There’s No Debate; Southern States Need Congress to Extend CARES Act Unemployment Benefits
Last weekend, after failing to negotiate a new deal for American families, the President signed an executive order pledging to spend up to $44 billion in emergency funds for partial unemployment relief. Putting aside questions of whether the order is legal, this sum is grossly insufficient to meet the needs of working families where SPLC is based in the Deep South (Mississippi, Louisiana, Alabama, Georgia, and Florida) and will be impossible to implement in our states. The President’s vain, empty promises are the last thing we need when millions of people in this country are on the brink of financial ruin. Our families need – and deserve – a comprehensive relief package.
The relief called for in the executive order is meant to support those families struggling amidst a pandemic that now exceeds 5 million cases and 162,000 deaths under the President’s failed leadership. It would require states to fund a quarter of weekly $400 payments to those out of work – assuming the entire payment once the emergency fund runs out. It would also put many Southern communities at further risk by depleting funds reserved for disaster relief during a season in which forecasts predict 25 named storms and half as many hurricanes.
The Deep South has some of the least supportive unemployment benefits systems in the nation. On average, our states pay nearly $100 per week less than the national average. Mississippi and Louisiana provide the second and third lowest support in the nation, respectively, and $300 less per week than the most supportive unemployment insurance systems in the United States. Georgia and Florida give the fewest weeks of support, providing half as many weeks of unemployment benefits as forty-six other states, the District of Columbia and Puerto Rico.
Federal unemployment dollars filled the gap when our state governments failed to support our families. In the CARES Act, Congress created three new sources of relief – Pandemic Emergency Unemployment Compensation, Pandemic Unemployment Assistance, and Pandemic Unemployment Compensation – that extended the length of unemployment benefits, expanded who could receive unemployment benefits by including the self-employed, contractors, and gig workers and increased the amount of support that everyone receiving unemployment receives.
The critical impact these funds have had is hard to underestimate. In Florida alone, federal unemployment support accounted for 79% of the $10.4 billion in unemployment benefits paid since March 2020. For context, this is roughly 1% of Florida’s GDP in 2019. Viewed another way, during the last week in July, federal support from the Pandemic Unemployment Compensation (that $600 per week) injected $1.1 billion into the Alabama, Georgia, Louisiana, and Mississippi economies. Most of that money goes directly to rent, groceries, and other necessities that keeps our local businesses afloat.
Unemployment benefits have saved Southern economies and more importantly, Southern families. The President’s proposal does not replace the support that the White House and Senate allowed to expire. It shifts a quarter cost onto states, whose tax revenues have fallen sharply since March, making the idea that workers in the South will see any meaningful relief a fiction. We have seen budgets for basic services slashed; there is no additional unemployment support coming from our statehouses.
Even if our states found a way to fund their portion, the federal government’s would quickly expire. The best estimate we have for the last week of July shows that the US spent $18 billion on the additional unemployment support (PUC) it provided to families. With only $44 billion available, the wholly inadequate amount proposed in the executive order would expire in less than five weeks if the number of people receiving unemployment support remains constant.
The President and Senate leadership need to find a real solution before it is too late. Working families in the South do not have time for more hollow gestures and debate.
Photo by Susan Walsh/AP Photo
