Colton Harpie gets $98 a week, before taxes, in unemployment benefits from California. He was ineligible for a temporary $300 weekly boost in aid.
These days, Colton Harpie, a stand-up comic in San Diego, can’t help but recall the late George Carlin’s observations about American rights.
Carlin, who peppered his comedy with scathing political and social commentary, quipped that our rights are imaginary — made up, like the Boogeyman and the Three Little Pigs.
Harpie, 31, thinks that illusion extends to the country’s financial safety nets like the unemployment system, which millions have turned to amid the economic destruction of the Covid-19 pandemic.
George Carlin. Saturday Night Live, Season 1.
Herb Ball | NBC | NBCUniversal | Getty Images
“I feel like all these programs are created to give the illusion they’re doing things properly and nobody panics,” Harpie said. “But the reality is, that’s not the case.
“All these roadblocks are put up,” he added. “There’s nothing to fall back on.”
Jobless since March, Harpie, who worked the door and warmed up the crowd at the La Jolla, California, outpost of The Comedy Store, gets $98 a week in unemployment benefits, before tax. A $600 weekly enhancement to benefits, which had kept him afloat earlier in the coronavirus pandemic, lapsed almost three months ago.
I may have screwed myself in the long run. [But] I was desperate.
Worker in California
But the administration didn’t pay the aid to workers getting less than $100 a week in unemployment benefits — arguably the people who need the help most.
Harpie was $2 short.
His financial situation has become precarious. He maxed out his credit card and missed his October rent payment. Job applications have gone unanswered. He applied for food stamps and welfare in California last month but hasn’t been approved or heard from the respective agencies.
JEFF KOWALSKY | AFP | Getty Images
Now, California mysteriously stopped sending Harpie the little in benefits he was getting.
“I’d be getting by [with the $300 benefit],” Harpie said. “I wouldn’t be in this position and panicked every second.”
Lost Wages Assistance
Harpie is one of thousands ineligible for the Lost Wages Assistance program.
Roughly 6% of workers collecting unemployment insurance from their state didn’t get the aid because they fell below the $100-a-week threshold, according to an initial estimate from Eliza Forsythe, a labor economist and assistant professor at the University of Illinois.
That amounts to more than 912,000 people as of Aug. 1, when the program started, according an analysis of Labor Department data.
Unemployment benefits are tied to prior wages. So, people paid less than $100 a week in jobless benefits tended to be lower-paid or worked part-time hours before the pandemic.
“In a way, the poorest people are excluded,” said Ioana Marinescu, an assistant professor of economics at the University of Pennsylvania. “It’s a really tough spot to be in for those individuals.”
Low-wage workers are also less likely to have much savings or the ability to tap credit during hard times, Marinescu said.
Mike L., a 44-year-old from La Quinta, California, was also ineligible for Lost Wages Assistance. (He requested his last name not be used for privacy reasons.)
He’d been managing a marijuana dispensary since late last year, but lost that job in March. He was collecting $99 a week in unemployment benefits, records show — $1 short of the threshold to receive the benefit.
“It was really heartbreaking,” Mike L. said. “I thought, ‘Am I really going to be $1 short? Can that really be happening to me?’
“I was ready to cry,” he added.
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Mike and his wife, who works at Starbucks, were able to save about $12,000 before the pandemic. That lifeline was depleted after the $600 weekly unemployment supplement lapsed and he took a last-minute trip to the East Coast to visit his uncle, who was put in hospice care.
“Our savings are completely gone,” he said. “We’re back to paycheck to paycheck.”
Luckily, Mike started a new job last week driving for a different dispensary.
This is the first month I literally have nothing.
But it came with a pay cut. Mike’s new gig pays $14 an hour; he made $20 an hour at his prior job.
“I may have screwed myself in the long run,” Mike said. “[But] I was desperate.”
Finding a job right now may prove challenging for many people, with nearly 7 million more unemployed workers than job openings, according to the Economic Policy Institute, a left-leaning think tank.
Savings running out
Desperation is likely to increase in coming weeks and months, according to economists.
The $600 weekly benefit provided a substantial boost in jobless aid, which was enacted by the $2.2 trillion federal CARES Act in March.
Republicans criticized this generosity as a disincentive to work, though numerous economic studies haven’t found evidence for this disincentive effect in the labor market.
Unemployment benefits replaced 145% of lost wages for the typical jobless worker with the $600 boost, compared to about half of wages pre-pandemic, according to economists at the University of Chicago.
Unemployed workers used that extra cash to roughly double their liquid savings from March to July, according to an analysis of checking account data by JPMorgan Chase and University of Chicago researchers.
However, they spent two-thirds of that savings in August alone, the month after the $600 supplement expired, the researchers found.
That expiration removed a cumulative $60 billion in support from the economy in August, according to Ernie Tedeschi, an economist at Evercore ISI.
Absent additional financial relief, unemployed families have, at most, enough savings to maintain their summer spending levels until mid-December, Tedeschi found. It’s likely that families will run out sooner, perhaps as soon as this month, he said.
“This is the first month I literally have nothing,” according to Harpie, the stand-up comic.
Meanwhile, hopes for additional relief dwindle as Election Day nears, creating the possibility that Americans must wait many more weeks, and potentially until next year, for any forthcoming aid.
House Speaker Nancy Pelosi, D-Calif., at the U.S. Capitol on Oct. 9.
Stefani Reynolds/Bloomberg via Getty Images
House Speaker Nancy Pelosi, D-Calif., who has been negotiating the contours of another relief package with Treasury Secretary Steven Mnuchin, gave the White House a Tuesday deadline to reconcile differences to get a deal done before the election.
More than 25 million Americans are collecting benefits and nearly 886,000 people filed applications for benefits last week, according to Labor Department data.
Roughly 8 million Americans slipped into poverty between May and August due to lapsed relief like unemployment benefits and one-time stimulus checks, according to an analysis by researchers from Columbia University.
“Americans are facing substantial cuts to their weekly income,” said Till von Wachter, an economics professor at the University of California Los Angeles and director of the California Policy Lab. “That means less money to spend on rent, groceries and other necessities.”
The situation is especially dire for individuals who were ineligible for Lost Wages Assistance, von Wachter said.
States paid $306 a week (about $1,200 a month), on average, in unemployment benefits in August, according to the Labor Department. Some paid as little as $180 a week to the average worker.
The $100-a-week cutoff to receive Lost Wages Assistance differs from eligibility rules for the $600 weekly CARES Act supplement, which was available to anyone receiving jobless benefits.
Trump administration officials have said the rule helped ensure people who lost side gigs, as opposed to a primary income source, can’t collect the subsidy. A Labor Department spokesman affirmed that logic in a statement. A White House spokesman didn’t respond to a request for comment.
Meanwhile, the eligibility rules left out people like Harpie, who worked about 25 hours a week for minimum wage and picked up stand-up gigs on the side for some extra cash.
“I wasn’t making crazy money, but I was getting by,” according to Harpie, who’s been a comedian for about eight years and said his career was just starting to take off before the pandemic.
Colleagues at The Comedy Store who worked similar hours collected a greater amount of benefits per week, and therefore received Lost Wages Assistance, Harpie said. He believes the state miscalculated his weekly benefit.
A spokesperson for the California Employment Development Department declined to discuss specifics of Harpie’s claim due to privacy rules. He has the right to appeal the determination, the spokesperson said.