Unemployment Benefits Created During COVID Reached Workers Historically Shut Out

Millions of Americans have entered Labor Day weekend knowing that one of the key unemployment benefits that has been keeping them afloat throughout the pandemic is coming to an end. States across the country have announced they will not be extending the specially created federal pandemic unemployment beyond Sept. 4, leaving workers and advocates scrambling to figure out what to do next.

But while first-time unemployment claims are currently at their lowest rates since March 2020, when the COVID-19 pandemic began, about 3.4 million Americans are considered long-term unemployed, meaning they have been out of work for six months or longer. According to the Bureau of Labor Statistics in August, these workers represent about 39% of those currently on unemployment benefits, a statistic that is particularly worrying to experts because of the stress the lack of income puts on personal savings and the fact that workers tend to earn less than they did before when they do find new positions.

While long-term unemployed people figure out their next steps, those who have been unable to access any sort of unemployment relief will be continuing to search for a way to make ends meet.

“Even before the pandemic, just one out of four workers who are unemployed were getting employment checks,” said Andrew Stettner, a senior fellow at The Century Foundation who specializes in unemployment. “The program is really restricted.”

Among those traditionally shut out of unemployment insurance access prior to the pandemic were gig workers, freelancers, students, migrant workers, and undocumented immigrants who, despite paying taxes, often do not qualify for assistance. Also excluded were workers who had to leave their jobs because of illness or a lack of child care, Stettner said. Under the specially created CARES Act, which was designed to address coronavirus-related economic issues, many of these groups received assistance for the first time.

Experts and community advocates stress that a better approach to unemployment is possible — and that many special programs created specifically to address the catastrophic job losses related to the pandemic can serve as a model for what permanent change can look like.

The federal weekly unemployment subsidy — which was up to $600 a week — was a game changer for families living in poverty in particular, said Cassandra Welchin, the executive director of the Mississippi Black Women’s Roundtable (MBWR), a Jackson, Mississippi-based community network that serves Black women and girls.

“Right when the pandemic happened and families were accessing those resources, it made a significant difference particularly when we talk about single moms,” she said, noting that many of these women are in the service industry. “They are low-wage workers who are barely making ends meet.”

The availability and accessibility of unemployment insurance also varies greatly by state and Stettner notes that the differences between different regions — and the way primarily white workforces and communities of color are treated — is stark. States like Minnesota, North Dakota, and Oregon tend to have fewer barriers to unemployment assistance, while states in the South and Southwest — regions where much of the low-income workforce tends to be Latinx and Black — tend to have lower benefits that are harder to get approved for, with many workers in those states getting their unemployment eligibility challenged by either their former employer or the state if stringent requirements aren’t followed.

Workers will “say they lost their job because of COVID, and that their employers will say they didn’t, that they are still eligible to work,” but will not be scheduled for shifts. said Stettner. Additionally, the record number of people filing for unemployment benefits during the pandemic has overwhelmed the system.

“It really is very racially constructed, how accessible the benefits are,” Stettner said.

The staff at the Mississippi Black Women’s Roundtable say they see every day how that disparity plays out for Black women in their state, noting that after taxes, most Mississipians receive about $200 a week in unemployment benefits.

“I can speak from experience and say that is not enough,” said Melissa Overton, the group’s special projects coordinator. The enhanced unemployment benefit allowed many of these women to provide for their children while also addressing household debt for the first time. “It allowed them to say, ‘Okay, this week will be for the rent check, this week will be for the car note, this will be groceries,” Overton said.

When Mississippi Gov. Tate Reeves announced the state would opt out of the enhanced federal unemployment benefits beginning on June 12, those same families were left reeling.

“That [decision] hurt a lot of families and a lot of women,” Overton said.

Lessening the amount of control individual states can have over how unemployment benefits are distributed is an essential part of reform, Stettner said.

“If we want to fix it, we need to have more federal standards,” he said. “The shift needs to happen from ‘This is a state problem’ to ‘This is a national priority.’”

For undocumented Americans — a group that disproportionately works in the service industry — the combined impact of a loss of income because of the pandemic and a lack of unemployment benefits was felt immediately.

“It can be very difficult because none of them are qualified for any sort of unemployment,” said Yesenia Mata, the executive director of La Colmena, a community-based organization in New York City’s Staten Island that supports day laborers and undocumented workers.

As organizers lobby for better benefits for those traditionally shut out of the unemployment system, they also say that advocating for better unemployment is just one step needed to improve the lives of low-wage workers, especially those from poorer states.

“Let’s increase wages in this state, let’s have an equal pay bill in Mississippi that would close the wage gap,” Welchlin said. “When we talk about people’s — in particular women’s — economic security, we want equity here.”

Prism is a BIPOC-led nonprofit news outlet that centers the people, places and issues currently underreported by national media.