Many low-wage workers lost out in spring

Survey: 27% of service workers got benefits

Unemployment insurance has been a lifeline for millions who’ve lost work during the outbreak of COVID-19. But many of the cashiers, delivery drivers and other service workers who needed those benefits most were unable to get them in the spring, a new report finds.

In the months of April and May, just 27% of service workers who’d been laid off or furloughed were receiving jobless benefits, according to research released Wednesday by The Shift Project at Harvard University.

“It’s really a constellation of factors that lead to many workers not having these unemployment insurance benefits when they need them the most,” says Daniel Schneider, The Shift Project’s co-director.

Some who’d lost work didn’t apply for assistance because they didn’t think they were eligible, while others couldn’t complete the application because of technical glitches in the system, Schneider says.

Then there were those who submitted their claims but didn’t hear back about their status or who were approved for benefits but hadn’t received any payments by the time of the survey.

In many instances, such delays had devastating consequences.

COVID-19 job loss leads to hunger

Of those who’d applied for benefits but hadn’t heard back or begun to receive them, the report found 26% went hungry the previous month because

they couldn’t afford enough food, and 13% had to double up with friends, or perhaps sleep in their car or at a shelter because of housing insecurity.

Nearly 20% said someone in their household went without medical care because they couldn’t afford it.

“It’s stark but it shouldn’t surprise us,” Schneider says. “These are workers who were on the margins when they were working, so when a paycheck stops arriving, and the insurance system doesn’t kick in, of course, there are dire consequences.’’

The number of Americans filing firsttime claims for unemployment assistance has dropped significantly from the record 6.2 million who did so in early spring when most nonessential businesses were shuttered to slow the spread of the coronavirus.

But the weekly tally of first-time applications has remained stubbornly close to what was previously the alltime high of roughly 1 million on a nonseasonally adjusted basis during a 1982 recession.

Service sectors such as retail and hospitality, whose employees often earn low wages, were especially hard hit by the economic downturn.

And those trying to get assistance encountered state unemployment systems that were overwhelmed by the volume of claims, which rose even higher because of federal programs that enabled workers who typically could not get benefits to access them because of the pandemic.

Hardest states to get unemployment

The ability to get timely benefits often depended on where you lived. Minnesota offered the best access, with an estimated 77% of service sector workers who applied for unemployment assistance receiving payments in the spring, according to The Shift Project report. Florida, meanwhile, had the worst results, with just 8% of those applicants getting assistance.

Hurdles for jobless benefits

“Administration is quite different across states,” Schneider says. “In Florida, where we saw the fewest applicants get their benefits, that was policy ... to enact administrative burdens that make it more difficult.”

Though workers surveyed in the spring may have received benefits by now, newer applicants likely face similar obstacles, Schneider says.

“Many of the hurdles keeping people from receiving unemployment insurance in a timely fashion are not simply fixed,” Schneider says. “It would take real will by elected officials and funding” to straighten out the process.

And there is a larger issue that unemployment insurance can’t address, Schneider says. His research found 13% of those who did get jobless benefits still said they went hungry the previous month – as did 13% of service sector workers who remained employed.

“It reinforces for us that these jobs are not a fix for poverty,” he says. “We shouldn’t romanticize the position of those who’ve been able to hold onto these jobs.’’

“These are workers who were on the margins when they were working, so when a paycheck stops arriving, and the insurance system doesn’t kick in, of course there are dire consequences.” Daniel Schneider The Shift Project’s co-director