The end of federal unemployment benefits approaches for as many as 116,000 Coloradans at a time when the economy is gaining its footing and desperate employers are advertising thousands of jobs.
Although the positive economic signs will likely provide job prospects in the long-term for thousands on unemployment, it’s the uncertain short-term future — which also includes the surge in the coronavirus delta variant — that is keeping recipients awake at night.
And it’s not just the loss of federal money being cut off after Sept. 4.
Much of the concern is centered on the state’s online benefits system and its ongoing issues with glitches, surprise overpayment assessments and missing payments that have left some in dire situations. Those problems are compounded by unreliable and unhelpful customer service, many claimants say.
“I literally eat one meal a day,” 48-year-old Kailey Kaminsky said of the impact of her federal pandemic benefits first being siphoned off by a fraudster and now being withheld entirely while an investigation plays out.
Support from family members and friends inviting her to house and pet sit is all that has kept Kaminsky from sleeping in her car while she has waited for support through the federal Pandemic Unemployment Assistance, or PUA, program, she said.
The people facing a loss in federal payments next week fall into two categories, Colorado Department of Labor and Employment officials say. There are people who are collecting benefits through the state’s unemployment insurance program that are also receiving an extra $300 in boosted federal support. With an average weekly benefit amount of $380 before the boost, those people are face getting by on much tighter incomes if they do not find jobs.
The larger group facing an even steeper cliff are those like Kaminsky who are enrolled in dedicated federal programs that provide income before the boost payments. Just over 87,000 people are in that group, by labor department estimates. Come Sept. 4, they will receive no support at all.
Trudy Carra-deSalero falls into that category. She has access to Social Security. Not that that will take her very far when her $365 in weekly Pandemic Emergency Unemployment Compensation, or PECU, benefits end.
“That’s not even enough to pay my rent,” she said of her Social Security.
She is concerned that when federal support ends, the state will lock people out of the unemployment accounts. She knows people who are still trying to claim back-dated benefits from 2020. Others are facing overpayment assessments and are fighting them, seeking refunds that the state system hasn’t been able to produce as of yet.
CDLE officials say that the state will continue to investigate overpayment issues even after the federal programs end and is working on getting refunds to people.
“We are currently refining our internal system reporting to provide an accurate picture of true PEUC and PUA overpayments while excluding potential fraud,” an unemployment division official said in an email to The Denver Post. “At this time we have begun the process to activate the refund functionality within the MyUI+ system.”
Out of work since February 2020 when the restaurant where she worked as a server shut down, Carra-deSalero said that rental assistance funds kept her in her apartment. She has been circulating resumes but she fears that are her age, retirement may be her only option.
“I’m turning 65 next month and the chances of me being hired by a restaurant are slim to none,” she said.
She is skeptical of the idea that cutting off federal support will drive scores of workers into the waiting arms of employers that have been struggling to hire.
Colorado’s unemployment rate ticked down from 6.2% in June to 6.1% in July, but it remains above the national rate of 5.5%. The labor department had 122,000 job listings on its Connecting Colorado web portal as of last week.
“As we get closer and closer to that week ending Sept. 4, we continue to direct claimants to resources that will help them successfully return to the workforce,” Phil Spesshardt, the director of CDLE’s unemployment insurance division, said during a news briefing earlier this month.
Carra-deSalero questions the reliability of Connecting Colorado job availability numbers.
The massive federal stimulus efforts mobilized during the COVID-19 pandemic made the recession it caused unique, Brian Lewandowski, executive director of the business research division at the Univerity of Colorado Leeds School of Business said.
Rather than seeing household incomes fall, boosted unemployment programs, one-time stimulus payments and other federal spending intended to keep the economy afloat actually helped boost personal income, preserving people’s ability to buy goods.
“So there is some concern that it is wearing off too soon before the economy is back on solid footing,” Lewandowksi said of those stimulus efforts.
More than 20 states opted out of the federal unemployment boost payments early, before the impending nationwide cutoff. Most of those states have unemployment rates that are lower than counterparts the kept the benefits in place, according to Leed School research, but that’s only part of the story. Many of the early opt-out states are also seeing slower economic growth.
Those growth disparities can’t be attributed to a single factor, Lewandowski emphasized. Hawaii has the fastest-growing economy in the country and that can largely be attributed to booming tourism.
It’s too early to say if the end of federal unemployment is driving Colorado’s recent hiring surge, something that caused Lewandowksi and his colleagues at CU to revise up their job growth estimates for the state for this year.
“But I think we would be naive to think that those federal benefits aren’t holding some people back from going back to work,” he said.
Boosted unemployment wasn’t a factor in any decision for Kailey Kaminsky. She moved to Denver from Virginia for a job this spring. That situation eroded and she found herself out of work in mid-June. After at first being told she was ineligible for state benefits, Kaminsky was allowed to enroll in the PUA program. She received one payment in July and then the money stopped. She found out a fraudster had altered her payment information. That discovery did not fix the problem.
Even after changing her banking information in her claim and filing reports with Denver police, the FBI and the Colorado Attorney General’s Office, the next two payments still went into the fraudulent account. Shortly thereafter, Kaminsky got a letter from the state saying she didn’t qualify for benefits at all and found she had an overpayment balance. She was stuck.
“It got the point where I was desperate because I couldn’t get food assistance because they said I made too much in unemployment,” Kaminsky said.
Finally, after getting by with help from friends and family, Kaminsky found a new job. She started at an office position downtown this week. She was approved for an apartment on Friday.
By her count, the labor department still owes her roughly $7,000 in back benefits, money she needs to pay back friends and family and catch up on car and phone bills.
She finally was able to schedule an in-person meeting with a department official last week but that was of no help either. The official suggested Kaminsky should have applied for benefits in Virginia instead of Colorado, but that was new information to her after months of back and forth with department officials.
“If I would have had I gotten a letter saying if earned this money in Virginia and you need to apply there, I would have,” she said. “I wasted more than two hours at my two jobs to learn nothing.”
If the state can write off millions of dollars in fraudulent payments during the pandemic, they should be able to make claimants whole, Carra-deSalero said. The end of the federal programs doesn’t change that.
“There seems to be no accountability, ” she said. “I would feel better if they came out and said, ‘We (messed) up.’”
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