Michael Patterson was ready for his unemployment benefits to end on December 26. It wasn’t his hope, of course, but after what he’s seen this year, he was prepared this time around.
As an independent makeup artist, he was hit hard by the pandemic.
“I literally saw about three months of scheduled work canceled within probably 72 hours,” said Patterson, referring to when the pandemic first exploded last spring.
Under the CARES Act, passed by Congress in March, he was eligible for unemployment benefits through the Pandemic Unemployment Assistance program. It covers gig workers and contractors like himself, who normally wouldn’t be eligible for unemployment insurance.
With the extra $600 a week the government provided as part of the same legislation, he was able to stay on top of rent and bills. But that $600 evaporated when the program came to an end on July 31, leaving him even more dependent on the federal government’s other unemployment assistance.
“I really felt that in the bank account,” said Patterson, who’s worked with celebrities like Danielle Brooks, Giuliana Rancic and Amal Clooney. “It trickled into my personal life too, affecting my mental health. But, basically, my mindset was, ‘Fool me once, shame on me. Fool me twice—it's not gonna happen.”
That’s why he braced himself for December 26, the date when the Pandemic Unemployment Assistance (PUA) and the Pandemic Emergency Unemployment Compensation (PEUC), which extended unemployment benefits for regular employees, were scheduled to end.
But on Sunday night, President Donald Trump signed the $900 billion COVID-19 relief and $1.4 trillion omnibus spending bill to fund the government, narrowly avoiding a midnight shutdown deadline. His signature came after days of stalling, as members of Congress from both parties urged him to move the bill forward.
The bill was passed after Congress negotiated for months with the Trump administration and with what lawmakers had thought was his blessing. Over the past week, however, Trump came out against the bill, demanding the $600 relief checks increase to $2,000 and a scaleback of spending overall.
Millions of Americans benefiting from two federal relief programs that began in March would have been negatively impacted by the sudden loss of assistance, including the 1.2 million New Yorkers whose only source of unemployment has been the PUA. Though President Trump signed at the 11th hour on Sunday, it’s still unclear whether there will be an interruption of benefits. Millions of Americans may lose a week of pay since the two programs technically expired before President Trump signed the bill.
The state Labor Department didn’t directly answer our question on this and instead directed us to a Twitter thread.
Thanks for your patience as we work behind the scenes to update systems & get guidance from US DOL.— NYS Department of Labor (@NYSLabor) December 28, 2020
Our reps are focused on providing services for your fellow NYers - please allow them to do so by holding questions about the relief package until we update our online resources.
Update: Gov. Andrew Cuomo announced Tuesday there would not be a delay and that New Yorkers would receive the new benefits next week.
Independent contractors, like Michael Patterson, would have been harmed in particular without the passage of the relief bill.
“My estimates are that about 600 to 700,000 New York City residents were receiving PUA,” said James Parrott, director of economic and fiscal policies at The New School Center for NYC Affairs. “Those workers would have been totally out of luck if there hadn't been an extension of those benefits.”
For New Yorkers receiving regular unemployment benefits, they would have still been eligible for up to 20 weeks under an extended benefits (EB) program. But now with the passage of this recent relief bill, residents of New York State are eligible for an 11 week extension on top of the 20 additional weeks under the EB program.
In addition to an 11-week extension, unemployment insurance recipients will also receive an additional $300 a week.
While it’s half of the additional assistance people were receiving earlier this year, it’s still going to make an impact.
“With me budgeting everything out, that extra $300 will allow me to cover rent and cover minimum payments on bills and credit cards,” said Patterson who moved into a new apartment in Hell’s Kitchen not long before the pandemic hit. “I've maxed out all of my credit cards during this pandemic, so I'm at all of my limits, essentially.”
His financial situation is why he decided to launch a small business selling artisanal bath products. It’s part of how he prepared for unemployment benefits potentially ending after Christmas. After months of research, he launched his Etsy store earlier this month. In his first week, he made over $1,000 in sales, he said.
While the last minute signing by President Trump may provide relief for individuals and small businesses, who will benefit from the extension of the PPP small business lending program, New York City will still struggle without any federal assistance.
“What was not in this economic assistance package was any fiscal relief for state or local governments,” said Parrott. “And that's a big shortcoming of the bill.”
The State of New York is projecting $59 billion of revenue shortfalls through 2022 because of the continuing coronavirus crisis, one of the biggest funding deficits in the country. And New York City is projecting a $13.2 billion budget gap over the next four years.
“The threat is pretty significant reductions in public services, including education,” said Parrott. “There are a lot of people who are falling through the cracks. Despite all the various forms of assistance in this recent federal bill, there's still a big issue with tenants and small businesses and their ability to pay back rent. The ability of the city and the state to respond to that really dire economic need is going to be severely limited if there's no federal fiscal relief.”
With a new incoming administration, however, experts are expecting relief to come soon. But a lot still rides on the outcome of Georgia’s runoff elections on Jan. 5, which could tip the balance of control in the Senate.
Meanwhile, the stimulus bill will provide relief until the extended benefits end on March 14.
“It helps financially, but I've even noticed that mentally I feel more positive,” said Patterson, who predicts he could have only gone a matter of weeks without working if unemployment assistance ended. “And at least, you know, this will get me by, and, hopefully I'm not going to jinx it, but hopefully January 5 in Georgia, then Biden on January 20th—then we'll be set.”