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The airline industry, among several others, has been hit particularly hard by the pandemic. As a result, thousands of workers have been laid off or furloughed (Photo by KAMIL KRZACZYNSKI/AFP via Getty Images)
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Jobless Americans in more than 20 states have started to receive an extra $300 a week in unemployment benefits under President Donald Trump’s executive order. In some states, that will cover six weeks of payments retroactive to Aug. 1, but for unemployed Americans in other states, that won’t be in the case.
On Monday, Florida’s Department of Economic Opportunity said eligible Floridians will receive only four weeks’ worth of the additional $300 benefit. That’s because Florida is no longer eligible to hand out the extra $300, which is being funded by $44 billion in federal disaster relief funds.
To qualify for the extra $300, unemployed workers must already receive at least $100 a month in state-level unemployment benefits. States can chip in this $100 themselves, or pay 25% of all of their weekly unemployment claims using state funds to make their residents eligible for the extra $300.
But as of Aug. 29, only about 368,000 unemployment claims in Florida were state-funded. That amounts to19% of Florida’s total unemployment claims, First Coast News, a Florida news outlet, reported.
States who met the 25% cost-sharing requirement or chipped in $100 extra, including Montana and Kentucky, were initially guaranteed at least three weeks of the $300 add-on benefit once approved by the Federal Emergency Management Agency, which oversees the Lost Wage Assistance program.
Because unemployment beneficiaries are only eligible for the extra $300 if they receive at least $100 in state-level benefits, nearly 1 million Americans who receive less than $100 a week would be ineligible for the add-on benefit, Eliza Forsythe, a labor economist and assistant professor at the University of Illinois at Urbana-Champaign, calculated.
But more recently, FEMA said that it will “make grant awards to enable requesting states, territories and the District of Columbia to make $300 LWA supplemental wage payments to eligible claimants for a full six weeks.”
What’s going on in Florida
The percentage of Floridians receiving state unemployment benefits has continued to decline despite the significant number of new cases of coronavirus reported in the state.
That’s not necessarily a sign of economic recovery in the state. It is likely occurring because Floridians are only eligible for 12 weeks of state unemployment benefits, the shortest span of time among all 50 states.
“Florida’s historically low unemployment rate in 2019, pre COVID-19, set the number of weeks Floridians are eligible for state Reemployment Assistance in 2020 ,” Paige Landrum, a DEO spokesperson said in a statement to MarketWatch.
At the federal level, Floridians could still be eligible for unemployment benefits through CARES Act funded programs such as Pandemic Emergency Unemployment Compensation or Pandemic Unemployment Assistance.
But those payments won’t count towards the 25% states are required to pay in weekly unemployment claims to qualify for the $300 add-on benefit.
Some states have received six weeks’ worth of funding, but labor experts are skeptical that other eligible states will as well
More than $30 billion — two-thirds of the FEMA disaster-relief funds being used for the LWA program — has been distributed to make the $300-a-week payments across more than 20 states as of Monday. In total, 49 states have been approved by FEMA to start making payments. South Dakota was the only state that did not apply.
Already, Texas, Iowa, Montana, Tennessee and New Hampshire were informed by FEMA that the week ending Sept. 5 was the last covered by the additional benefit. In total, they will have received six weeks of funding.
Connecticut and West Virginia both recently received FEMA’s approval for six weeks’ worth of funding.
But, jobless Americans who reside in states such as New Mexico and California could end up receiving only five weeks’ worth of the add-on benefit.
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Other states, such as Alaska, which received FEMA’s approval on Aug. 24, have not even started to make payments due to computer reprogramming challenges.
The Alaska Department of Labor and Workforce Development said it would likely take at least eight weeks to start distributing the funds upon receiving FEMA’s approval.
For a while, it seemed as though states which began administering the $300 add-on benefits quickest would have access to FEMA’s finite funds for a longer period of time than states like Alaska, said Michele Evermore, a policy expert at the National Employment Law Project, a nonprofit group that advocates for low-wage workers.
That’s why “FEMA had to stop payment in some of the states that have been faster to pay benefits to make sure that the distribution of the benefits is equal across states,” Evermore said.
That doesn’t appear to be the case for the time being
Other states, including New Mexico, which was one of the first four states to receive FEMA’s approval, informed residents that it only received funding for five weeks and is “is currently awaiting additional funding from FEMA for a sixth week of LWA payments.”
There are also concerns that FEMA funds intended for the LWA program payments will be used to help fight the wildfires raging across the West Coast, among other natural disasters, before all states have the opportunity to distribute six weeks of the $300 add-on benefit given.
A FEMA spokesperson said that wasn’t the case. “FEMA’s funding of ongoing recovery projects from previous as well as new disasters has not been affected by the COVID-19 pandemic,” a FEMA spokesperson told MarketWatch.
“ Last month, the Committee for a Responsible Federal Budget, a nonpartisan think-tank, estimated that the FEMA funds weren’t sufficient to fund more than five weeks of LWA payments. ”
Evermore is skeptical of that. “Who knows how fast it’ll wind down,” she said, referring to the FEMA fund. “With all the wildfires it seems like a big promise to make,” Evermore said, referring to funding six weeks’ worth of the $300 benefit for 49 states.
Last month, the Committee for a Responsible Federal Budget, a nonpartisan think-tank, estimated that the FEMA funds weren’t sufficient to fund more than five weeks of LWA payments.
Before the CARES Act’s $600 enhanced unemployment benefit expired, the federal government distributed an average of $16.6 billion a week in the last four weeks of July, according to data the U.S. Department of Labor provided to The Wall Street Journal.
With weekly benefits at half that amount, the government would distribute roughly $8.3 billion a week. At that rate, the $44 billion fund would be exhausted in less than six weeks, a senior Labor Department official confirmed to the Journal in late August.
As for what nearly 30 million unemployed Americans could expect after the FEMA funds are exhausted, absent of any Congressional or executive actions, they’ll go back to receiving pre-pandemic amounts of unemployment benefits. In six states, the maximum amount of unemployment benefits one can collect equates to less than the $7.25 an hour federal minimum wage, CNBC reported.
“I’m terrified that Congress ignores this and then there’s another wave of COVID and layoffs,” Evermore said.
