Unemployed Marylanders would receive an extra $300 a week in benefits if the state’s application for federal funds is approved, Gov. Larry Hogan said Wednesday, replacing half of what was lost when additional weekly assistance approved early in the coronavirus pandemic expired last month.
[ FEMA agrees to fund extra $300 a week in Maryland unemployment benefits ]
But some economists question whether the amount is sufficient, both for recipients to live on and to boost a still flagging economy. Since the expiration of the extra $600 in weekly benefits, jobless Marylanders have received no more than the state’s maximum of $430 a week.
State officials said the new supplemental benefits would be paid in late September, retroactive to the week ending Aug. 1.
“Half a loaf is better than no loaf,” said Daraius Irani, chief economist for the Regional Economic Studies Institute at Towson University. “But people may find they’re not able to make ends meet and will have to make some hard choices.”
Additionally, some are questioning how Maryland’s already overburdened unemployment insurance division will be able to handle the distribution of the new funds, which will come from a different source, the Federal Emergency Management Administration, or FEMA.
Maryland came in last of all states in getting unemployment payments to applicants in a timely fashion during at least one month this summer, according to the U.S. Department of Labor.
“This is one more thing they have to put into the system,” said Michele Evermore, senior policy analyst with the Washington-based National Employment Law Project. “This is not going to help with the payment of regular benefits.”
Hogan said in a statement that while “Maryland is doing much better” than most of the country in managing the coronavirus and rebuilding its economy, the extra unemployment benefits will help keep it on the right track.
“Far too many Marylanders are still struggling to make ends meet during this pandemic,” he said. “With this critical funding, we can help those struggling Marylanders weather this storm, get back on their feet, and recover.”
The new benefits came about after congressional negotiation to extend the supplemental payments ended in a partisan stalemate. That prompted President Donald Trump to order an extension of $400 a week, with a fourth of that paid by the states. But it was unclear how that would work, and many states said they could not afford to contribute because their revenues were depleted by the pandemic and economic slowdown.
“A number of states indicated that the initial order was problematic, particularly given the lack of additional federal aid from Congress, and the administration offered a compromise involving the use of existing funds,” said Mike Ricci, a spokesman for Hogan.
States were given the option of receiving the $300 from FEMA without incurring an additional expense by counting what they already were paying in unemployment benefits as their 25% share. That is the option Maryland chose in its application.
To qualify for the $300 under FEMA’s Lost Wages Assistance program, claimants must be eligible for a weekly unemployment benefit of at least $100. They also must certify that they are unemployed or partially unemployed due to disruptions caused by the pandemic.
Once FEMA approves the state’s application, the Maryland Department of Labor’s Division of Unemployment Insurance will coordinate with federal agencies to begin distributing the funds, which are expected to continue to Dec. 26.
But Hogan’s statement cautioned that the new Lost Wages Assistance program is subject to change if FEMA funding runs out or a new federal law on extra unemployment compensation is passed.
According to FEMA, seven states have received approval for the extra benefits: Arizona, Colorado, Iowa, Louisiana, Missouri, New Mexico and Utah. Up to $44 billion from FEMA’s Disaster Relief Fund is available for the lost wages program.
Some question how long that money will last, particularly if every state applies. About 30 million Americans or one in five workers are collecting unemployment, according to recent estimates.
Heidi Shierholz, senior economist and policy director with the Economic Policy Institute, a liberal-leaning think tank, said she considers the extra $300 a distraction and a poor substitute for a more comprehensive solution. Unlike the extra $600 in weekly benefits, it is unclear how many states or how many unemployed people will receive the lesser amount, she said.
“People are going to have to cut back,” Shierholz said. “People’s living standards will drop. Evictions will happen. Hunger will happen. This will create a lot of deeply unnecessary suffering.”
Additionally, the drop in spending power will have “macro” effects on the overall economy, she said, because fewer people will be needed to provide goods and services that the unemployed can no longer afford.
Irani agreed. What the country needs, he said, is for the Senate to agree to the House bill calling for the extension of the original $600 in extra weekly benefits.
“I’m a fiscal conservative, but I believe this is when the federal government has to spend money,” Irani said, “because the economy is going to circle down the drain.
“We can afford to give tax breaks to big corporations, but not $600 a week to an unemployed individual?” he asked.
Unknown at the moment is how the state’s unemployment insurance office, already strained by the massive increase in claims it needs to process, will accommodate the new program.
Maryland Labor Secretary Tiffany P. Robinson said in a statement that while it will take some time to implement the new program, applicants would receive payments retroactive to their earliest date of eligibility.
Maryland was the slowest of all 50 states to get unemployment benefits to jobless residents during June, according to U.S. Department of Labor data. That month, just 14% of applicants received their first unemployment benefits within 21 days of filing. In July, that rate rose to more than 23%, worse than all other reporting states save Nevada.
The national average in July was for 62% of applicants to receive their first payments within 21 days, up from 54% in June.
Maryland Policy & Politics
Maryland’s comparatively poor performance likely comes as no surprise to thousands of unemployed residents who have reported frustrating delays, website crashes, jammed phone lines and other problems as they tried to access benefits from the state’s overwhelmed Department of Labor.
Complaints have eased recently though some applicants remain in limbo. Last month, the state labor department said it had processed 96% of the 624,978 claims it received from March 9 to June 27. Most, about 79%, were approved for payments, while 17% were denied. That left less than 4% awaiting a determination, the department said.
State labor officials did not respond to requests for comment on the federal data.
But State Sen. Katherine Klausmeier, who co-chairs the General Assembly’s Joint Committee on Unemployment Insurance Oversight, called it “an embarrassment.”
“We live in a state that is one of the richest around, and we’re doing this to our citizens,” the Baltimore County Democrat said. “It’s tragic.”
Klausmeier is among the legislators who have pressed Hogan’s administration over problems with getting unemployment benefits to the hundreds of thousands of Marylanders who were thrust out of work by the pandemic and subsequent closures. She said she remains unsatisfied with how the state Labor Department has handled the influx of claims and their answers to legislators’ questions.
“There’s not a whole lot of transparency,” she said. “It’s very frustrating. People call, and I can’t fix something if I don’t know what’s wrong with it.”
An earlier version of this story said the extra unemployment payment could be as high as $400 per week. But that would require Maryland to cover $100 of that, which state officials said they have opted against.