Sean McCleary has been furloughed since March. A restaurant server in Durango, he was stuck collecting unemployment at home for months while his wife worked remotely. But in June, he traveled to his parents’ home in Lancaster, Pennsylvania, to care for his father after open-heart surgery.
“I’m helping my parents clean out their house,” McCleary said. “I originally came back for his open-heart surgery and saw my parents in need and decided to stay and help a bit.”
McCleary had been collecting federal unemployment assistance offered through the CARES Act, but after the benefits expired last week he has lost that income. He also has to provide proof that he’s looking for a way to become employed to receive state benefits, which is difficult during this time.
“Since I’m not in Durango to apply for jobs, I can’t really do that right now, so I’m taking a hit financially,” McCleary said. “I did a pretty good job of saving that unemployment money when I was getting it because I figured this kind of situation would happen eventually.”
McCleary is one of 330,000 Coloradans currently on unemployment assistance during the novel coronavirus pandemic. As Congress debates how much assistance should be provided through the remainder of 2020, many furloughed workers who have yet to return to work must weigh keeping up to date on bills and necessities with returning to work in the middle of a public health crisis.
Dave Woodruff, owner of El Moro Tavern, said the robust federal unemployment assistance has so far been a double-edged sword for his business. While many people slowed their spending during the initial months of the pandemic, research by the federal Bureau of Economic Analysis found that personal income increased by more than 10% in April thanks in large part to assistance from the CARES Act.
That additional income has translated into business for restaurants that may otherwise go without customers in leaner times, but it has also made luring workers back to partially reopened eateries more difficult.
Republicans and Democrats in Washington are attempting to close the gap between the $200 per week unemployment assistance offered by Republicans and $600 per week offered by Democrats. That’s part of a broader re-examination of what relief efforts have provided Coloradans with so far, and what may still be needed.
“You see this from both sides of the coin: $600, while difficult to get people back, it’s nice to have that money infusing the economy,” Woodruff said.
Business leaders have supported a variety of resources to those who may need them. Sen. Michael Bennet, D-Colo., has proposed assistance to the service industry under his RESTART Act. The bill would offer seven-year partially forgivable loans to businesses that would cover six months of expenses, including payroll, and would be available to businesses that have sustained losses over 25%.
Woodruff, meanwhile, is a supporter of the RESTAURANTS Act, which would provide $120 billion in assistance and has been co-sponsored by Sen. Cory Gardner, R-Colo. Woodruff said businesses were stymied by the complicated and changing terms of the original Paycheck Protection Program loans offered in April, and he’d like to see something more tailored to his industry.
“I think for some businesses it could be a potential benefit, but I think for others, the way they’re stratifying it, it’s going to be harder to qualify for some other businesses,” he said.
Jack Llewellyn, executive director of the Durango Chamber of Commerce, said he would also like to see lower federal unemployment benefits to urge employees to get back to work.
“The generosity of the unemployment offerings from COVID have kept a lot of the employees from wanting to go back to work,” Llewellyn said. “A lot of them have made comments, ‘I could make more money on unemployment, why would I go back to work right now?’”
Research on the effects of expanded unemployment benefits in dire times indicates that the situation is more complicated than getting workers back to their old positions. Cutting that extra income when sales are already weak could reduce demand in the overall economy. An analysis by the Economic Policy Institute found that cutting the $600 would remove support for 66,898 jobs across Colorado over the next year.
There is some evidence that unemployment benefits have historically improved real gross domestic product during tough times as well. Research done by Wayne Vroman of The Urban Institute in 2010 found that states with higher unemployment provided to residents during the financial downturn experienced higher levels of GDP over the same period.
Meanwhile, nonprofits like the Durango Food Bank are worried that a loss in unemployment benefits will put a further strain on its services. Since April, the number of clients served by the food bank has increased by 130% per month on average over the previous year. It has also had to spend $41,000 on food purchases to keep up with high demand and reduced donations.
“We are absolutely concerned about even more need as unemployment benefits decline,” said Executive Director Sarah Smith. “Our current capacity within our facility is maxed out and we are desperately trying to find a short-term solution to lack of space that will allow us to get through the upcoming winter months.”
For workers like McCleary, the question isn’t a matter of economics but of basic health and safety. He said he would welcome additional assistance from the federal government. Otherwise, he may put his graphic design degree to use and look for freelance gigs to supplement his income until it is safe to return to work because he doesn’t think it is safe to go back.
“Yes, it’s harder to want to go back to work when there’s $600 a week, but at the same time ... do I really want to be risking myself and my loved ones and even customers themselves?” McCleary said. “For me, that’s the biggest scare, to be that person to deal with a guest that has COVID and then passes it around to other guests.”
Jacob Wallace is an intern for The Durango Herald and a student at American University in Washington, D.C.
