$600 in added unemployment halted until lawmakers reach agreement

Coronavirus

KNOXVILLE, Tenn. (WATE) – Many East Tennesseans anxiously await an agreement by lawmakers, as the weekly $600 added unemployment benefit from the federal government expired Friday.

Senate Majority Leader Mitch McConnell (R-Kentucky) proposed a $1 trillion economic relief bill, while House Democrats passed a $3 trillion proposal. While there is broad support for another round of direct payments to most Americans, there are many points of disagreement.

One key issue is how much the federal government should add to state unemployment benefits. House Democrats advocate maintaining the $600 amount. Many GOP lawmakers want the amount lowered to $200, calling it an incentive not to return to work.

Bill Fox, a Professor of Economics at the University of Tennessee at Knoxville, said lawmakers need to pass “some extension” in additional unemployment benefits to continue to offset the massive job loss. He estimated, on average, a person receives between $205-210 in weekly state unemployment benefits in Tennessee. That’s all they’ll receive until any additional stimulus package passes Congress.

Fox said the additional unemployment money from Washington, and the $1,200 direct payments in April, allowed people to spend at a much higher level, which has helped many local governments and some businesses from experiencing “significant” strain.

Fox also cited data by the Boyd Center for Business and Economic Research, which shows 92 of 95 counties brought in more sales tax revenue in June 2020, compared to 2019. He credited the federal help but also improved policies on collecting online sales tax, an initiative that began October 1.

JoAnna Wilde is a general manager at the concourse, a concert, and large event venue. She remembers the business thriving prior to Covid-19, including two sold-out shows in March. Their management team was looking ahead to the spring festival season. “Then the pandemic hit and all of a sudden we had a couple of artists cancel and then things kind of went crazy,” she said.

Insurance, rent, utilities, license fees, and other bills continue coming in, though paying customers are not. “We’re hanging on by a thread. The only reason we’re here right now is because so many people have been generous and donated to a gofundme that we have up, which is really what we’re living off of,” she said.

Because the business doesn’t have a typical payroll, given many of their employees are independent contractors, she explained, they’re ineligible for the Paycheck Protection Program. “A lot of them have gotten jobs elsewhere. Some of us have been able to collect unemployment. Of course, with the federal unemployment expiring, it’s made things more difficult. Without having large shows to throw, we just don’t have the money to pay anyone,” she added.

Fox shares the concern among some GOP lawmakers that unemployment benefits at $600 weekly can discourage some from working. “My expectation is there will be an agreement. My expectation is it will be somewhere between the 200 and 600…will mean less money in people’s hands than they’ve had over the last couple months, but still sustaining some of the capacity to keep purchasing,” he said.

Wilde mentioned a plan to return to work as a bartender, but given bars ordered closed by the Knox County Board of Health next week, that isn’t an option. Now she faces the reality she’ll receive $600 fewer dollars a week. “It’s not livable. It’s really not at all.”

Wilde also advocated for the Save Our Stages Act, proposed legislation to help struggling live music venues across the country.

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