Andrew Washington, 64, is not used to relying on others. He’s worked for more than three decades as a data analyst and was an auditor for SEPTA before he was laid off in April because of the coronavirus pandemic.
His unemployment payments have arrived sporadically, and he doesn’t want to ask his family and friends for help. He was counting on the $600 in federal pandemic unemployment compensation to pay his mortgage, car insurance, credit cards, and late bills.
“I’m now pulling my hair out. I haven’t been able to sleep. I can’t eat. I can’t think,” the Wynnefield Heights man said. ”You’re just worried about your situation."
The $600 per week that kept many jobless Americans afloat officially expired Friday. With the Trump administration and Congress deadlocked over whether to extend it, untold millions of Americans may be at risk of falling behind on bills, going hungry, even losing their homes.
The already struggling economy faces even more peril without the pandemic payments, experts warn. Companies continue to lay off workers at high levels. With the loss of income likely to slow consumer spending, more layoffs are likely.
“These folks are very hard-pressed and if they don’t get help, if they don’t think the government’s got their back, they’re gonna go into panic mode,” said Mark Zandi, the chief economist at Moody’s. “Even people who are employed, who think they might lose their job, will go into panic mode because they’re fearful they won’t get help” should they need it.
Congressional Democrats want to extend the full $600 enhanced unemployment benefit, while Republicans argue that amount is too much, noting some have earned more on unemployment than they did on the job. President Donald Trump has signaled that he supports a temporary extension of the $600 benefit, undercutting his GOP allies, according to the Associated Press.
The end of the Federal Pandemic Unemployment Compensation could affect hundreds of thousands of people in Pennsylvania and New Jersey who received billions of dollars in aid from the program.
About 795,000 New Jersey workers were receiving the extra $600 in federal help as of July 11, according to the state Department of Labor and Workforce Development. The Pennsylvania Department of Labor & Industry said last week that it can’t provide an exact number of recipients, but said the majority of the 3.3 million people who applied for unemployment assistance may have been eligible for the $600 payments.
Since mid-March, Pennsylvania has distributed $14.5 billion under the program, while New Jersey paid out more than $7.5 billion in the federal benefit as of last week. State unemployment insurance will continue, but it is far less than the federal benefit.
Although the federal program expired Friday, both state agencies said workers who are owed unemployment benefits for previous weeks will still get the extra $600 for those weeks, too.
More than 200 Pennsylvania workers registered for a virtual rally last week demanding an extension of pandemic relief. Cecily Harwitt, an organizing director at One PA, a statewide racial and economic justice advocacy group, said it’s rare to see Pennsylvanians from cities, suburbs, and rural areas organize together. But those who signed up to attend were from more than 35 counties across the state.
“That is very telling how universal this problem is,” Harwitt said. “Philadelphia had an eviction crisis even before the pandemic hit. I am thinking about how many more evictions we will be looking at if the $600 are cut.”
The expiration of the unemployment help, created by Congress in March as part of a $2.2 trillion coronavirus rescue package, came a day after the federal government reported that the U.S. economy shrank at a record-breaking 32.9% annual rate from April through June.
Meanwhile, another 1.4 million Americans filed new claims for unemployment last week, including 35,000 in Pennsylvania and 27,000 in New Jersey. It was the second straight week that the number of new unemployment claims increased.
The ripple effect of completely cutting off the extra unemployment aid could cost the economy 1.1 million jobs by year’s end, Zandi said, while slashing the weekly benefit to $200 would still cost nearly 1 million jobs.
“[Unemployment insurance] beneficiaries spend every penny of the support very quickly on necessities that generate other economic activity and jobs,” he said.
Observers expect elected officials to ultimately extend some level of extra unemployment aid. In addition to harming consumers and the economy, failure to act likely has political consequences with the November elections not far away. But allowing the lapse may already have caused damage.
“When you combine the surge in the virus with the stupidity in Washington and the massive divisions in the nation, it is hard to be optimistic about the economy achieving a sustained, rapid recovery,” Joel Naroff, president of Naroff Economics in Bucks County, wrote on his blog Friday.
Without the pandemic relief, Sandra Wade worries she may have to risk her health.
Wade, 53, is a breast cancer survivor, a fact that could put her at greater risk from the virus. And she can’t work at home, safely distanced from others. She is a model, actress, and filmmaker, and founder of the company On Demand Models, for models over 35.
“You know how it is in the gig economy, everything just started to shut down for me,” she said of her work options as the coronavirus spread in Philadelphia.
“I was really worried about losing my home,” she said. “The extra $600 allowed me to keep my home and still get my bills paid.”