September 23, 2020

Without $600 Weekly Benefit, Unemployed Face Bleak Choices

As a result, families are being forced to make decisions with lasting consequences.

When Jason Depretis and his fiancée lost their Florida restaurant jobs in early March, they started falling behind on their rent and their car payment. The $600 unemployment supplement was a lifeline, allowing them to hold on to their home and their car. But on July 28, that lifeline snapped: The repo man showed up for the car on the day that their landlord delivered a three-day notice of eviction.

With the extra $600 a week, Mr. Depretis, 42, would probably have been able to pay enough to hold off both creditors. Without it, he had to choose. He paid his landlord $650 to stave off eviction, and watched the car be towed away.

But it was a terrible time to lose the car. He had found a job starting in September at a restaurant, but it is 45 minutes away, and there is no bus service that corresponds with his hours. The closest food bank is 30 minutes away, and he can’t get there without a vehicle. He said he didn’t know how he and his fiancée would put food on the table for themselves and their two children.

“Without the $600, there’s absolutely no way that my family’s going to make it,” he said.

For families like Mr. Depretis’s, even a temporary loss of income can be the start of a downward spiral, said Elizabeth Ananat, a Barnard College economist who has been studying the pandemic’s impact on low-wage workers. Wealthier families may be able to draw on savings to get through until Congress reaches a deal. But for lower-income households, even a temporary lapse in benefits can have lasting consequences. An eviction can make it hard to rent in the future. Having a car repossessed can make it hard to find another job. And for children, periods of hunger, homelessness and stress can have long-term effects on development and learning.

“Children cannot smooth their eating over the year,” Ms. Ananat said. “Families that do not have access to credit cannot smooth their food, their electricity, any of their necessities.”

Many Republicans argue that the extra benefits were keeping recipients from looking for work, especially because many were getting more on unemployment than they had made on the job. Business owners have complained that they are struggling to fill positions.

But several studies have found no evidence that the supplement was discouraging job hunting, and many workers appear to be accepting jobs even when the pay is less than their unemployment benefits. And by injecting billions of dollars into the economy each week, the benefits almost certainly prevented even more layoffs.

Article source: https://www.nytimes.com/2020/08/08/business/economy/lost-unemployment-benefits.html

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