But at the same time, poverty rose more than 2 points nationwide between June and November to 11.7%, the fastest jump in history, according to a study by the University of Chicago and the University of Notre Dame. The largest increase previously recorded was 1.3 points between 1979 and 1980, during a deep recession caused by a spike in oil prices.
The recent increase of 7.8 million more people in poverty hit minorities and those without a college education the hardest, along with residents of states with less effective unemployment systems, said Bruce Meyer, a co-author of the study and University of Chicago professor of public policy.
While the unemployment rate has dropped since its springtime high—the rate declined from 14.7% in April to 6.7% in November — low-wage restaurant and hospitality jobs have been slow to come back, and many of those employers are now shutting down again as the virus surges.
Even people able to get government help may have fallen into poverty as extra jobless aid expired, Meyer said.
“Those payments were a long time ago. There’s a lot of people who have been out of work since the spring,” Meyer said. “They used up their savings, stopped paying bills and borrowed money from family and friends. Now they’re cutting back on groceries and those bills are really starting to accumulate. Their situation has gotten a lot more dire.”
A coalition of progressive groups is calling for more help for jobless workers excluded from typical unemployment benefits, including immigrants or recent graduates who haven’t built up enough time in the labor force to quality for unemployment benefits, and therefore the supplemental payments.
In a Dec. 17 report, the left-leaning Economic Policy Institute and National Employment Law Project called on states to start relief funds to “provide financial assistance for unemployed immigrant workers and other jobless workers shut out of unemployment insurance programs.”
A petition for such a plan, which would raise taxes on wealthy residents to provide $3.5 billion for excluded workers, is circulating in New York state, and a similar bill was proposed in the state Assembly and Senate. Both bills are still in committee.
“While our communities die during the pandemic, [rich New Yorkers’] wealth keeps increasing,” said Assemblywoman Carmen N. De La Rosa of Manhattan in a December news conference supporting the bill. In the New York City area, 43.7% of people had trouble paying bills in December, up 10.7 percentage points since August.
City and state revenue have declined during the pandemic, making aid to workers excluded from payments a hard sell. Washington, D.C., considered a $33 million fund, but it was deemed too costly. In April, the city’s convention authority approved $18 million for hospitality workers, including $5 million for immigrants without legal status.
Immigrants are a large share of the people not receiving aid. Others include people with criminal convictions, new graduates without a work history, and people who have experienced gaps in employment, said Paul Sonn, state policy director for the National Employment Law Project.
For instance, of the 500,000 people who applied for extended unemployment in North Carolina during the pandemic, 140,000 were denied.
“All kinds of people are falling through the cracks in the unemployment insurance system, and almost all the federal assistance programs piggyback on state unemployment,” Sonn said. “So, for them there’s no safety net, no stimulus checks.”
Hospitality workers in low-wage jobs, already struggling before, are even more financially stressed on unemployment benefits that pay even less.
Damani Varnado, a New York City actor who supplemented his sporadic voiceover and acting gigs with a server job at a Tribeca restaurant, has been behind on rent and utilities since work dried up on both fronts in February and March.
“I’m living within my means, negotiating with my landlord because I don’t want to fall too far behind, and trying to hang in there because there is light at the end of the tunnel and I want to keep living in New York,” Varnado said.
Some of his friends get only $100 a week or less because their nominal pay was less than minimum wage, a practice banned in some states but not in New York. Varnado is a board member for One Fair Wage, a group lobbying to raise wages for tipped workers and fundraising to help such workers.
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