New Jersey’s unemployed fret about federal benefits expiring

Life was turning around for NyKia Jackson.

After spending months without a stable roof over her head and crashing on a friend’s couch, Jackson rented an apartment in Pemberton perfect for her and her three kids. She had saved up some money from her jobs at Burger King and as a teacher in a preschool.

Once the pandemic shuttered schools, she had to leave her jobs to take care of her kids, 9, 5, and 2 years old. Her weekly $231 of Pandemic Unemployment Assistance and the supplemental $600 courtesy of the federal government wasn’t enough to cover all her bills, but it was a lifeline.

That lifeline ends next week, when Jackson will be one of 500,000 New Jerseyans — and one of 7.5 million people nationwide — to fall off the unemployment cliff, as federal benefits halt Sept. 6. After extending jobless benefits three times since the pandemic began, Congress declined to extend them again.

“Everything is ending now, and it’s another fast turn I’m taking,” said Jackson, 33. “I’m just thinking, how am I going to survive again?”

Pandemic Unemployment Assistance and the Pandemic Unemployment Emergency Compensation Fund extend benefits to people who typically aren’t eligible or claimants who have exhausted state benefits. The Federal Pandemic Unemployment Compensation provided the additional $600, which was lowered to $300 when benefits were extended in January.

The programs were enacted at the height of the pandemic, in the wake of skyrocketing unemployment, mass layoffs, and widespread business closures. In New Jersey, more than 2.2 million people filed for unemployment benefits, peaking at 200,000 workers filing weekly claims in April 2020.

Sixteen months later, New Jersey is tied for the fifth highest unemployment rate in the nation at 7.3%. The state has recovered roughly 60% of jobs lost since March 2020.

President Joe Biden urged states with high unemployment rates to use federal funds, like American Rescue Plan dollars, to continue paying out additional unemployment benefits.  At a coronavirus press briefing last week, Gov. Phil Murphy declined to say if New Jersey would do so. The state received more than $6 billion from that pot of money in May.

A state Department of Labor spokeswoman said the agency is “waiting for forthcoming guidance” from Washington, D.C. The department did not respond to multiple requests for further comment.

Since the start of the pandemic, the state Labor Department has doled out more than $33 billion in state and federal benefits. The unemployment trust fund is already depleted.

“It’s a train wreck we can see coming,” said Andrew Stettner, a senior fellow with progressive think tank The Century Foundation. “What will happen to these folks? Some will find jobs, but I think millions won’t and will suffer the kind of consequences we’ve seen historically during an economic downturn.”

Assemblyman Hal Wirths (R-Sussex), who was state labor commissioner during the Great Recession, recalled extending unemployment benefits when unemployment hit 10% in 2009.

Wirths said he sympathizes with people who can’t rejoin the workforce due to health or child care reasons, but he doesn’t support extending benefits.

“For the critics, it’s tough to explain that we have the most amount of jobs open in history, and at the same time we keep paying out extended benefits,” he said. “There’s no question it was needed when Covid was severe, but it’s a bad idea to continue it.”

Earlier this month, the U.S. Bureau of Labor Statistics reported 10.1 million job openings on the last business day in June.

The impact of losing benefits on New Jerseyans

A former senior lead at Santander Bank, Giselle Manzano was used to bringing in a six-figure salary for years. When pandemic restrictions set in, Manzano’s schedule was cut to three days a week, and the company took away all bonuses, overtime, and commissions.

On March 21, 2021, she was laid off and filed for unemployment benefits. When federal programs lift, she’ll still have state benefits through the winter, but will lose the supplemental $300.

“I went from six figures to $731 a week. Now I’m paying $1,003 a month for health benefits, I stopped paying my life insurance, I’ve emptied out my savings, both my retirement accounts, it’s all gone,” Manzano said. “I’m cutting coupons. It’s just something I’ve never had to do before in my life.”

She’s applied to hundreds of corporate jobs, she said, but since she lives with her two elderly parents, she said she can’t take a risky job in retail or at a supermarket. But if Mazano finds that just state benefits won’t hold her over, she might have to reassess that risk.

“As a second-generation immigrant, we’ve always been taught no matter what, we work, and I want to work. But it’s not ending. Now with the Delta variant, we’re not close to this being over,” she said.

She added: “What am I going to do if I bring the virus back to my parents?”

