Pennsylvanians who receive unemployment benefits will be short $600 dollars this week; the weekly $600 Federal Pandemic Unemployment Compensation expired for Pennsylvanians on Saturday, and Congress has yet to decide to renew the additional payment.
Without it, Pittsburgh’s regional economy could lose some $300 million per month, said Chris Briem, a regional economist with the University Center for Social and Urban Research at the University of Pittsburgh.
That’s roughly 5 percent of the area’s monthly income, said Briem.
“[Five percent] might not sound like a lot,” he said. “But to abruptly go away is certainly a scale of loss that’s going to be felt across the economy.”
Roughly two-thirds of the area’s economic activity consists of providing goods and services to people, said Briem, so those already hard-hit businesses will absorb the shock first as people cut back dramatically on any discretionary spending. The repercussions for the region become worrisome when people are forced to cut back on non-discretionary expenses such as rent, said Briem.
“Housing loss will ensue.”
While Pennsylvania's eviction moratorium was extended through August 31, the economic picture remains dim. As of mid-July, more than 120,000 people in the region filed for continued unemployment.
“The economic situation is going to follow from the public health situation,” he said. “So the public health crisis needs to abate at which point I think the economy will begin to right itself.”
Briem added that even if Congress does renew some form of pandemic payments, it may take a while for the state to implement those changes.
Jerry Oleksiak, head of Pennsylvania's Department of Labor and Industry, said if Congress decides to provide a flat-fee payment with no new restrictions, that would be fairly simple to get out the door. However, if the legislature adopts an assistance plan to provide a percentage of a recipient’s income, or adds a new eligibility measure, those changes would take a lot longer.
“In order to follow the letter of the law, depending on what it says, we may have to review all of those claims individually,” he said. “It could take months.”
Both Congressional Republicans and Democrats agree additional unemployment assistance is needed, but have presented very different proposals.