COVID-19 unemployment help ending as Congress, Trump dawdle

Laveta Brigham

Unemployment insurance for self-employed people has been a lifesaver for Lis McKinley, not just for her finances but – at 61 – also for her health. McKinley owns and runs Let’s Make Room, which helps people reorganize and move their homes. Because of the unemployment insurance, McKinley said she has […]

Unemployment insurance for self-employed people has been a lifesaver for Lis McKinley, not just for her finances but – at 61 – also for her health.

McKinley owns and runs Let’s Make Room, which helps people reorganize and move their homes. Because of the unemployment insurance, McKinley said she has been able to turn down most requests that involve face-to-face interactions with a client.

“It’s a risk I’m not willing to take, and it’s a risk I couldn’t even justify under the current situation,” said McKinley, who lives in Oakland.

McKinley has kept her business going by using Zoom to help her clients declutter their homes. She has lost 75% of her income, she said, but unemployment insurance has softened the blows.

Yet, absent any action from Congress and President Donald Trump, by the end of the year about 583,000 people like McKinley in California stand to lose Pandemic Unemployment Assistance payments, according to the nonpartisan California Policy Lab. Congress created the program in March to provide benefits to independent contractors, business owners and others who traditionally don’t qualify for coverage.

Another 166,000 would lose benefits they receive under the Pandemic Emergency Unemployment Compensation program, which adds 13 weeks of benefits for those who have exhausted their regular unemployment payments.

Losing those programs will mean an estimated $173 million less federally-funded benefits coming into the state each week, the policy lab found. Losing the funding “will have a devastating effect on workers and their families,” said Till von Wachter, the lab’s faculty director.

Congress left for a Thanksgiving break without any progress on keeping the programs going.

Meanwhile, people like McKinley are wondering how they can plan their financial future without help from the federal government.

“I’ve been having dreams about this,” McKinley said. “It has been wacky, but I’m trying to figure out what I’m going to do.”

“We don’t have work to go back to”

Julian Douglas has worked as a travel convention speaker and a concert promoter for years in Southern California. But the pandemic has shut down both of his jobs.

He has been putting bills on his credit card, but he’s also worried about losing his business for good. After all, he still has to pay for all the business licenses and other expenses, despite getting no income for more than half a year.

“I’m worried that longer it goes on, my brand is going to dissolve,” Douglas said.

Douglas said he would like to see the state allow more concerts — unlikely as the coronavirus numbers keep rising. Absent the state’s action, he said he and others in the entertainment industry need the unemployment insurance to stay afloat.

“People in the entertainment industry, we don’t have work to go back to,” he said.

Kristine Carey, a business coach in San Francisco, said she lost 55% of her income during the pandemic, just after spending a year building a new website and re-branding her business. Getting the unemployment insurance of about $300 a week has helped her stabilize her life, she said.

“It feels more like a lifeline, hope, we’re not going to let you drown kind of a thing,” Carey said of the unemployment insurance.

She said she has been able to use the unemployment insurance to help her transition away from face-to-face interactions with her clients. Instead, she’s preparing courses for her clients to take.

“The money I’ve been getting from (the state) has been helping me figure out a different way to run my business,” Carey said.

Erica Mighetto, an Uber and Lyft driver based in Sacramento and an organizer with Rideshare Drivers United, has been relying on the regular unemployment insurance. Because California considers Uber and Lyft drivers employees, at least until Proposition 22 officially becomes law in a few weeks, some workers have gotten the regular unemployment insurance.

Still, more Uber and Lyft drivers have been relying on PUA than on the regular unemployment insurance. Mighetto worries that those receiving the PUA assistance will have to go back to work once the money runs out. Too many people driving means less work and pay for each individual, she said.

“For drivers out there working, there’s not going to be any work for anybody.”

Negotiation bogged down

Most of the high-level dialogue over a compromise in Congress bogs down in familiar partisan talking points.

Still pending is a multi-trillion Democratic package that passed the House earlier this year that would extend the programs, but it’s still going nowhere in the Republican-controlled Senate.

On the last day before leaving Washington for the Thanksgiving break, Senate Majority Leader Mitch McConnell, R-Ky., told colleagues in a floor speech, “The problem is that their proposal is a multi-trillion laughingstock that never had a chance of becoming law.”

Senate Democratic Leader Chuck Schumer, D-N.Y., fired back: “These are not someone’s whim. These are the desperate needs of people crying out for help,” he said.

Supporters of a big aid package are up against some powerful forces.

“There’s this puzzling history in the United States that people tend to blame those who are on unemployment for not having jobs,” said Michael Graetz, a Columbia Law School professor and author of The Wolf at the Door: The Menace of Economic Insecurity and How to Fight It.

“It’s stunning that it’s so difficult to change the narrative,” he said.

Another obstacle is that Democrats have been intent on including programs that many Republicans don’t want in an economic relief package, notably aid to state and local governments.

Senate Republicans this fall offered a $500 billion package that would provide an extra $300 a week to unemployment claimants through the end of the year. The bill’s focus was largely on helping small businesses.

“The Republican bill doesn’t bail out states that have been mismanaged way before anyone had ever heard of coronavirus,” said Sen. John Barrasso, R-Wyoming.

Senate Republicans have been reluctant to consider another big package, saying they want to see how the money is spent. They also note that the unemployment rate, which peaked at 14.7% in April, dropped to 6.9% last month.

Economists counter that the October figure is still historically high, the same as the rate seven years ago. In California, more than 3.3 million people, or about 17% of the workforce, were still getting benefits in mid-October.

Overall, while “It’s not like a guaranteed recession if these programs expire, this tells a tale of two economies,” said Douglas Holtz-Eakin, president of the center-right American Action Forum.

Unemployment is down, and higher-skilled workers can find employment.

But “for lower skilled workers, this is an apocalypse,” Holtz-Eakin said.

Jeong Park joined The Sacramento Bee’s Capitol Bureau in 2020 as part of the paper’s community-funded Equity Lab. He covers economic inequality, focusing on how the state’s policies affect working people. Before joining the Bee, he worked as a reporter covering cities for the Orange County Register.

David Lightman is McClatchy’s chief congressional correspondent. He’s been writing, editing and teaching for 49 years, with stops in Hagerstown, Riverside, Calif., Annapolis, Baltimore and since 1981, Washington.

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