Federal unemployment bonus: critical to surviving pandemic shutdown or disincentive?

Aug 2, 2020

The extra $600 per week in federal unemployment benefits provided by the CARES Act ended Friday, and government leaders in Washington have not reached an agreement on what plan should replace it. KCBX gets two Central Coast perspectives on the expanded benefit.

Legal permanent resident Gareth Kelly, who lives in Goleta, is one of the millions in California receiving unemployment benefits, after his office in the entertainment industry closed for the foreseeable future.

“Until I can go back to work, that money is vital for me to survive.” Kelly said.

With the extra boost in income ended, Senate Republicans unveiled a plan to replace the $600 with $200, but the plan is getting pushback from Democratic leaders who say it's too small.

“I think it’s frustrating seeing the politicians argue about what is real money for real people with real needs,” Kelly said.

But Josh Cohen, owner of Foothill Cyclery in San Luis Obispo, said that extra boost in unemployment benefits means his employees are making more money not coming into work.

“It created this fundamental rift between employees and management,” Cohen said.

Cohen said some of his employees asked if he could close the business, or reduce their hours so they could get the unemployment pay. Cohen said he couldn’t do either since he got the PPP loan which meant he had to keep his staff working a certain amount of hours.

“The reality is that a $600 a week bonus was completely done willy-nilly,” said Cohen. “[Congress] threw it together, they didn’t think it through, and nobody asked small businesses.”

Cohen decided to keep his employees happy and working, by giving them bonuses, but he said it's a struggle balancing the budget as a small business owner.

“If I could pay them more and keep them balanced the way it should be, I would,” Cohen said.

For Gareth Kelly, he thinks while some people may try to take advantage of the extra income, there are far more like himself, who actually need it to get through the pandemic shutdown.

“If people suffer, we all suffer as a society and that holds us back,” Kelly said. “So I think, let's take this moment to really help the people who need the help the most.”

As Congress debates new bills, millions are left in financial uncertainty waiting for what comes next.