With Alaska at ‘income cliff,’ labor calls on US senators to fight for unemployment benefits

Since April, out-of-work Alaskans on unemployment benefits have received an extra $600 a week from the federal government. But the pandemic unemployment benefit expires this week. Alaska labor unions want Sens. Lisa Murkowski and Dan Sullivan to support efforts in Congress to extend it.

Alaska AFL-CIO President Vince Beltrami was among a group of union leaders and members who rallied to the cause Tuesday

“So, get out there, Sen. Sullivan, Sen. Murkowski. Be leaders in Congress and tell Mitch McConnell to support the Heroes Act,” Beltrami said, to cheers from a small crowd of supporters outside Denali Montessori School in downtown Anchorage.

The HEROES Act, already passed by the U.S. House, would extend the $600 weekly benefits through next January. It would prevent the economy from seizing due to a sudden loss of cash, a situation some economists have dubbed the “income cliff.”

For some employees at the lower end of the pay scale, the $600-per-week payment, combined with regular state unemployment, means it pays to stay home. That’s one of the arguments against the benefit — that it creates a disincentive to work.

RELATED: Alaska’s economy is headed for an ‘income cliff’ at end of July

Ian Fox works in Alaska’s hardest-hit industry: Leisure and hospitality. He has two full-time jobs at two Anchorage hotels, but he’s been out of work for three months. He said the fact that some workers are making more on unemployment shows their paychecks weren’t big enough to start with.

“What I have to say about that is: Stop squabbling about a few bucks,” Fox said. “This government, this state, this whole entire establishment has been bailing out these big corporations for all these years, while we’ve been getting peanuts. Okay, this a little bit that we’re getting that might be a little bit extra. We deserve it. We’re the ones who are building up these corporations and these companies.”

Fox said he’d rather be working, but he’s a banquet server, and the hotels aren’t hosting big banquets these days.

Beltrami said the payments are good for Alaska as a whole, because the money circulates in the economy.

“Any of that money that gets in the hands of people that are out of work or just barely scraping by, they’re going to spend it,” he said. “They’re going to spend it on food and goods to keep the family rolling.”

RELATED: Alaska had just emerged from recession when the pandemic hit. When will the state’s economy be back to pre-COVID levels?

Alaska’s U.S. senators aren’t saying whether they’d support the extension. Sen Sullivan’s spokesman said he’s considering a variety of proposals for the unemployed.

Sen. Murkowski’s office said she wants unemployment benefits for Alaskans who depend on them and also wants to avoid creating disincentives to work. A spokeswoman said she’s trying to encourage consensus as lawmakers negotiate the Democratic bill from the House and the HEALS Act. That’s the COVID-19 relief bill Senate Republican leader Mitch McConnell announced today. It would cut the weekly benefit to $200, and then in the fall replace it with a program to provide unemployed workers with 70% of their lost wages.

Rep. Don Young voted against the Heroes Act when it was before the House in May.

UAA Associate Professor of Economics Mouhcine Guettabi said an unemployed person who earned less than $65,000 a year would be better off with the $600-a-week payment than the Republican proposal. Those whose paychecks came to more than $65,000 would do better with the 70% in the HEALS Act.