Two million Californians lost unemployment benefits when last September four federal pandemic-era programs ended. Some workers rushed to look for work, as employers hoped. But others, who spent months trying to find permanent work, had their safety net ripped from under them.
“A lot of people were really trying to get back on the job and just couldn’t find steady work,” said Daniela Urban, executive director of the Sacramento Workers’ Rights Center. After the federal programs ended, Urban and her organization found themselves in triage mode, connecting the unemployed with homeless prevention services and CalFresh only to meet their basic needs.
“For most of the people we’ve talked to,” Urban said, “this has been an exceptional financial support for them and our family.”
When Washington ended emergency unemployment benefits last year, black, older or less educated workers in California suffered disproportionately financially, according to a new study by the California Policy Lab released Thursday.
The unemployed had the right to receive up to 53 weeks unemployment benefits under the federal Pandemic Unemployment Compensation (PEUC) program, created in March 2020 when the Covid pandemic sent the economy reeling.
“Our analysis,” the report notes, “shows that the extension has been a disproportionate lifeline for less-educated workers, black workers, and workers over age 64.”
Thiel von Wachter, co-author of the study and faculty director of the California Policy Lab at the University of California, Los Angeles. said: “Throughout the crisis, the most vulnerable workers have fared worse, including when you look at who was more likely to receive assistance under the PEUC program when it was terminated.”
A month earlier, three out of four unemployed people in the state were receiving either regular benefits or PEUC benefits. By October, this percentage had fallen to 26%.
Still, the unemployment rate remained above the national average, and the study found that in California and other similar states, “the majority of workers who stopped receiving unemployment benefits did not find work in the months that followed.”
In California, black workers made up the largest share of PEUC applicants.
As a result, “black applicants were adversely affected by the PEUC deadline,” the report said.
People with a high school diploma but no college degree also qualified for PEUC benefits at a higher rate than regular benefits. And PEUC claimants were about 34% more likely to be over age 64 than people who regularly received unemployment benefits. There were also more women than men receiving PEUC when it ended.
Workers receiving PEUC benefits were hit particularly hard when another wave of Covid hit during the 2021 holidays, triggering another round of layoffs. This time, however, many workers were unable to claim a new jobless claim and were left to fend for themselves.
“Even if they were to return to work after the benefits extension ended,” Urban explained, “the wage requirements made it difficult for people to get a new claim until mid-2022.”
During the pandemic, Washington created a variety of programs aimed at helping people who traditionally did not qualify for regular state unemployment benefits, such as small business owners or independent contractors. It also provided additional weeks of relief as the economy continued to struggle.
Eighteen states have decided to end the PEUC program early, with many governors arguing that the benefits are discouraging people from looking for work. But the study found that about 3.1 million people lost access to benefits by not finding work.
California’s economy has recovered jobs lost during the pandemic, albeit in October unemployment rate 4% was slightly higher than the national average of 3.7%. But the leisure and hospitality sector was still there a little lower its level before the February 2020 pandemic.
Analysts are unclear how many of those jobs will return.
“Many new jobs are in sectors that differ from those where job losses have been most acute,” said the latest state economic forecast by the UCLA Anderson School.
It says about 80% of the “missing jobs” are in leisure and hospitality, as well as education and other services.
The report, released in September, forecast the unemployment rate to average 4% this fall, rising to 4.4% next year and 4.8% in 2025.