American households desperate for more COVID-19 financial relief as US economic recovery hangs in the balance

 In Home News Section, Uncategorized

When Donald Trump tweeted that he was bailing on negotiations and delaying another round of pandemic stimulus payments until after the election, he struck fear in the hearts of many Americans.

For many who have been out of work since March, benefits are either starting to dry up or yet to arrive at all.

The United States is still 22 days away from Election Day and a winner may not be immediately apparent.

That’s a long time to wait when you have bills to pay and a long time for an economy that is hanging in the balance.

Patricia Namyalo, 38, has not worked her Capitol Hill restaurant job for seven months. Any delay in extra support is a “very big blow”.

“What I’m doing right now is basically trying my best to hold on to every single penny that I can,” she said.

“If he’s saying there’s no stimulus checks for you guys and there’s no money to be made at work either … what am I going to do?”

Ms Namyalo has long fought for a higher wage for hospitality workers and has clear ambition for her life.

Where she raises her eight-year-old daughter Leah is very important to her. For her: “Where you live determines who your child is going to be.”

In February, she cleared $US4,000 ($5,536) in debt and was excited to spend the year saving to buy a home. Then COVID-19 shut down the city.

Like so many, she is paying close attention to news on another stimulus package because she believes what happens right now will impact the position she is in for years to come.

An hour after Mr Trump tweeted he had instructed his team to walk away from negotiations with Democrat House Leader Nancy Pelosi a post appeared on social network Reddit.

The thread posted on the /unemployment subreddit was titled: “Remember. It will always get better.”

The post starts with a list of suicide helplines and the words: “I know how we are all feeling today, but it’s not worth it.”

Within 24 hours it was the top unemployment post on Reddit and had more than 600 comments, including this one:

“My sister has been unemployed for five months, she got unemployment from Florida for about three weeks at $US243 ($336) a week then they readjusted her benefits down to $US91 ($125) a week … She called us last week crying saying she doesn’t know how much longer she can hold on.

“She doesn’t know the stimulus isn’t going to happen. I’m scared to tell her.”

Ms Namyalo is on a deadline because her unemployment insurance will run out in December, but she has been feeling the slide for months.

And one of the things that matters most to her is now on the line.

Initially she was being paid her unemployment insurance as well as the $US600 ($830) a week pandemic payment, but when that ended in July her weekly payment dropped back to $US400 ($553) a week.

It runs out altogether in a few months’ time.

“I can tell you for sure that I live in a very nice neighbourhood but my lease is ending in March and I know I can’t stay here. And then you worry, where the heck am I going to stay?”

Recovery ‘still far from complete’

The initial move to pull out of the stimulus negotiations was seen as a bizarre political move by Mr Trump.

It caused distress at a household level, but also sent the stock market into reverse. All four indexes closed down after Mr Trump’s tweet caused a sell off in late trading.

There are a lot of reasons why right now is a fragile time in the US, and a delay to further pandemic relief only increases the risk to households and businesses, according to US Federal Reserve chair Jerome Powell.

Just hours before Mr Trump’s tweet, Mr Powell had said the expansion of the economy “was still far from complete”.

Mr Trump sent more than 60 tweets on October 6 and by 10:00pm he appeared to change tact, announcing he wanted to pass a standalone bill for stimulus cheques.

The Democrats want the Government to commit to a broad recovery package and have a proposal worth $US1.2 trillion ($1.6 trillion).

After his backflip last week, Mr Trump is now pushing for a deal worth even more than that.

But he is experiencing opposition from Republicans who say it is too expensive, and from Democrats because they consider it “reckless” and want more of the money set aside for unemployment insurance.

The political parties in Washington DC are a long way from each other in terms of negotiations, but they’re also a long way from the realities many Americans are facing.

‘They don’t have computers at home’

The unemployment crisis in the US is deep and problems with the welfare safety net are entrenched. It has left a lot of families in a very vulnerable position.

In April alone, more than 20 million Americans lost their jobs when the unemployment rate hit its COVID-19 peak at 14.7 per cent. That included people who were stood down, essentially losing their paid work, but not officially being let go.

In Australia, JobKeeper masked a lot of that pain and held the official unemployment rate to a COVID-19 peak of 7.5 per cent, but that moment didn’t come until July.

