As safety net disappears, out-of-work Mainers plead for more help

Federal aid for unemployed Mainers ends this week with nothing to replace it, leaving tens of thousands of out-of-work Mainers wondering what happens next.

Since April, unemployed Mainers have received an extra $600 per week to compensate for the jobs lost as businesses shuttered to limit the spread of COVID-19. Those benefits officially end Friday and so far Congress has not agreed on a system to replace them.

Senate Republicans released a plan Monday that would cut the weekly benefit to $200 per week while states work on a complicated system that would replace 70 percent of people’s wages.

That proposal conflicts with the HEROEs Act the House passed in May that would extend the full $600 per week through the beginning of next year. Business groups say the extra benefits are too generous and continuing them creates a disincentive to work.

Workers advocates warn of deep economic pain if the benefits expire completely.

“These benefits are so critical to tens of thousands of Mainers, if you just let it go away you are going to see a humanitarian crisis,” said Andy O’Brien, spokesman for Maine AFL-CIO.

“People who think the economy is doing fine and you can just go out and find a job, I don’t think they are living in reality,” he added. Letting added benefits expire “is cutting the lifeline right in the middle of a crisis, to me it is morally reprehensible,” he said.

SECURITY IN UNCERTAIN TIMES

Jennifer Frost said the extra money gave her a measure of security in highly uncertain times. Frost is a private mental health counselor at Monmouth schools, but has been out of the office since it closed in March. She meets clients online, but is down from four days a week to one and a half.

On good weeks for her practice – those when she makes more than $300 – Frost doesn’t qualify for unemployment. That’s when the extra money really helps.

“It’s huge, it carries me through the weeks I don’t qualify,” she said.

Her husband is a striking worker at Bath Iron Works, and Frost doesn’t know when she can return to school and counsel in person. She received a Paycheck Protection Loan for her business, but the money is gone.

Continuing the $600 benefit would ease workers’ anxiety and help the country while it tries to keep the pandemic in check, Frost said.

“If they say the virus is going to continue, I feel like it makes logical sense that this is going to continue,” she said. “Keep it going until we have some stability.”

Business groups and some employers have complained for months that the added $600 per week was more than some workers made at their old jobs.

Dan Drouin said his business, Stockhouse Restaurant and Sports Pub in Westbrook, survived this summer with takeout. He expanded its outdoor seating area when it was allowed to reopen in June.

The restaurant is surviving, but more growth is limited because he can’t find enough workers to keep the kitchen humming, Drouin said. He’s advertising for about eight full- and part-time positions with an hourly wage of $15-$18.

“I don’t know if I grow much more to bring my business back up without hiring,” Drouin said. “Right now it is not about how much space we have or don’t have. It is about not having the bodies to do the production.”

Allowing the added benefits to lapse for a period might help get more people off unemployment and back to work, Drouin added.

“If we don’t take a break from the $600 per week, how do we get people back out to apply for jobs?” Drouin said. “Even if it only has to end for a certain amount of time, until we figure out what the workforce looks like.”

The National Federation of Independent Business strongly opposes continuing enhanced benefits in their current form beyond the end of July, a spokeswoman said.

BUSINESS GROUPS SEE DISINCENTIVE

Instead, the business group wants a scheme that would prohibit unemployment benefits from exceeding someone’s prior wages. About 18 percent of small business owners have had an employee decline a job offer because they wanted to stay on unemployment insurance, according to a recent member survey.

Thousands more jobs were posted on the Maine JobLink last month than a year previous, according to the Maine Department of Labor. In June, almost 7,400 jobs were posted on the site, compared to just over 5,300 in June 2019.

Comfort Keepers Maine, a home care agency for the elderly in Scarborough, has struggled to fill 30 jobs – about 18 percent of its workforce. Owner Peter Violette said employees concerned about their health and safety left the company in the early days of the pandemic.

Violette said he’s been able to hire about five new people for entry-level jobs that pay around $15 an hour. Every week he has to turn away new clients because he does not have enough staff, Violette said.

“It is very telling that jobs are available, but we just don’t have the people to fill those jobs,” Violette added. “I think the added benefit is causing people to sit on the sidelines, in some cases that has been the end result.”

That narrative is unconvincing for James Myall, a policy analyst with the progressive Maine Center for Economic Policy.

