Two million Californians lost their unemployment benefits last September when four pandemic-era federal programs ended. Some workers scrambled to find jobs, just as employers had hoped. But others, who’d been trying to find steady work for months, had their safety net pulled out from under them.
“It was a lot of people who had really been trying to re-enter the workforce and just hadn’t found that steady employment yet,” said Daniela Urban, executive director of the Sacramento-based Center for Workers’ Rights. After the federal programs ended, Urban and her organization found themselves in triage mode, connecting unemployed workers with homeless prevention services and CalFresh just to meet their basic needs.
“For most of the people that we were talking to,” Urban said, “this had been the exclusive monetary support for them and their household.”.
When Washington stopped paying emergency unemployment benefits last year, workers in California who were Black, older or less educated were disproportionately hurt financially, according to a new California Policy Lab study released Thursday.
Unemployed people were eligible to receive up to 53 weeks in jobless benefits under the federal Pandemic Emergency Unemployment Compensation (PEUC) program, created in March, 2020, as the Covid pandemic sent the economy reeling..
“Our analysis,” the report noted, “suggests the extension was disproportionately a lifeline for less-educated workers, Black workers and workers over the age of 64.”
Till von Wachter, a co-author of the study and faculty director of the California Policy Lab’s UCLA site. said, “Throughout the crisis, the most vulnerable workers have fared worse, including when you look at who was more likely to be receiving benefits under the PEUC program when it was discontinued.”
A month earlier, three of four unemployed workers in the state were receiving either regular or PEUC payments. By October, that percentage tumbled to 26%.
Yet unemployment remained above the national average, and the study suggests that in California, and in other such states, “the majority of workers who stopped receiving unemployment insurance benefits did not find jobs in the ensuing months.”
In California, Black workers made up a higher share of PEUC claimants.
As a result, “Black claimants were disproportionately impacted by the expiration of PEUC,” the report found.
Also claiming PEUC benefits at a higher rate than regular benefits were people with a high school diploma but no college degree. And PEUC claimants were about 34% more likely to be over 64 than people receiving regular unemployment benefits. There were also more women than men receiving PEUC when it ended.
Workers who had been receiving PEUC benefits were hit especially hard when another wave of Covid hit around the holidays in 2021, ushering in another round of layoffs. This time though, many workers couldn’t qualify for a new unemployment claim and were left to endure hard times on their own.
“Even if they had gone back to work after the extension of the benefits ended,” Urban explained, “the earnings requirement made it difficult for people to qualify for a new claim until mid-2022.”
During the pandemic, Washington created different 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 extra weeks of benefits as the economy continued to struggle.
Eighteen states chose to end the PEUC program early, with many governors contending that the benefits discouraged people from seeking work. But the study found that about 3.1 million people lost access to the benefits without finding jobs.
California’s economy has recovered jobs lost during the pandemic, though the October unemployment rate of 4% was slightly above the national average of 3.7%. But leisure and hospitality sector still was slightly below its February 2020 pre-pandemic level.
It’s not clear to analysts how many of those jobs will return.
“Many of the new jobs are in sectors different from those where job loss was the most acute,” said the UCLA Anderson School’s latest state economic forecast.
It said about 80% of the “missing jobs” are in leisure and hospitality as well as education and other services.
The report, issued in September, predicted the unemployment rate this fall would average 4%, rising to 4.4% next year and 4.8% in 2025.