Odirus Charles holds a sign reading, "I Am angry as hell Fix unemployment Now" as he protests against the government in Miami Beach, Florida on May 22, 2020. Joe Raedle/Getty Images
Americans are now faced with the challenge of paying their bills after unemployment insurance ended.
States are now requiring people to repay their unemployment benefits.
This is causing people to wonder how they should live.
Eoin Higgins, a journalist in New England, is an opinion writer for Insider.
This column is an opinion piece. These thoughts are solely the author's.
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Brandel Cook lost work during the pandemic, and was forced to take unemployment. The state of Missouri now wants him to repay $4500.
Cook said that they wanted me to repay $900 for state benefits. That was $67 per week [$75 pretax] and Federal Pandemic Unemployment Compensation ($3,600/week). Cook spoke to me in a recent interview.
Cook's tale is just one example of many. People have been complaining for months about unfair demands to repay unemployment benefits. This has happened as the country tries to end the COVID pandemic.
TikTok user thatgirlkelsie_98 became viral in February for a video she posted in which she disbelieved a request from the state to recover $4,620 of $10,000 she received in benefits. She said, "How is anyone supposed to fuck living" in a system where debt is a way of life even during a global pandemic?"
The country is experiencing instability and pain from the repayment demands. Due to the unpredictable nature of the virus, and the cash crunch resulting from the premature closing of unemployment benefits, the US economy will see a drop in consumer demand.
Many Americans working in America are worried about their financial future as the spread of the delta virus continues to rise and the government enforces stricter regulations to stop the pandemic. It is only making matters worse by telling them that they must repay some of the benefits they received during the pandemic. These repayment demands were made to me by people I spoke with. Here's what they said.
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More problems, less money
Many state unemployment systems are outdated and overwhelmed by the flood of claims for unemployment that erupted during the pandemic. These same flawed systems are now able to flag some of these payments, whether they were made months or years later, as incorrect or because the applicant submitted an error.
A July report by the federal Government Accountability Office states that $12.9 billion in overpayments were made to the Treasury during the pandemic. This is just 2% of all the unemployment funds sent during that period. The same report states that only a fraction of the overpayments are due to fraud. However, most were simple accounting errors or clerical errors.
Instead of trying to find the fraudsters, the government insists that workers - many still in precarious financial situations - repay the money.
Cook, who now lives in Neosho, Missouri was working as a bartender for a local movie theatre when COVID struck. Cook lost his job due to the pandemic, but state unemployment and federal unemployment helped him get through it. On March 27, 2021 Missouri determined Cook was not eligible for the benefits he received because of limited availability.
Cook stated that the Overpayment Determination said that the overpayment was due to my unintentional error or omission. "I don't know how this could have happened, and I'm certain I filled out the weekly application correctly."
Cook said that although he was not contacted about the error, he did receive an email at 2:01 a.m. informing him that he had received new correspondence from the unemployment department.
He can appeal until September 23.
However, appeals can take time, as Jennifer Reyes (a restaurant worker in Ohio) discovered when she tried to appeal the state's efforts to recoup the unemployment benefits it had paid her. Reyes was out of work for a short time, from March 16th to May 26th 2020. But the benefits that she received to help her survive were still vital. Now she is being asked to repay it all.
She told me that they claimed I owed them 100% of my UI back, which is approximately $5,000. "My job was shut down, and I'm now high-risk."
Jennifer called several times and was finally connected online to make an appeal. This appeal is currently being processed. Although she hopes that it will go her way, Jennifer said that it was a "pain" that it is and that it's deliberate.
Jennifer stated that she believes the state hopes enough people will panic about garnishments so they can get some money back. It's bullshit.
An unfair demand
Since the outbreak of the pandemic, unemployment insurance has been a major political issue. Although the financial aid was vital in keeping people alive during the spread of COVID, many employers and conservative politicians called for the end to the benefits to allow Americans to return to work.
James Gop, the owner of Heirloom Fire catering company, wrote on Facebook that "the extra unemployment benefits must be immediately ended." "Businesses are in terrible straits."
Gop, a pioneer in farm-to-table innovation who has been featured with Martha Stewart and on Netflix's “The World's Most Amazing vacation Rentals”, may find the idea that people continue to use benefits disgusting. However, this life-saving aid has helped keep our economy going and their importance has increased without them.
Insider reported August:
The 20% reduction in weekly spending by individuals due to the removal of those benefits resulted in $145 per week less. The jobless workers suffered a huge loss in their pockets, losing $278 weekly benefits and only earning $14 per week.
The researchers concluded that for every dollar spent on benefits, spending fell by $0.52. Each dollar lost saw a $0.07 increase in income. This translated into a $270million increase in earnings across the US, but a decrease of $2 billion in consumer spending.
The economic pain isn’t just about the reductions in benefits. The August jobs numbers were below expectations. This raises concerns about the economy's ability to recover from the effects of the delta variant. A small but significant minority of Americans are refusing vaccines.
The federal government's Pandemic Unemployment Assistance, which was already reduced from $600 to $300 per week to help those in most need, ended September 5. Workers are likely to be worse off this year without aid, with no job prospects and states demanding repayments for benefits that they have already received.
Reyes, the Ohio server, said that the drop in the aid had had a noticeable impact on the business at the restaurant where she works.
Reyes stated that "now that the increased unemployment is over, we have seen a significant drop-off in business." Servers are earning at least $100 more per shift than they normally do. We no longer have Friday waits, and Saturday waits are very short. Although we are fully staffed people aren’t coming in.
Instead of requiring Americans to repay the benefits they received during a once in a lifetime crisis, states should demand that the federal government restart the pandemic aid that was discontinued. While the human cost of cutting off the benefits and forcing Americans into paying them back may not be sufficient to make a difference, the economic impact might.
Business Insider has the original article.