Stephanie Freed, the executive director of ExtendPUA, a national grassroots organization focused on lobbying federal officials to extend unemployment benefits, said millions of people like Manzano are left to weigh those options: go broke, or bring a potentially deadly virus home.

“There’s a lot of panic happening, a lot of desperation, and a lot of frustration and rage. People feel like they’re being betrayed,” Freed said.

ExtendPUA helped push for an extension for benefits in July 2020, and met with senators in the fall when those benefits were set to expire in December. This time, she said, there appears to be no urgency to extend pandemic-era programs.

The organization created an online resource to offer food pantry location and rental assistance, but Freed stressed mutual aid is not enough to save everyone. She’s optimistic Murphy might look at approving additional benefits in light of the November election, when he is on the ballot seeking a second term.

“I genuinely don’t know what’s going to happen. It’s terrifying, cruel and disappointing to see,” she said. “We need to see more leadership from legislators on every level.”

Jackson said losing weekly benefits will be very hard on her. She said she lies awake at night trying to figure out how to balance losing her income with having no one to help her watch her kids.

“Three kids alone is a lot. Then there’s rent, the phone bill, school shopping. I do have money saved up in case of an emergency, because I’m a mom, but once that’s gone, I have nothing,” she said. “I’m still trying to make ends meet.”

The jobs she’s applied to either want her to work overnight, or require a schedule that doesn’t work because she has no child care, she said. Other jobs require a car, since public transportation is unreliable. Most places she applies to never call her back.

And even if she did find a job, a potential outbreak at school could force her and her children into a two-week quarantine, something she can’t afford to do.

Jackson took advantage of some free time during the pandemic to study for her driving permit, in hopes of buying a car. Maybe she’ll drive for Uber or Lyft, she said, which would save her the $18 roundtrip to take her kids to school since there’s no bus to drop them off.

“If I could do that, and I can save up money for my car, then the situation wouldn’t be where it’s at right now,” she said.

Debating how to spend federal funds

State Senator Loretta Weinberg said there hasn’t been much chatter among state lawmakers on using ARP money to extend unemployment. Weinberg (D-Bergen) said she’d be open to it, but would need a briefing from the Labor Department on pros and cons.

“How many people will lose benefits? Do we have job openings for all these people? Do we have child care in place for working parents? There’s a number of questions that haven’t been answered adequately,” she said.

Stettner, the Century Foundation economist, noted while there are millions of jobs open, many people aren’t returning to work for various reasons. People are rethinking their career paths, weighing the danger of in-person jobs, or worried it’s still too unsafe to return to work, he said.

In 26 Republican-controlled states where unemployment benefits were cut months ago, there was no major hiring boom. Stettner doesn’t expect a flood of people suddenly applying for jobs in New Jersey come Sept. 6, either.

“It’s not like these benefits will go away and people will magically go back to work,” he said. “When you survey people and ask why they’re not looking for work, there’s so many reasons besides unemployment. It’s also time for employers to think long and hard.”

State Sen. Declan O’Scanlon said he’s heard from plenty of business owners who all report dealing with a labor shortage over the summer. O’Scanlon (R-Monmouth) pointed to a Cape May restaurant that had to close on a busy night because the manager had no servers.

“This isn’t me trying to be cold and hard, this is me caring about our overall economy,” he said. “We need to keep businesses in business, make sure people are getting to the jobs they need, and the time to do that is now.”

Lifting benefits won’t solve the so-called labor shortage overnight, he said, but he expects it to quickly “make a big dent.”

He also noted he’d rather use the ARP money to replenish the depleted Unemployment Trust Fund, instead of the route that Murphy decided to go. The Democratic governor signed a law in January raising the money through a three-year tax hike on businesses, starting with an estimated $250 million increase in October.

Wirths is sponsoring a bill, A5828, in the Assembly that would allocate $2 billion to the trust fund.

“It’s a no-brainer to me,” Wirths said. “We have $6 billion, there’s no need for a $250 million tax increase and many more to come. And I’m not going to advocate for extending federal benefits — I’ve never seen so many help wanted signs in my life.”

Weeks away from losing her benefits and with few choices at her fingertips, Manzano has been pleading to lawmakers to rethink letting the extra benefits expire.

“Please look at me. You don’t want to generalize and put them all in the same pool and say they’re all unemployed by choice. I’m breaking down like this, so we need this important change,” she said.