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“Frightening.” “Terrifying.” Coloradans brace for fiscal fallout as federal $600 weekly unemployment aid ends

Fate of additional assistance up in air as a divided Congress debates next steps in coronavirus relief

Elise Dantzler with Colorado Restaurant Workers United, speaks at a rally for unemployed restaurant workers and supporters gathered at 17th and California to protest the end of federal unemployment benefits July 24, 2020. Colorado Restaurant Workers United organized the protest which also included a mock funeral procession to  Sen. Cory Gardner’s office nearby at 19th and Stout.
Elise Dantzler with Colorado Restaurant Workers United, speaks at a rally for unemployed restaurant workers and supporters gathered at 17th and California to protest the end of federal unemployment benefits July 24, 2020. Colorado Restaurant Workers United organized the protest which also included a mock funeral procession to Sen. Cory Gardner’s office nearby at 19th and Stout.

Congress is debating whether to extend, reduce or replace the weekly $600 unemployment benefit that was part of a federal coronavirus relief package. And while the debate continues, the money has run out.

Hundreds of thousands of Coloradans will keep getting their standard unemployment benefit from the state. But the extra $600 that has helped people pay the bills, cover the rent or mortgage and buy groceries ended on Saturday.

Even if lawmakers resolve their differences soon — maybe even this week — over new spending and additional federal help for people out of work, there will be a lag while state labor departments reprogram their systems. That could take days or weeks, depending on how complicated the change is.

The Colorado Department of Labor and Employment estimates that roughly 330,000 Coloradans were receiving the $600 a week on top of regular unemployment benefits. The self-employed, gig workers and independent contractors, who receive Pandemic Unemployment Assistance, also were able to draw the enhanced benefit.

“Unfortunately, we likely know as much you do with regard to what action Congress might take,” Cher Haavind, the labor department’s deputy executive director, said in a call with reporters last week.

People can apply retroactively for the $600 benefit, but not for any weeks after July 25.

Westminster resident Jim Mimna said the end of the federal benefit is frightening. “I have two kids. It’s not like it’s just my rear end that’s on the line right now.”

Mimna is a music photographer who, in a normal year, photographs 200 to 250 concerts a year, including about 50 shows at Red Rocks Amphitheatre. He also photographs musicians in the studio, providing fodder for album covers and press materials and shoots music videos.

“It’s all gone, completely,” Mimna said.

He also does commercial photography and sometimes photographs weddings. All the weddings he had lined up have been canceled. Last week, after making repairs to his van, he drove to Pueblo to check into a part-time delivery job for a marijuana company.

The single dad started collecting unemployment about a month ago, after straightening out his taxes. He said the extra $600 a week has been a lifeline. Without it, he thinks his weekly unemployment payment could go as low as $100.

“The only thing I know to do if I can’t make ends meet is to start selling my camera gear. I’ve got to keep a roof over the kids’ heads,” Mimna said.

He has already sold some of his work, literally off his walls, to raise money.

The end of the expanded unemployment benefit in Colorado and nationwide comes as the number of coronavirus cases in the U.S. is surging and states are pausing or rolling back plans to lift restrictions on businesses and activities.

Also on the rise is the number of new claims for unemployment. The U.S. Department of Labor said more than 1.4 million new claims nationwide were submitted for the week ending July 18, up from 1.3 million the previous week. New claims by self-employed and gig workers totaled about 975,000. The New York Times reported that during the last recession, weekly unemployment insurance applications never exceeded 700,000.

In Colorado, a total of 16,398 people, including gig workers, filed new claims, an increase from 15,926 the week ending July 11. Coloradans have filed a total of 646,797 claims since mid-March.

At the same time, overall personal income levels have increased during the recession. The federal Bureau of Economic Analysis reported that personal income shot up 10.5% in April, primarily because of the $1,200 stimulus check. In May, the federal unemployment assistance contributed to a boost of $842 billion in personal income.

“That’s so counter to what I would normally expect, reviewing prior recessions. I think that’s really evidence of the government stimulus, notably those extra unemployment benefits that went out to individuals,” said Brian Lewandowski, executive director of the business research division at the University of Colorado-Boulder’s Leeds School of business.

Continuation of the $600 payments has been a flashpoint in the negotiations over new federal aid. Opponents argue the benefit discourages people from returning to work because they can make more money on unemployment. If the $600 payment is extended for six months, about five of every six recipients would receive benefits exceeding the weekly pay they could expect to earn, a recent Congressional  Budget Office report said.

The $600 benefit has buffered the blows to the overall economy and individual households, according to a blog by Josh Bivens, the director of research at the nonprofit Economic Policy Institute. He said extending the $600  benefit through the middle of 2021 would boost the quarterly gross domestic product by an average of 3.7% and increase employment by 5.1 million workers.

If the $600 payments aren’t extended, jobs will be lost, Bivens said in an email. Income losses will result in lower demand for goods and services and cut the demand for workers, he added. Colorado would lose 66,898 jobs over the next year, according to the think tank’s estimates.

Lewandowski agrees that the federal programs have softened the pandemic’s financial hit, but he worries about the spending’s long-term impacts on the nation’s debt.

“That being said, I’m still a proponent of the federal stimulus,” Lewandowski said. “I think that the risk is if we end those policies too soon, we’ll end up seeing a slowing economy because the economy is not on a strong enough footing to support itself.”

Lewandowski points to a return in some states to limited lockdowns or restrictions to slow the spread of COVID-19. Gov. Jared Polis recently ordered the last call for alcohol be moved up to 10 p.m. for bars and restaurants statewide.

Erin Callihan said she’s eager to get back to work. She was an Uber driver in the Denver area for nearly two years and was working about 35 hours a week “when everything just came to that screeching halt.” After the pandemic hit, she didn’t earn enough to rent a car.

Callihan said the regular unemployment payment plus the weekly $600 federal assistance have kept a roof over her head. She called the end of the benefit “terrifying.”

“When the $600 drops off for me, I’m going to be down to $226 (a week) before taxes.”

She said she could start “Ubering” again, but worries about the coronavirus. If she returns to work, Callihan said she would have to stay away from her mother and stepfather to protect them.

“I am chomping at the bit to get back to work as soon as it’s safe. I’m a single person. I want to be able to go out and meet people,” Callihan said. “But I’m trying to do what I can do to prevent this virus from spreading farther. That’s where the $600 has been a benefit, allowing me to take those precautions and still maintain a place to live, maintain having food in my stomach.”

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