Alaska has seen record unemployment numbers since the start of the pandemic. Earlier this year, unemployed Alaskans received supplemental benefits from the federal government, to help mitigate financial harm caused by the virus.
But those payments ended in July.
And, it’s been a hard summer for unemployed Alaskans waiting for a second round of increased benefits.
Girdwood resident Shawn McCully gets $262.60 in unemployment benefits each week. Until mid-March, McCully worked in the hospitality industry, where he’s held jobs for more than 15 years.
But when the COVID-19 pandemic took hold in Alaska, McCully got laid off. He began receiving unemployment benefits, including an extra $600 each week from the federal government. For a while, he was doing okay.
“With that extra $600, I was making right at what I was making whenever I was employed,” said McCully. “But with everything shut down, you’re not out doing things, it’s easier to save money, I saved a little bit.”
But those extra $600 payments ended in July. In August, President Trump signed an executive order that allows states to opt-in to further extend benefits. Alaska did, but that was more than two months ago.
McCully expects to receive an extra $300 each week eventually, and that can be paid back for weeks missed through the summer. But so far, he hasn’t seen that money.
On October 13, the state unemployment office said the new program was scheduled to begin this week. Patsy Westcott, the director of the Division of Employment and Training Services at the state Department of Labor said the goal is to get those payments out this week, but that she couldn’t promise anything. Westcott said the state had to build almost an entirely new program in order to distribute the funds. Creating and testing that program, she said, is taking a lot of time.
“I know folks are waiting for this money and we certainly want to get it out the door as quickly as possible but we also have to make sure that we issue the payments correctly,” said Westcott. “It was a heavy lift.”
Even if he could get another job, McCully said he is worried about working in the hospitality industry right now. He has a heart condition that he says could make him more vulnerable to serious complications if he did contract the virus.
For now, McCully is living on as little as possible, waiting, and emailing lawmakers to ask: what gives?
He’s not alone.
Recent numbers from the Alaska Department of Labor show September job numbers were down 11% from the same month last year. Jobs fell in every sector except federal government.
Mouhcine Guettabi is an economist at the University of Alaska’s Institute of Social and Economic Research. He said Alaska has lost way more jobs in the last year than it did in the three years of recession that preceded the pandemic.
“Eleven percent below last year’s numbers is not something that we’re accustomed to saying. The three-year, very long, very painful recession resulted in the state shedding a third of what we’re talking about now, less than a third,” he said.
In the leisure and hospitality industry, there were about 13,000 fewer jobs this September than at the same time last year.
And, Guettabi says, unemployment claims reflect these losses. There are two types of claims: those made by people who have been receiving unemployment and want to keep getting it. And, those from people applying for the first time.
The number of claims in both categories has fallen from their pandemic highs, but in the latter group, those people filing initial claims, something weird happened recently. Those claims had been falling, and the state had been seeing around 3,500-4,000 each week. But in the past week, says Guettabi, those claims jumped back up to over 6,000.
“And that’s obviously a substantial jump, potentially indicating that there’s still weakness bubbling below the surface,” said Guettabi.
When the $600 supplemental benefits were set to run out, Guettabi warned of a potential “income cliff.” Suddenly, people would have significantly less to spend, meaning less money entering the economy.
Since then, he says it’s been hard to identify if there was a big drop off in spending, because a lot of people were actually able to save money — income increased.
“Even though a lot of people saved money, even though we had, on aggregate, a lot more income, there is a lot of pain, there are pockets of pain where, I think that we are eventually going to see the damage,” said Guettabi.
Guettabi said there is a clear need for more stimulus money. That’s something McCully is desperately waiting for.
“It’s emotional, it’s tiring because of the stress,” said McCully. “I lose sleep a lot. But you just got to keep going and hope that some help is coming.”