That number does not include people who were stood down and started receiving JobKeeper.

Low-income workers in industries like hospitality, retail and child care were first to lose their jobs when COVID-19 forced them to shut down and they’ll likely be the last to regain them — and not all will get that chance.

Senior policy associate at The Century Foundation Amanda Novello said the downturn and the shape of the recovery showed just how much the health of the US economy relied on low-income workers.

“We’ve severely undervalued or not valued at all the labour that we now understand is completely essential for the functioning of our economy,” she said.

The people earning the least are also likely to be black, Latino and female workers and many are unable to access unemployment benefits.

“I feel like crying when I really think about that, because it’s just so unfair, because there’s just so many Spanish[-speaking] people that just don’t know how to speak English,” Ms Namyalo said.

“They don’t have computers at home. They don’t have cable [television]. They don’t have the internet.”

Of the 53 million Americans who have made a claim for unemployment insurance, 44 per cent of those claims had not been processed at the end of August, according to independent think tank The Century Foundation.

The ageing technology and state-based systems that are meant to get people onto unemployment benefits and money into their pockets have not coped well with the influx of new applicants.

A confusing series of systems

As Australia went into lockdown, those who suddenly found themselves out of work lined up at Centrelink offices across the country.

Those sobering scenes jolted Australia towards the stark realisation the pandemic had arrived.

Then JobKeeper was announced and JobSeeker got a boost. By April millions of Australians had to navigate Centrelink for the first time.

Peter Whiteford from the Crawford School of Public Policy at the Australian National University said compared to the US, the Australian changes were “relatively efficient”.

“Even though we’re a federation with states and territories, the Commonwealth Government is responsible for everything,” he said.

In the US, the acronyms UI, PUA, PEUC, PPP and LWA represent just some of the available unemployment and pandemic benefits.

Unemployment insurance — or UI — is like JobSeeker in that it predates COVID-19, but it’s different in that it’s a contributory system.

Employees and employers pay into their unemployment insurance through their paycheques. If they lose their job, they’re able to file for benefits.

Also unlike JobSeeker, it is capped.

“The Australian system is much more generous to the poor than the US,” Professor Whitemore said.

And the systems have an opposite approach for determining how much money unemployed workers should get.

“The less money you currently have in Australia, the more money you get to a certain limit,” Professor Whitemore said.

“Whereas under a contributory system [as in the US], the more money you had in the past, the more you get now.”

In the US, stimulus cheques are cut by the Federal Government, but unemployment benefits are paid by the states, even if some of the money comes from federal funds.

That creates a very convoluted series of about 53 different welfare systems, all struggling under the weight of the mass job losses COVID-19 has brought.

In many states, the technology cannot support the number of applications rolling in, some applicants report being put on a default minimum payment without explanation and some in the District of Columbia report being asked to use Internet Explorer to access the online system.

‘Everything was just a nightmare’

The access problems alone have caused acute stress at a time of great instability.

Five weeks into reading “Q&A packets, legislation and regulation documents” Jill Raney, 36, messaged a friend working in a federal legislative position to ask if they were eligible for the pandemic unemployment assistance payment as a freelancer.

“And it turns out the answer to my question wasn’t available because nobody’s written the regulations yet because everything was just a nightmare and moving so fast,” they said.

Ms Raney was eventually paid the pandemic relief payment, but since that ended in July, they have been entitled to only $US179 ($247) a week.

“I experienced some suicidal ideation — it felt really hopeless being kind of adrift in the early days of an economic crisis,” Ms Raney said.

“There are just so many radiating out layers of not just uncertainty, but likely disasters.

“Reassurance that rent money will always be there just isn’t real life right now,” they said.

In American households, many stresses hang in the balance. Rent, food, education and bills that reflect a lifestyle once affordable are piling up and many are running out of time.

The country’s COVID-19 response, federal election and unemployment crisis are all inextricably linked.

“What economists have been saying all along is that a full recovery depends on getting the virus under control,” Ms Novello said.

Until then, as Ms Namyalo says: “everything is hanging in the balance.”

By Emily Clark in Washington DC (Original ABC Article)

ndh_ico