The road to pandemic unemployment benefits in Maryland is long and fraught with difficulties. Applicants endure endless processing delays and unanswered calls, and tens of thousands of Marylanders have endured lengthy delays waiting for the Maryland Department of Labor to process their applications for benefits. If you call the claimant hotline today (667-207-6520), chances are high no one will answer your call. Even if you finally gain access to benefits, the department may demand you pay them back, threatening possible legal action via inexplicable and abruptly assessed overpayment notices.
The system is broken. It must be fixed, as countless hearings before the General Assembly unquestionably revealed. Yet, instead of working to solve these systemic failures, Gov. Larry Hogan is adding insult to injury with a recently announced decision to end pandemic unemployment benefits. This decision is not only shortsighted and arbitrary; it is contrary to research demonstrating that such benefits boost spending and do not cause people to refuse work. It is also cruel, depriving critical relief to those who need it the most.
Pandemic benefits represent a lifeline for more than 300,000 Maryland workers. One pandemic program provides unemployed families with an extra $300 a week in income, while another offers benefits to those typically ineligible for unemployment. These funds help cover necessities like food, rent and medical costs. And the need is great. During the week of May 22, for example, claims for pandemic benefits comprised 83% of the total unemployment claims in Maryland.
Although Maryland’s COVID positivity rates have fallen and vaccination rates have improved, the need for these benefits remains. Maryland has not fully recovered from the recession caused by the pandemic. Maryland’s unemployment rate of 6.2% is just above the national average and is nearly double its pre-pandemic unemployment rate of 3.5%. One jobs deficiency analysis — the difference between current employment levels and expected levels had job growth aligned with population growth — indicates that Maryland is 149,000 jobs short of optimal levels.
The governor’s decision is all the more troubling considering that pandemic benefits are an ideal policy response to the current economic situation. First, they are completely federally funded, meaning it costs Maryland nothing to pay benefits to Marylanders who cannot find suitable work. Second, they stimulate the economy. Relatedly — and contrary to the narrative suggesting workers are choosing to stay home and creating a labor shortage — pandemic insurance benefits increase spending without significantly impacting rates of reemployment. Third, Congress recently extended the benefits until September 2021 because of their effectiveness at combating the continued economic insecurity caused by the pandemic. By some estimates, unemployed Marylanders stood to receive $1.9 billion in federal pandemic benefits between now and September. With the stroke of his pen, Governor Hogan is leaving free money on the table and choosing not to help lift families out of poverty or stimulate spending in the economy.
Governor Hogan instead creates and purports to knock down a straw man, citing the “critical problem” as a supposed widespread “worker shortage.” In his Maryland, “businesses across our state” are unable to find workers to fill open positions. Yet there is no empirical evidence to support this claim. While there may be an isolated shortage in the low-wage sphere, there is no general labor shortage. And to the extent that hospitality or restaurant workers are not being forced to accept poverty level wages, Maryland should applaud and support them. And it’s worth reminding the free-market supporters that any such isolated shortage is easily remedied: If you cannot find enough workers, you need to raise the wage.
Marylanders have yet to fully get back on their feet from the all-encompassing disruption the pandemic brought. Yet Governor Hogan is pouring salt on the wounds of hard-working Marylanders, many of whom are still hoping and waiting to survive his labor department’s systemic failures to timely pay benefits or its demands to claw them back. The decision is unconscionable: It will exacerbate economic insecurity for the most vulnerable by denying free money to unemployed Marylanders who are still struggling. Governor Hogan must reverse course.
Sally Dworak-Fisher (email@example.com) is an attorney with the Public Justice Center. Benjamin Orr is the founder, president and CEO of the Maryland Center on Economic Policy.