. Once they’ve received that rejection, they can proceed to phase two and apply for Pandemic Unemployment Assistance.
It’s all the rejections in phase one that make it look like Georgia hasn’t been paying as many claims, Cartwright said, but that’s not the case. The bottom line, she said, is more than 90% of eligible applicants have gotten their money.
Across the U.S., states were initially slow in paying unemployment claims, but the pace of claim payments has accelerated, according to Jay Shambaugh, an economist and director of the Hamilton Project at the Brookings Institution.
In June, there was a sizable jump in unemployment payments made by the U.S. Treasury. They climbed to $115.7 billion last month, up from $93.7 billion in May and $48.4 billion in April. Those payments were $3 billion in February before unemployment spiked in March.
“It’s clear that very early on during the pandemic, lots of people weren’t getting paid,” Shambaugh said. “As weeks have dragged on, more people have been getting their money. People still facing delays should eventually be getting their benefits.”
No one will answer their calls
Gerald Redding, 41, was one of those people who sought help from the government. He lost his job as a mechanic in Detroit in early March and still hasn’t received any money.
He began the process of seeking unemployment and was fortunate to land another job within a week. Two days before he was scheduled to start, his new employer, Fontaine Modification, a truck service, temporarily shut down its facility because of the pandemic.
Like Powell in Florida, Redding said he couldn’t get anyone from the Michigan Department of Labor And Economic Opportunity to answer his calls for months and he couldn’t claim his weeks on the website.
“The online system is in shambles. I keep getting booted off,” Redding said. He reached out to his governor’s office and state and local representatives to no avail. “Hardworking people are being put through the wringer. We’re struggling, and there are no answers.”
So much time passed that he got called to return to his job in June, but his hours were reduced, and he still qualifies for PUA. He had been working 40 to 82 hours per week. Now the $300 he makes working part-time per week won’t cover all of his bills or food for his family. In Michigan, unemployment maxes out at $362 a week unless Congress approves legislation extending the $600 extra benefit beyond July.
“I’m scared. I’m on the verge of losing it all. I don’t know if I’m going to wake up in the dark, or if there will be an eviction notice on my door,” Redding said. “My family is looking to me as the provider. Sometimes I hide in the bathroom and cry.”
The pandemic exposed weaknesses in the public health and economic systems, the pervasive extent of racial and social inequity and Americans’ low immunity to financial disruption, said Jamie Kalamarides, president of group insurance at Prudential, raising the question of whether financial resilience is truly possible.
“Blacks, Hispanics, women, smallbusiness owners and other minorities have suffered incredibly more than affluent white men during the pandemic,” Kalamarides said. “Society is judged by how we treat those who are less fortunate. We need to rebuild the path to the middle class.”
Some may have to change careers
Priscilla Miranda of Rosemead, California, doesn’t know whether she’ll have a job to return to once the theme park she works at reopens. The 30-year-old applied for unemployment in March when the park shuttered its doors, but she still hasn’t received any money.
Since then, she’s been forced to deplete the money from her savings account, which will run out soon.
“It’s frustrating,” Miranda said. “I’ll have to start all over again once my savings are gone. I’m not begging for money that’s not mine. Companies have unemployment insurance for a reason. And it’s not being rightfully paid out.”
She sent documents to verify her identity with California’s Employment Development Department but never heard back. No one will answer her calls, she said, and she can’t log into the system online because the department hasn’t sent her an account number.
Miranda, who worked as a stage manager for live shows at a Southern California theme park, doesn’t know whether theater performances will be the same again after the pandemic because of social distancing measures.
“It’s scary. This isn’t a normal 9-to-5 job. I can’t just wear a mask. I don’t know if I’ll ever do this job again,” said Miranda, who has worked in theater since high school. “I don’t have a backup plan. This is all I’ve ever known.”
COVID-19’s financial toll
The pandemic reversed nearly three years of financial wellness gains in the USA, and 51% of Americans say their financial health has been negatively affected, according to Prudential’s Financial Wellness Census, a survey provided exclusively to USA TODAY. For many, the impact has been devastating.
About 26% of survey respondents had an income disruption, including furlough, reduced compensation or work hours. Nearly 1 in 5 saw their household income fall by half or more in the months after the outbreak, the data shows.
Of those with job loss or income disruption, 17% lost employer contributions to a retirement plan, 14% lost health insurance and 10% lost group life insurance – ripping away critical elements of their personal safety net.
More than half of U.S. adults saw their finances compromised, and people of color, women, younger people, smallbusiness owners, gig workers and those employed in the retail industry were disproportionately affected.
Alexis Roldan, 20, is one of many Americans falling deeper into debt. The college student, who lives in Orange County, California, had to ask her family for money when she was furloughed in March from her parttime job at retailer Aerie, an American Eagle brand that sells intimate apparel and activewear.
“I’m already in student debt. I don’t need to owe my family as well,” Roldan said. “I need this money to survive and eat.”
Roldan, like Miranda, sent documents to verify her identity with the Employment Development Department, but no one will pick up her calls either, she said.
“It’s an absolute nightmare,” said Roldan, who has since returned to work part-time as a merchandise lead at Aerie but still hasn’t received any government benefits from when she was unemployed. “I’ve been told to be patient. But patience doesn’t pay my bills. It doesn’t pay my rent.”
Gig workers face challenges, too
Rick Suryk, 68, was one of the lucky ones. Suryk, who is retired, is a driver for Uber and Lyft in Belleville, Illinois. He went 16 weeks without getting an unemployment check but received $9,800 in benefits from late March to June.
In March, he was told to apply for traditional unemployment, then get denied, so he could qualify for Pandemic Unemployment Assistance. He was a gig worker and wouldn’t qualify under typical unemployment, he said.
After six weeks, he was denied, then applied for PUA. Ten weeks went by, and his online account said it was still “pending” for PUA. He couldn’t get anyone on the phone to help him.
“I wanted to rip my hair out!” Suryk said, who had to go back and refile through traditional unemployment.
In a twist of fate, the serpentine belt in his car broke, and his mechanic’s wife, who also worked for Uber and was dealing with her own unemployment issues, gave Suryk a six-digit code that she used to get ahold of a real person at the unemployment office.
Suryk said he feels fortunate he finally got a real person to talk to him and help him receive his money, but he has concerns about returning to the road.
“It’s nerve-wracking. I still feel at risk catching the coronavirus while driving,” Suryk said. “I could be picking up someone coughing a few feet from me. I would be putting myself in danger.”