Tens of thousands of Maine families will be at risk of poverty, hunger and homelessness if an emergency federal supplement to jobless benefits is allowed to expire by the end of the month, labor advocates and workers said Friday.
Congress needs to act quickly to prevent further economic catastrophe, the advocates said in a press videoconference.
Since April, out-of-work Americans have qualified for an added $600-per-week benefit from the federal government. That benefit is set to expire in Maine at the end of this month.
Losing that assistance could increase economic suffering for Mainers who have so far been able to scrape by through the downturn triggered by the novel coronavirus pandemic.
“I’ve been searching for a job every day since I got laid off, and it has been difficult,” said Floyd Pope of Sanford. A single father of three, Pope was laid off from his factory job in March and has struggled to pay his bills and rent.
He wants desperately to get back to a job, but even if he did, Pope said, it is impossible to find child care right now. His weekly state unemployment benefit is just $146 before taxes, not including the $600 federal benefit, which is also taxed.
Maine Department of Labor spokeswoman Jessica Picard said if an individual opts to have their taxes withheld from their benefits, the department withholds 10 percent for federal taxes and 5 percent for state taxes.
“I am not sure what would happen if they took the $600 away from us,” Pope said. “I look at my kids and wonder what is going to happen to us next month.”
The U.S. House of Representatives in May passed the HEROES Act, which would extend added benefits through the beginning of next year. But the Senate has yet to act on the bill or a relief package of its own. Republican politicians, including U.S. Sen. Susan Collins, R-Maine, oppose allowing people to earn more from unemployment benefits than they did at their former job.
While laid-off workers are still struggling, the increased unemployment benefits have prevented the material deprivation associated with a sudden wave of joblessness, said Matt Schlobohm, executive director of the Maine AFL-CIO.
If the benefits expire, “thousands of workers will immediately land in poverty,” he said. “If it is allowed to lapse, the thermometer on human suffering will spike immediately.”
Even with businesses reopening and hiring employees, some workers say they have had a hard time finding work or cannot get adequate child care so they can re-enter the workforce.
Heather Finley, of Auburn, lost her job as a customer support representative four months ago. Her husband works two jobs, but had his hours cut. So far the couple and their 4-year-old daughter have been able to stay afloat because of extra unemployment assistance, Finlay said in a conference call arranged by the Maine AFL-CIO, Maine Center for Economic Policy and Maine People’s Alliance.
“Even with his two jobs and my unemployment, we are still living paycheck to paycheck – anything we are able to save we spend pretty quickly,” Finley said. “The $600 being taken away is really all I’ve been thinking about for the last month. I’m trying to make contingency plans – I have about 30 of them because I have no idea which way this is going to go.”
Cutting aid while the country is still in a crisis could have devastating effects on the local economy, too. Maine’s unemployment rate was 9 percent in May, though labor economists think the true rate could be double that after correcting for data errors. More than 87,000 Maine workers filed continuing unemployment claims last week.
Those workers are still able to pay at least part of their rent, buy groceries and essentials and keep up with bills, said James Myall, a policy analyst at the progressive Maine Center for Economic Policy. That could be threatened if the increased aid goes away, with a cascade effect on the state’s economy, he said.
“Unemployment compensation is one of the most effective forms of economic stimulus,” he said. “If Congress fails to act and we do not receive the support, the people of Maine will quite simply fall off an economic cliff.”
Some businesses say the added weekly payment creates an incentive for workers to stay on unemployment instead of returning to their jobs. An expanded program should help those in need, but not create conditions that allow people to avoid earning a paycheck, said Dana Connors, president of the Maine State Chamber of Commerce.
“I don’t want to come across (as saying) that there is no value to this,” Connors said about the added jobless benefit. “Whatever Congress does, I would hope that there was an alternative that doesn’t carry with it the disincentive to go back to work that we have seen.”
Unemployment insurance recipients that refuse to go back to work without a valid reason will lose their benefits, but there is scant evidence droves of workers are being thrown out of the system. Last month, the Maine labor department conducted 418 fact-finding interviews for workers that refused possible employment. The department would not provide an updated figure this week.
There are suggestions that Congress and the Trump administration would consider an added federal jobless benefit that would be capped at the level of previous income.
“There has to be something that increases the benefits that laid-off workers receive if we want to ensure human dignity, reduce suffering and poverty,” said Schlobohm, of the Maine AFL-CIO. “The question we should be asking is, why are we OK with pervasive low-wage work?”
Though Maine and the United States remain in an economic trough, there are some signs that economic activity is increasing. Consumer spending in Maine is about on par with the level in January, and job postings increased by more than 44 percent compared with the beginning of the year, according to an economic tracker developed by Harvard and Brown universities and the Bill and Melinda Gates Foundation.
The model, which uses data from private industry, shows that while spending on apparel and general merchandise is up in Maine, restaurant and hotel spending is still down 26 percent, and arts and entertainment spending is down 47 percent, since the beginning of the year. Job postings compared with January were down 10 percent to 30 percent in June.
Micki Whelan, who owns her own jewelry business in Biddeford, went on unemployment benefits for the first time ever after orders dried up in March. She is at high risk of severe health repercussions if she contracts COVID-19, and the added benefit has allowed her to stay healthy and safe, Whelan said.
“If I were up and running right now, I’d be going into a very, very busy season. I have no business going forward – my guess is that fall and the holiday season will be a bust,” Whelan said. “I am not sure what I am going to do. It is very likely that if the benefit is not continued I will have to go out of business, and I never thought this is how my career would end.”
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