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A bleak outlook for millions facing cutoff of US jobless aid

A bleak outlook for millions facing cutoff of US jobless aid

An employee of Justin's BBQ closes up for the night in Newark, New Jersey, Nov 12, 2020. (File photo: AP/Seth Wenig)

INDIANAPOLIS, Indiana: Tina Morton recently faced a choice: Pay bills - or buy a birthday gift for a child? Derrisa Green is falling further behind on rent. Sylvia Soliz has had her electricity cut off.

Unemployment has forced aching decisions on millions of Americans and their families in the face of a rampaging viral pandemic that has closed shops and restaurants, paralysed travel and left millions jobless for months.

Now, their predicaments stand to grow bleaker yet if Congress fails to extend two unemployment programmes that are set to expire the day after Christmas.

If no agreement is reached in negotiations taking place on Capitol Hill, more than 9 million people will lose federal jobless aid that averages about US$320 a week and that typically serves as their only source of income.

READ: Biden pledges help 'on the way' for US economy

Green, 39, and her husband are among them. An end to their unemployment benefits would force them to keep missing rent payments on their home in Dyer, Indiana, near Chicago.

The couple have eight children. Green's husband is a self-employed truck driver whose business disappeared when the pandemic erupted in the spring. Only in October did he start to pick up occasional work.

He now receives about US$235 a week in unemployment aid. Even so, "all of our bills are late", Green said. They have received several shutoff notices from utilities before managing to pay just before service was to be cut off.

"That's really scary," Green said, "because what are we going to do when we lose the unemployment money?"

The end of jobless aid is approaching at an especially perilous time. Job growth slowed sharply in November, and the resurgence of viral cases appears to be out of control across the country.

Even with the prospect of an effective vaccine being widely distributed in coming months, economists say the picture will worsen before it improves. Many foresee a net loss of jobs in December for the first time since April.

People line up during a food distribution event by Food Rescue US, Nov 30, 2020, at Rosie's at Copper Door B&B in the Overtown neighborhood of Miami. (Photo: AP/Wilfredo Lee)

On Friday, President-elect Joe Biden called on Congress to quickly approve a bipartisan US$908 billion package that would establish a US$300-a-week jobless benefit as well as send aid to states and localities, help schools and universities, revive subsidies for businesses and support transit systems and airlines. Details are still being worked out, but the outlines of a final Bill could emerge soon.

More than 20 million people are now receiving unemployment benefits. More than half are beneficiaries of two programmes that were part of rescue aid legislation Congress enacted in March.

One programme made self-employed and contract workers eligible for jobless aid for the first time and provided 39 weeks of support. The other programme supplied 13 weeks of extended benefits to the 26 weeks that most states provide.

About 9.1 million who are receiving aid from those programs will be cut off on Dec 26, according to a report from the Century Foundation. An additional 4.4 million are expected to exhaust all 39 weeks by year's end. If Congress agrees to provide more weeks of aid and to revive both programs, those beneficiaries could keep receiving aid next year.

That would be a life-saver for Sylvia Soliz who lives in Corpus Christi, Texas. Soliz, 36, who still owes part of her rent for November and December, has received an eviction notice. She has also just had her electricity cut off.

Back in March, Soliz was laid off from her job as a nurse's assistant at a senior living facility. She is now receiving US$414 in jobless aid every two weeks. With four children, it does not go very far.

"The day I get it, it's already gone because my kids need so many things," Soliz said. "Of course, I have to pay a portion to whatever bill I have, so that way I can stretch it out. But every time another check comes in, it's another bill."

People who lost their jobs wait in line to file for unemployment benefits at an Arkansas Workforce Centre in Fayetteville, Arkansas. (File photo: REUTERS/Nick Oxford)

Soliz is applying for a new job, and she checks in with her old employer. So far, no luck. She also worries about contracting COVID-19. Soliz is hopeful that Congress will agree to provide more aid, but she feels "they are basically gambling with us".

A cutoff of jobless benefits now, with so many millions of Americans still receiving the aid, would be unusually early compared with previous recessions.

In the aftermath of the Great Recession of 2008 to 2009, the government extended unemployment benefits to 99 weeks, and the additional aid lasted through 2013. When that programme ended, about 1.3 million people lost benefits - a small fraction of the number who would lose jobless aid this time.

Other government protections will also expire at the end of this year, including a federal moratorium on evictions for renters. A suspension of payments on federal student loans will expire at the end of January.

"I am very afraid of people facing homelessness - that's our top concern," said Andrew Stettner, a senior fellow at the Century Foundation. "It's a terrible unforced policy error to make. It will slow the recovery that we're having by cutting off these benefits so early."

About one in six renters in the United States are behind on their rent, according to a survey from the Census Bureau. And 12 per cent of adults say their families did not have enough to eat at some point in the past week, the survey found. That is up from just 3.7 per cent in 2019, according to the left-leaning Center on Budget and Policy Priorities.

A wrenching set of choices has confronted Keli Paaske, who lives in the Kansas City area. Since being furloughed in the spring from her sales job at a company that makes fire doors, Paaske, 56, has cut back her grocery budget.

Keli Paaske stands outside her home in Olathe, Kansas, Dec 4, 2020. (Photo: AP/Charlie Riedel)

She thought she would be called back once the virus waned. But when her boss phoned in August, it was with a different message: Her job had been eliminated.

Paaske had hesitated to spend US$360 needed to euthanise her 15-year old dog, who had a brain tumour, before going through with it. Without unemployment aid, Paaske is not sure how she would manage. She may seek financial help from her parents, who are in their 80s, something she has resisted doing. If she does not find a job by March, she said, she will stop leasing her car.

Across the country, a cutoff of jobless aid would disproportionately affect black Americans, according to data from the Century Foundation. About 18 per cent of unemployment aid recipients are black, the Foundation said, though black Americans make up just 12 per cent of the workforce. More than 57 per cent of recipients are white. Nearly 13 per cent are Latino. (There is no demographic data on about one-fifth of recipients.)

Tina Morton used to clean houses near where she lives in Winchester, Kentucky. But there has been little work since the pandemic struck. Like many other single mothers, she has struggled with the need to find another job while simultaneously caring for children - a son and two nephews she has custody of - who are attending school online at home.

"Single parents cannot go out here and ... just find any job," said Morton, 39. "We've got our kids here that are stuck at home."

Last week, Morton had to choose between paying a phone bill and buying one of her nephews a birthday present. (She got him a present.) If her jobless aid ends, she expects to face painful decisions.

She is particularly worried about her two nephews.

"That's what hurts me the most," she said. "My job is to give them more - give them better than where they came from."

Source: AP/dv

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