As unemployment benefits end, Californians find themselves dipping into savings, retirement
Elena Temples applied for some 150 jobs in the last six months, after her company outsourced her job as a project manager.
She started applying for jobs that pay half her old salary. She applied for jobs that she used to supervise over. She wasn’t able to get any calls back.
“I have everything to show I’ve been working my booty off,” she said. “I want to work.”
Now, with extended unemployment insurance — including a $300 weekly federal boost — ending for her in a matter of days, she wonders how much of her savings she will have to drain to stay afloat.
“I just want to find a decent job where I can stay in my house and not file bankruptcy and start all over again,” she said. “Who wants to do that?”
Congress and former President Donald Trump last year authorized an unprecedented expansion of unemployment progress that they intended to help people weather economic fallout from the coronavirus pandemic.
For the first time in history, gig workers and self-employed people received unemployment benefits. For the first time since the Great Recession, workers could collect unemployment well beyond 26 weeks usually afforded.
But with those programs now ending for 2 million Californians on Saturday, workers are pondering their next steps. Neither the federal government nor the state is stepping in to continue many of the pandemic unemployment benefits.
Employers hope the end to the unemployment benefits will prompt many Californians to reenter the job market. Rideshare and delivery companies are counting on drivers to return, lowering the prices of rides and orders.
But in some cases, people might not be ready to go back to work, or they’ll want to wait for the right job.
“People may be saying, I got this break... How do I want my life to look? I’m really going to think about career opportunities,” said Amanda Blackwood, president and CEO of the Sacramento Metropolitan Chamber of Commerce.
Research from states that cut off benefits this summer found that affected households cut their weekly spending by about 20%.
“There is evidence that the reduced (unemployment insurance) benefits increased self-reported hardship in paying for regular expenses,” wrote Arindrajit Dube, a professor of economics at the University of Massachusetts, in a July study of early cutoff states.
In California, such studies suggest that the state “is unlikely to experience a large hiring boom, but likely that households will find themselves cutting back on their usual weekly expenses,” the California Policy Lab said last week.
Rideshare drivers
A doctor told Matthew Jones not to drive for Uber and Lyft because of the pandemic.
But Jones, who is vaccinated but immunocompromised, may have no choice when unemployment insurance for self-employed and gig workers runs out in California and across the nation.
“It can be a death sentence for me to get in a car with a passenger, some of whom, from what I’ve heard, are very reluctant to put on a mask or refuse to put on a mask,” said Jones. “I would be left out in no man’s land at the beginning of September.”
Jones, 49 from Mission Viejo, said he has been disabled since 2010. He started driving part-time for rideshare companies in 2016, saying he liked the flexibility they gave.
His wife is a nurse. Jones said he was bringing $10,000 to $12,000 a year from his rideshare job. That money has helped his family build up savings and retirement, he said.
He stopped driving in February 2020 as the pandemic began to spread. Then, when the federal government in March 2020 created Pandemic Unemployment Assistance for gig workers like him, he jumped right in. He’s now getting $467 a week from the program, he said.
Meanwhile, he kept notes his doctor has given him throughout the last few months, just in case the state asks why he isn’t returning to work. Studies have shown that for some 7 million people in the U.S. who are immunocompromised, vaccines are less effective against COVID-19.
Jones’ wife is now thinking of reducing her retirement contributions to help pay the bills, he said.
“There’s a lot of ripple effects that happen when you do those things that I don’t think the government is fully appreciating,” he said. “I don’t know what’s going to happen to the economy in California? What they’re expecting is they’ll end this and a whole bunch of people not working will get back to work. I don’t think that’s going to happen.”
Will workers find jobs?
Some workers said they are okay with the end of the benefits, saying they have shifted their work to adapt to the pandemic.
For Nancy Travis, 72 of Richmond, the benefits have been invaluable. But she was planning for them to end, she said.
Travis, who had driven for rideshare companies, is now working as a private driver in the wine country.
“I worried a lot, but now, I feel pretty confident,” she said.
Still, Erica Mighetto, an organizer with a driver group Rideshare Drivers United, said she predicts a lot of drivers will be returning to work. She said she’s concerned, given the rise of the highly transmissible delta variant.
“I’m really scared for what to come for them given the holidays are just short ways off, said Mighetto, a 39-year-old rideshare driver who had been based in Sacramento until recently.
As for herself, she too is thinking she has to get back to driving, even as her partner is trying to get a job working at an Amazon warehouse. She and her partner have been trying to save, even driving around the state to find campsites to sleep in, but it hasn’t been enough, she said.
“It’s a dismal situation for most of us.”
This story was originally published September 4, 2021 at 5:25 AM.