“I’m still not seeing large scale evidence of that happening,” Myall said.

Maine’s unemployment rate was below 7 percent in June, but may be more than 12 percent because of data collection errors.

DAYCARE AN ISSUE FOR MANY WORKERS

Some workers collecting jobless benefits are genuinely waiting to be recalled to their old jobs, Myall said. Others may have a hard time finding adequate childcare or have health problems that don’t want to put themselves in harms way.

“I think the unemployment numbers make it seem like there should be loads of people applying for jobs, but those numbers are a little trickier,” Myall said.

For most people, unemployment benefits are the primary source of income, and losing it could have a cascade effect on the state’s economy, he added. About $844 million in enhanced unemployment benefits have were paid out in Maine as of July 18, money spent on rent, groceries, utilities and services, Myall said.

“Ultimately, as a business proposal it could backfire, it could stress the economy and lead to more unemployment,” he said.

Heather Finley finds it insulting that some people believe she is relaxing at home instead of going back to work. She lost her job in customer support this spring and the extra unemployment money has helped her make ends meet after her husband’s hours were cut at his job.

“It drives me nuts to have people say, ‘You’re getting all this extra money,'” Finley said. “I was ripped out of a job I loved that was paying my bills. I didn’t ask for any of this and I don’t feel I’m being treated better because it is happening to me.”

Finley said she wants to go back to work and has a lead on a job. But the cheapest daycare she can find for her 5-year-old daughter is $189 a week – Finley’s state unemployment is about $300 a week – and closes at 5 p.m., half an hour before she could leave her job and pick up her child.

“I have to get my daughter back into daycare to get back to work, but I have to pay for daycare and I can’t do that if I don’t have a job,” she said.

Converting added unemployment benefits to a percentage of lost wages would present an administrative challenge for unemployment bureaus across the country already straining to meet historic levels of joblessness.

Modifying the flat weekly amount would be a simple fix that could take a week to implement, said Maine Department of Labor spokeswoman Jessica Picard.

DIFFICULT TO INDIVIDUALIZE BENEFITS

Individualizing the payments would be a complex and lengthy process, she added. The department collects aggregated wage data from employers, not individual wage information, Picard said. Additionally, it would be difficult to pinpoint earnings for self-employed and contract workers now collecting federal unemployment benefits through the state.

Programming “could take months after we get the federal guidance, and we would need to get individual wage information from claimants and employers, the latter often no longer having any current employment relationship with the claimant,” Picard said.

Competing legislative proposals set up a contest with Republican senators and the White House on one side and the Democratic-controlled House on the other.

Rep. Chellie Pingree, D-Maine, supports extending the $600 per week benefit and believes ending it could force Mainers back into workplaces where they could catch COVID-19 and worsen the impact on the state’s economy.

“It’s disappointing that Senate Republicans would prefer to put working families on the brink of financial collapse rather than give these households and our overall economy a jolt,” Pingree spokeswoman Victoria Bonney said.

In a statement, Sen. Angus King, an independent, said the added benefit was a lifeline for Maine people and aid should be extended in a meaningful, substantial way.

“I oppose the Senate Majority’s proposal to drastically cut these benefits to only $200 – which is far too small of a response to meet this moment – and oppose any plan which would create an impossible logistical burden for the state Department of Labor and block Maine people in need from accessing these funds,” King said.

Sen. Susan Collins, R-Maine, in a statement, said that the unemployment boost was necessary to help people who lost their jobs through no fault of their own, but supplemental benefits should compensate people in a way that does not give them disincentives to return to work.

“Under the current system, some workers are receiving more in benefits than they previously earned in wages,” Collins said. Another round of targeted stimulus checks also would help people, she said.

“Since states have to know a laid-off employee’s former wages in order to calculate his or her benefits, it seems to me that states should be able to provide either full wage replacement or something close to it with federal supplemental benefits,” Collins said.

Rep. Jared Golden, D-2nd District, urged his colleagues to reach a deal that doesn’t leave workers without support.

“Congressional leaders should be focused on coming together and striking a deal to avert a lapse in unemployment benefits,” Golden said in a statment emailed Monday night. “Thousands of out-of-work Mainers are still struggling, and we can’t allow the rug to be pulled out from under them in the middle of a recession.”