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Letting extra unemployment pay expire would be a disaster

A rushed reopening hurt the economy. So would allowing the $600 weekly benefit end next week.

In Miami July 10, protesters demonstrated against restaurant restrictions.
In Miami July 10, protesters demonstrated against restaurant restrictions.Joe Raedle/Getty

In late March, congressional Republicans and Democrats paused their civil war just long enough to approve the CARES Act, a $2 trillion rescue package for an economy that was collapsing at a frightening pace.

Four months later, it’s time for them to do the right thing once more.

A key piece of that emergency spending — $600 a week in extra unemployment pay — is set to expire next week, even though we are still in an economic emergency and the bonus has become indispensable to many of the 33 million Americans receiving jobless benefits.

“I depend on the $600 to put food on the table and make sure the lights stay on,” said Wayne Steed, 33, a cook from Roxbury who was laid off by the Renaissance Boston Waterfront Hotel when it closed in March.

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When the GOP-controlled Senate comes back into session next week, it will have just a few days to extend the program, officially known as Pandemic Unemployment Compensation, change the terms, or let it end as scheduled on July 26. The House, where Democrats hold a majority, has already approved legislation that includes an extension through January.

Despite a modest recovery since mid-April, the country remains mired in the deepest economic morass since the 1930s, and the cause — the coronavirus pandemic — is only getting worse. The enhanced jobless pay is putting an estimated $15 billion a week into the pockets of consumers, including $528 million in Massachusetts, according to a report last week by the Century Foundation.

Much of that money flows back into the economy in the form of consumer spending, increasing revenue for businesses and helping some of them rehire laid-off workers.

It would be cruel and counterproductive to turn the spigot off now. Millions of Americans would needlessly suffer. The economy would take another hit.

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“After many weeks and multiple analyses of this income stabilization measure, we know that it’s more likely to be increasing than decreasing employment,” said Indivar Dutta-Gupta, co-executive director of the Georgetown Center on Poverty and Inequality.

President Trump and some GOP lawmakers say the weekly bonus is too generous and discourages recipients from returning to work. That does happen, according to economists, but far less than the politicians would have us think.

“There are just not many new jobs to move into,” said Megan Greene, a senior fellow at Harvard’s John F. Kennedy School of Government.

If anything, Pandemic Unemployment Compensation exposes the inadequacy of standard jobless benefits, which are funded by the states. Massachusetts has the highest average payout — $533 a week, compared with $333 nationally, according to the Center on Budget and Policy Priorities — but even that isn’t always enough for people to get by without making tough sacrifices.

Steed, the out-of-work cook and the father of three, gets about $400 a week from the state, just 40 percent of his regular pay at the hotel. The extra $600 from the feds makes up the difference, which is what Congress hoped for when it created the program, though many people still see less than a dollar-for-dollar payout.

Nora Lainez is receiving $900 a week, more than twice what she earned cleaning vegetables at a food distributor. But I’d argue that her plight shows just how impossible it is to live on her usual pay.

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The Chelsea resident was forced to stop working when she fell sick with COVID-19. By the time she recovered her job was one of the hundreds of thousands of jobs that disappeared as the state shut down.

Lainez, 46, said she wants to work but hasn’t been able to find a job. Her husband also got the virus — Chelsea was the state’s hottest hot spot — and their landlord kicked them out of their apartment.

They are using the extra money from the government to pay off bills that always piled up when she was working, and cover the $2,000 a month rent on their new apartment. They are trying to get their heads above water for once.

“Losing the $600 would be devastating for the family,” said Lainez, who otherwise would have to survive on state benefits of $300 a month.

Costly pandemic jobless benefits aren’t the problem here. It’s the mismanagement of the health crisis by the White House and many states. The rush to reopen before getting the virus under control has backfired. Now many states are reimposing restrictions that will push back any return to more normal routines.

“As long as it’s not over from a pandemic perspective, it’s not over from a economic perspective,” said Greene, the Harvard fellow.

You don’t have to tell that to Jack Milligan.

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The Jamaica Plain resident was making $900 a week as an after-school teacher until his Brookline school closed. While he’s receiving about $100 a week more in unemployment thanks to the extra federal cash, he would “trade it in a second” to return to work — but only if it’s safe for him and his kindergartners and first-graders.

“The only thing keeping me from working is the pandemic,” said Mulligan, 35. “I went to the grocery story today. They don’t even allow the salad bar to be open, but they want us to go back to school?”

Shuling Liang is accustomed to losing her paycheck during the summer, when the university cafeteria where she works is closed. But in years past she would find a part-time employment and her teenage children would get a summer job. They’d get by.

Not this year.

“This is a very difficult time for everybody,” said Liang, 56.

But the Boston resident is trying to stay positive, even though she’s not sure she will be called back in the fall to the cafeteria.

“It’s hard to see what the future looks like. We have to take day by day,” she said. “The safety net is even more important now.”

Congress should listen to Liang. It’s no time to be pulling the safety net of extra jobless pay out from under tens of millions of vulnerable Americans.



Larry Edelman can be reached at larry.edelman@globe.com. Follow him on Twitter @GlobeNewsEd.