For Cocoa, Florida, residents Christine Powell and
her fiance, Robert Hammond, the relentless downward economic drag of
the past six months has been suffocating.
First,
Hammond was put on medical leave in December after he broke his hand.
Then, just as the 49-year-old landscaper was about to return to his job, the pandemic hit. Hammond applied for unemployment insurance,
but he hasn't received a dime, and no one will answer his or Powell's repeated calls to Florida’s Department of Economic Opportunity.
“I
felt hopeless,” says Powell, 30, a mother of two who works as a
supportive living coach at a behavioral health agency. She, too, has suffered a wage cut since the start of the pandemic. Her hours were reduced to just 10 per week, with her income keeping her barely above the threshold to qualify for unemployment.
Without enough money to pay their bills, Powell
and Hammond have been forced to sell their flatscreen TVs, her laptop
and her children's Xbox. With no one at Florida's Department of Economic
Opportunity fielding their desperate calls, she finally had to make
a heart-wrenching decision: In May, she pawned her engagement ring.
“I was doing what had to be done to survive,” Powell said, adding that she's angry and frustrated with the unemployment system.
"Someone needs to accept the blame and it needs to be fixed,"
Powell said. "It’s not fair to me or the hundreds of thousands of other
Americans that are going through this.”
Gripped by one of the deepest recessions since the
1930s, state governments across the country are having to race to catch
up with escalating demand for unemployment assistance. Many lacked the
technology to deal with the massive wave of layoffs and furloughs,
experts say, creating two big issues for their computer systems.
First,
there was a surge in people filing for traditional unemployment claims.
Then, the CARES Act created a federally funded Pandemic Unemployment
Assistance program that allows furloughed, self-employed, independent
contractors, temporary workers and gig workers to seek benefits – people
who previously didn’t qualify under traditional unemployment.
With more Americans now eligible for unemployment,
states had to repurpose their computer systems on the fly, according to
Andrew Stettner, a fellow with The Century Foundation.
“It’s
created a level of confusion and frustration for a lot of people,”
Stettner says. “The challenges have been widespread among states. The
volume has been so high that people have struggled to get through.”
Thus
far, just 57% of unemployment applications have been paid, according to
The Century Foundation, a nonprofit think tank that analyzed the latest
available jobless claims and payments flows data from the Labor
Department and Treasury Department from March 1 to May 15.
Expanded
benefits have thrown a lifeline to many Americans. The CARES Act
provided an additional $600 per week to individuals collecting
unemployment, but that’s set to expire at the end of July if Congress
doesn’t pass new legislation. Democrats have proposed an extension,
either at the full or a reduced amount, while some Republicans argue the
extra money has encouraged many Americans to remain jobless.
Florida, Georgia lag other states
Washington,
Florida and Georgia are among the slowest to pay unemployment claims
–with only about a third of claimants receiving benefits, according to
The Century Foundation's calculations.
Officials from Washington did not dispute those conclusions. In fact, the state's own estimates
of paid unemployment claims are roughly equivalent. But Paige Landrum,
press secretary for Florida Department of Economic Opportunity,
pointed to the Sunshine State's website, which shows markedly different numbers.
The
state's dashboard shows that Florida received 2.96 million claims since
the beginning of the pandemic and has paid on 1.66 million of them – a
total of 56%. It also notes that Florida only deemed 1.7 million of the
claims to be eligible, and therefore, it believes it has paid on 97% of
eligible claims.
Asked for further comment, Landrum did not respond.
The state of Georgia, meanwhile, presented statistics showing it has processed more than 2.8 million claims since the outset of the pandemic, but has only paid out on 820,858, which amounts to less than 30%.
While Kersha Cartwright, director of
communications for the Georgia Department of Labor, acknowledges that
looks pretty bad on the surface, she says that’s only because of the
peculiar way in which Georgia has been processing claims since the start
of the pandemic.
Instead of allowing every
claimant to proceed from beginning to end, regardless of how much money
they earn or how long they've been working, Georgia makes claimants go
through the process in two phases. The first phase functions the way the
system has always functioned. If claimants have not worked for at least
five quarters (three-month periods) and have not made at least $1,134
in two of those five quarters, their claims will be rejected. Then, once
they’ve received that rejection, they can proceed to phase two and
apply for Pandemic Unemployment Assistance.
It’s
all the rejections in phase one that make it look like Georgia hasn't
been paying as many claims, Cartwright said. But that's not the case.
The bottom line, she said, is more than 90% of eligible applicants have
gotten their money.
Across the country, states
were initially slow in paying unemployment claims, but the pace of claim
payments has accelerated, according to Jay Shambaugh, an economist and
director of the Hamilton Project at the Brookings Institution.
In
June, there was a sizable jump in unemployment payments made by the
U.S. Treasury. They climbed to $115.7 billion last month, up from $93.7
billion in May and $48.4 billion in April. Those payments were just $3
billion in February before unemployment spiked in March.
“It’s clear that very early on during the
pandemic, lots of people weren’t getting paid,” Shambaugh says. “As
weeks have dragged on, more people have been getting their money. People
still facing delays should eventually be getting their benefits.”
No one will answer their calls
Gerald
Redding, 41, was one of those people who sought help from the
government. He lost his job as mechanic in Detroit, Michigan in early
March and still hasn’t received any money.
He
began the process of seeking unemployment and was fortunate to land
another job within a week. But two days before he was scheduled to
start, his new employer, Fontaine Modification, a truck modification
service, temporarily shut down its facility due to the pandemic.
