The $300 in federal supplemental unemployment benefits that were helping jobless people make ends meet during the pandemic — and all of the federal unemployment benefits available to gig workers and people who had exhausted their state benefits — ended a month early, on July 31. This is thanks to a deal made in the Legislature’s final hours that called for Gov. John Bel Edwards to cut off the benefits in exchange for a modest increase in the state’s exceptionally low maximum unemployment benefit. Supporters said cutting the aid would entice more people into the workforce, where many low-paid jobs are currently unfilled. But The Washington Post’s Heather Long and Andrew Van Dam report that the reality on the ground is quite different.
So far, early data suggests that cutting the benefits given to Americans who lost their jobs during the covid-19 pandemic has not led to a big pickup in hiring. The 20 states that reduced benefits in June had the same pace of hiring as the mostly Democrat-led states that kept the extra $300-a-week unemployment payments in place, according to state-level data from the Labor Department.
The AP’s Melinda Deslatte reports that 194,500 Louisianans are losing all their unemployment benefits due to the change, while another 47,000 people are getting their benefits cut by more than half.
Jan Moller, executive director of the left-leaning Louisiana Budget Project, which advocates for low- to moderate-income families, called the tradeoff with Republican lawmakers and business organizations “ugly politics that assumes people are lazy and unwilling to work.” He said Louisiana’s economy was hit harder because of its over-reliance on tourism and oil industry jobs. … The stripping of federal unemployment aid comes as Louisiana has one of the nation’s worst surges in coronavirus cases, fueled by the highly contagious delta variant and the state’s low rates of vaccination against the COVID-19 illness caused by the virus.
But late Friday night, a group of unemployed Louisiana residents filed suit in an attempt to block the move, arguing that it violates state law, and demanding the benefits be restored until their scheduled expiration on Sept. 6. The Advocate’s Blake Paterson reports:
The lawsuit asserts that Edwards’ decision violated state unemployment statutes, which compels state officials to secure available federal unemployment compensation for their jobless citizens. That argument mirrors those made in lawsuits lodged in several other states where federal payments were cut off early — including Indiana and Maryland. Judges there recently ordered the federal jobless benefits be reinstated.
A looming eviction crisis
Nearly 100,000 Louisiana households were behind on their rent last month – about three-fourths of them Black. Many of them owe months of overdue rent as a consequence of illness, job loss and other setbacks caused by the Covid-19 pandemic. Now many of these renters are at risk of being evicted, as a federal moratorium in place since last fall expired over the weekend. As Nola.com | The Advocate’s John Simerman reports, Louisiana (along with other states) has been excruciatingly slow to distribute the federal rental aid that’s supposed to help keep these families in their homes:
At Southeast Louisiana Legal Services, which represents low-income tenants in several eviction courts across the region, staff attorney Hannah Adams said some landlords have indicated they’ll move forward with evictions if rental aid payments aren’t in hand. “I’m very concerned that with the delta variant, things are blowing up again, and all of the protections are ending,” she said. “I’m just worried it’s going to be a huge disaster.” Adams said a wave of evictions may be a bit less imminent in Orleans Parish, where a backlog will delay hearings on new eviction filings for perhaps a few months.
Federal aid cuts poverty in half
As federal unemployment aid expires along with protections for renters, new data shows how effective the government’s response to Covid-19 has been in reducing poverty. The unprecedented levels of federal aid – through stimulus checks, expanded food assistance and a broad expansion of the child tax credit – has cut the number of Americans living in poverty nearly in half. The New York Times’ Jason DeParle reports that the biggest drop has occurred among children, but warns that these historic gains might be short-lived.
The finding — that poverty plunged amid hard times at huge fiscal costs — comes at a moment of sharp debate about the future of the safety net. The Biden administration has started making monthly payments to most families with children through an expansion of the child tax credit. Democrats want to make the yearlong effort permanent, which would reduce child poverty on a continuing basis by giving their families an income guarantee. Progressives said the new numbers vindicated their contention that poverty levels reflected political choices and government programs could reduce economic need.
The Time Tax
Navigating government benefit programs is typically time-consuming, unnecessarily difficult and fraught with the potential for costly mistakes. Annie Lowrey, in an essay for The Atlantic, describes these paperwork hassles as a “time tax” – one that takes a particular toll on people with low incomes and that rarely gets much attention from policymakers. In many cases, the difficulty of accessing benefits is a deliberate attempt to discourage people from getting the services they need.
The Biden administration is expanding the welfare state, through the new child tax credit and other initiatives. Congressional Democrats are crafting a new New Deal. But little attention is being paid to making things work, rather than making them exist. And very little attention is being paid to making things work for the neediest—people short on time, money, and mental bandwidth.
Number of the Day
5.6% – Projected child poverty rate in America this year, after government aid is taken into account – down from 14.2% before the pandemic. The 61% drop exceeds declines in poverty over the past 50 years combined. (Source: Urban Institute via The New York Times)