End of federal $600 unemployment benefit leaves Minnesotans anxious
In late March, Rachel Galarneau was furloughed from her job as a server and bartender at a Minneapolis restaurant. She filed for state unemployment benefits, and started receiving about $400 per week.
“Nobody can live on that, especially when I'm a single mom of a disabled child,” said Galarneau, whose 13-year-old daughter, Emma, has autism.
But with the extra $600 per week in the CARES Act aid she's gotten from the federal government, Galarneau said she earned about the same amount as she did at her old job.
“To me, that was a life saver,” she said.
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But that extra cash expires Friday. And Galarneau, who also has a chronic illness and is at higher risk from the virus, is afraid to go back to work.
She has enough money saved up for a few months, but then is worried about how she’s going to pay the rent for her small Edina apartment, and other expenses.
Shelley DeWees of South St. Paul is in a similar predicament. She was furloughed from her part-time marketing job several months ago.
When schools closed, she needed to find child care for her two preschoolers, so she could take her 1-year old, who has cerebral palsy, to medical appointments.
"We found ourselves really looking at a big chasm in our financials," she said.
Her family was able to bridge that chasm with the extra $600 a week in federal funding, she said, which covered their child care costs.
"So we are really, really feeling the strain of potential financial difficulties,” DeWees said. “If the $600 doesn't continue and we have no school … and if we don't have money to pay for child care, I can't get my son with cerebral palsy to his appointments."
Congress is currently debating whether to extend the additional federal unemployment payments — and, if so, by how much, and for how long.
About 30 million Americans — including almost 400,000 Minnesotans — are currently relying on unemployment payments, according to the most recent data from the Department of Labor.
"There are good studies out there, high quality studies coming out, showing how this is staving off food insecurity and housing instability,” said Aaron Sojourner, a labor economist at the University of Minnesota’s Carlson School of Management.
In other words: It's helping to pay the rent, and put food on the table.
It's also pumping money into the broader economy. A new study found that families receiving benefits increased their spending by 10 percent compared to pre-pandemic levels. Those who kept their jobs reduced their spending.
But with that extra $600, many people are earning more money while they're unemployed than they did while they were working.
University of Chicago researchers found that two-thirds of people who lost jobs have made more while on unemployment.
Many business owners have said that's made it challenging to attract workers.
Sojourner said while that may be true in some instances, overall, there are five times more unemployed workers than available jobs.
"There's just not enough jobs out there for people,” he said. “But families still need to make it through the month."
Unemployed workers who spoke to MPR News said they’d love to go back to work — if they could find a job.
"I don't love sitting at home. I know that the rest of America and myself are trying everything we can to get back to work,” said Aaron Wheeler of Minneapolis, who was furloughed from his job as a stage manager at the Ordway in St. Paul.
“But we're also in a pandemic. It's not a pull-yourself-up-by-your-bootstraps situation. It's hey, we need to all collectively work together to figure out how to move forward as a country."
Wheeler has a job interview lined up next week. If he gets it, he'd face a tough decision. It's based in Montana, so he'd have to move. And he loves it here. But if he stays, he knows that theaters in the Twin Cities likely won't open back up until sometime next year.