Like
Powell in Florida, Redding couldn’t get anyone from the Michigan
Department of Labor And Economic Opportunity to answer his calls for
months and he couldn’t claim his weeks on the website.
“The
online system is in shambles. I keep getting booted off,” Redding says.
He's reached out to his governor’s office and state and local
representatives to no avail. “Hard working people are being put through
the wringer. We’re struggling and there are no answers.”
So
much time has passed that he eventually got called back to return to
his job in June, but his hours were reduced and he still qualifies for
PUA. He previously had been working between 40 to 82 hours per week. Now
the $300 he’s making working part time per week won’t cover all of his
bills or food for his family. In Michigan, unemployment maxes out at
$362 a week unless Congress approves new legislation extending the $600
extra benefit beyond July.
“I’m scared. I’m on the verge of losing it all. I
don’t know if I’m going to wake up in the dark, or if there will be an
eviction notice on my door,” Redding says. “My family is looking to me
as the provider. Sometimes I hide in the bathroom and cry.”
The
pandemic has exposed weaknesses in the public health and economic
systems, the pervasive extent of racial and social inequity, and
Americans’ low immunity to financial disruption, says Jamie Kalamarides,
president of group insurance at Prudential, raising the question of
whether financial resilience is truly possible.
“Blacks,
Hispanics, women, small business owners and other minorities have
suffered incredibly more than affluent white men during the pandemic,”
Kalamarides says. “Society is judged by how we treat those who are less
fortunate. We need to rebuild the path to the middle class.”
Some may have to change careers
Priscilla
Miranda of Rosemead, California, doesn’t know whether she’ll have a job
to return to once the theme park she works at reopens. The 30-year-old
started applying for unemployment in March when it shuttered its doors,
but she still hasn’t received any money.
Since then, she’s been forced to deplete the money from her savings account that’s running out soon.
“It’s
frustrating,” Miranda says. “I’ll have to start all over again once my
savings are gone. I’m not begging for money that’s not mine. Companies
have unemployment insurance for a reason. And it’s not being rightfully
paid out.”
She sent documents to verify her identity with
California's Employment Development Department but never heard back. No
one will answer her calls. Miranda also can’t log into the system online
because they still haven’t sent her an account number, she says.
Miranda,
who worked as a stage manager for live shows at a Southern California
theme park, doesn’t know whether theater performances will be the same
again after the pandemic due to social-distancing measures.
“It’s
scary. This isn’t a normal 9-to-5 job. I can’t just wear a mask. I
don’t know if I’ll ever do this job again,” says Miranda, who has worked
in theater since high school. “I don’t have a backup plan. This is all
I’ve ever known.”
COVID's financial toll
The
pandemic reversed nearly three years of financial wellness gains in the
U.S and 51% of Americans say their financial health has been negatively
impacted, according to Prudential’s Financial Wellness Census, a survey provided exclusively to USA TODAY. For many, the impact has been devastating.
About
26% of survey respondents had an income disruption including furlough,
reduced compensation or work hours. And nearly 1 in 5 saw their
household income fall by half or more in the months following the
outbreak, the data shows.
Of those with job
loss or income disruption, 17% also lost employer contributions to a
retirement plan, 14% lost health insurance and 10% lost group life
insurance – ripping away critical elements of their personal safety
net.
More than half of U.S. adults saw their
finances compromised, with people of color, women, younger people, small
business owners, gig workers and those employed in the retail industry
disproportionately impacted.
Alexis
Roldan, 20, is one of many Americans falling deeper into debt. A
college student, who lives in Orange County, California, had to ask her
family for money when she was furloughed in March from her part-time job
at retailer Aerie, an American Eagle brand that sells intimate apparel
and activewear.
“I'm already in student debt. I don't need to owe my family as well,” Roldan says. “I need this money to survive and eat.”
Roldan,
like Miranda, sent documents to verify her identity with the Employment
Development Department, but no one will pick up her calls either.
“It’s
an absolute nightmare,” Roldan says, who has since returned to work part-time as a merchandise lead at Aerie, but still hasn’t received any government benefits from while she was unemployed. “I’ve been told to be
patient. But patience doesn't pay my bills. It doesn't pay my rent.”
Gig workers face challenges, too
Rick
Suryk, 68, was one of the lucky ones. Suryk, who is retired, is a
driver for Uber and Lyft in Belleville, Illinois. He went 16 weeks
without getting an unemployment check but recently received $9,800 in
benefits from late March to June.
In March, he
was told to apply for traditional unemployment first and then get denied so he could qualify for Pandemic Unemployment Assistance. He was a gig worker and wouldn't qualify under typical unemployment, he said.
After
six weeks, he was denied and then applied for PUA. Another 10 weeks went by, and his online account said it was still “pending” for PUA. But
he couldn’t get anyone on the phone to help him.
“I wanted to rip my hair out!” Suryk says, who had to eventually go back and refile through traditional unemployment.
In
a twist of fate, the serpentine belt in his car broke and his
mechanic’s wife, who also worked for Uber and was dealing with her own
unemployment issues, gave Suryk a six-digit code that she used to get
ahold of a real person at the unemployment office.
Suryk
feels fortunate that he finally got a real person to talk to him and
help him receive his money, but he still has concerns about returning to
the road.
“It’s nerve-wracking. I still feel
at risk catching the coronavirus while driving,” Suryk says. “I could
be picking up someone coughing a few feet from me. I would be putting
myself in danger.”
Contributing: Michael Braga of USA TODAY