USA TODAY International Edition
Millions of jobless on brink of poverty
Unemployment aid runs out as relief bill stalls
Jo Marie Hernandez doesn’t know how she and her 4- year- old daughter will survive after her unemployment aid lapsed this weekend.
Hernandez, who lives in Olean, New York, is on the brink of losing her home in days after she lost her job as a customer service associate at a gas station in the spring. Enduring prolonged unemployment, she’s struggled to make ends meet and has nothing left in savings to keep her afloat.
“I only have $ 100 left to my name. My whole world is shattered,” says Hernandez, 32, who was forced to put her car up for sale. “We can’t wait a few weeks for help. We’re starving and will be out on the street soon.”
“We can’t wait a few weeks for help. We’re starving and will be out on the street soon.”
Jo Marie Hernandez, Mother in Olean, New York
President Donald Trump delayed signing a $ 900 billion COVID- 19 relief bill this weekend and demanded that lawmakers more than triple the size of personal aid checks, leaving 14 million unemployed Americans such as Hernandez without an economic lifeline for rent and food. That has particularly hit minority workers, who face further household financial distress, eviction and hunger as aid dries up after months of deadlock in Congress.
“Politicians keep giving us false hope, but they are out of touch with the American people,” Hernandez says. “It’s not easy being poor. No one sees us.”
Democrats and Republicans blamed each other for their inability to come to an agreement until this month. While unemployment benefits remained a point of contention, House Speaker Nancy Pelosi, D- Calif., railed against Republicans and the Trump administration for their demands that
companies be shielded from coronavirus- related lawsuits. Senate Majority Leader Mitch McConnell, R- Ky., opposed Democratic requests that state and local governments be given more funds to offset their budgets after the pandemic. Neither liability protections nor state and local aid ended up in the final bill.
The stalled measure raises concern about critical aid for small businesses and an eviction moratorium set to expire at the end of the month.
The fate of the relief package is uncertain – along with the $ 1.4 trillion spending bill attached to the measure that would keep the government open past Monday – which Trump signaled he may veto if individual payments to Americans aren’t increased to $ 2,000 from $ 600.
Congressional leaders are scrambling to avoid a government shutdown Tuesday. The House plans to vote Monday on whether to substitute the $ 2,000 checks in the bill.
That is too little, too late for millions on unemployment, experts warn. The economic repercussions will be dire for struggling Americans as layoffs remain historically high and the pandemic forces further business closures after a spike in COVID- 19 cases.
“Without those unemployment checks, people won’t take their insulin. There will be foreclosures and evictions. People will sell their car. People won’t eat. The human toll can’t be overstated,” says Michele Evermore, senior researcher and policy analyst for the National Employment Law Project.
The nation has recovered 56% of the 22.2 million jobs wiped out in the health crisis. The total number of COVID- 19 cases worldwide has topped 80 million, and the death toll in the USA has surpassed 332,000, according to Johns Hopkins University.
Small businesses on the brink
The bill would replenish the Payroll Protection Program, which provided loans for struggling small businesses to keep their workers on the payroll.
Renard Beaty, owner of Kick Start Martial Arts in Atlanta, received a loan in the spring, which helped sustain his small business after he was forced to lay off employees.
He fears he’ll have to cut his staff again without additional relief for his mixed martial arts studio.
“It’s a scary time. If I have to close my doors because I can’t pay my rent, it will lead to bankruptcy, which means I may lose my house,” says Beaty, 58. “This is all I have. No one will hire me at my age. Washington is playing politics in the worst way with people’s lives.”
Nearly 5 million people, including 1.3 million children, will fall into poverty in January if Congress fails to extend temporary pandemic unemployment programs that expired Saturday, according to a study by Columbia University.
An extension of those unemployment benefits and a weekly $ 300 federal supplement would keep 7.6 million Americans out of poverty in January, including 2.3 million children, Columbia University researchers found.
“How do people end up in long- term poverty? They typically lose their job and their unemployment benefits run out before they can find another one,” says Andrew Stettner, senior fellow at the Century Foundation, a think tank. “It’s a spiral that they can’t get out of that leads to mental health problems.
“That’s what we’re trying to prevent,” Stettner says. “We don’t need to make this pandemic so much worse than it already is by not dealing with the economic consequences.”
An eviction moratorium, which was set to be extended until Jan. 31 in the bill, will expire at the end of the month if the legislation doesn’t become law. If the moratorium ends, 30 million to 40 million Americans could be at risk of eviction because they can’t pay the rent, according to an analysis by the Aspen Institute, a nonpartisan policy think tank.
Disparity in jobless rates grows
The loss of unemployment payments hits minorities, especially Black workers, the hardest. They typically have higher rates of unemployment and longer durations of joblessness, according to Evermore.
The duration of unemployment has historically been longer for Black and Asian workers than for whites. Unemployment for Black and Asian workers typically lasted an average of about 26 weeks before the pandemic, compared with 20 weeks for white and Latino workers, Evermore says.
The pandemic has widened the income inequality for Black, Latino and Asian workers and the divide between the haves and have- nots, experts say. Wall Street roared back to record heights after the fastest crash in history in the spring, but much of the economy continues to struggle and many Americans who don’t own stocks or retirement accounts missed out.
“For months, people have been living below the poverty level. They don’t have any savings,” Evermore says.
In March, the Coronavirus Aid, Relief and Economic Security Act created two programs to help keep jobless workers afloat after the pandemic battered the global economy and led to a historic wave of unemployment. The two programs ended Saturday.
The first was the Pandemic Unemployment Assistance ( PUA) program, which provided aid to self- employed, temporary workers and gig workers. It included a $ 600 weekly supplement for jobless workers through late July.
The second program was Pandemic Emergency Unemployment Compensation ( PEUC), which provided 13 weeks of benefits beyond the typical 26 weeks states provide to jobless workers. Many out- of- work Americans had used up their state unemployment aid and transitioned to PEUC.
About 9.2 million workers saw their PUA benefits expire Saturday, and roughly 4.8 million workers lost their PEUC benefits, according to Stettner.
Now that the aid has lapsed, those who were on PUA aren’t eligible for regular unemployment programs and will lose their benefits. Almost 4 million PEUC recipients could transition to extended benefits, which vary by state and last an additional 13 to 20 weeks. States will have to pick up half of the cost while their trust funds are depleted, Stettner says.
That means 10.5 million workers in total will have lost benefits by year’s end.
Workers lose a week of benefits
Even if the measure becomes law this week, there will be a temporary lapse in unemployment benefits until the first week of January, according to Evermore. Because the aid lapsed Saturday, the $ 300- a- week jobless supplement would last for 10 weeks instead of the 11 weeks originally in the package, unless Congress amends the bill, she says.
If an extension of the programs is signed into law, states would have to wait for the Labor Department to issue guidance before sending out payments.
The week ended Saturday is the last one that benefits can be paid since unemployment is paid out weekly, according to experts, unless the legislation becomes law.
Even if Trump signs the legislation this week, it will take two to three weeks on average for most state unemployment agencies to reprogram their computers, Evermore estimates.
“State agencies are freaking out,” Evermore says. “In theory, Congress could make this retroactive, but it will take states weeks before they get things up and running. Not only will people not get a check for next week, but the following few weeks will be delayed as well.”