Unemployment impacts the island community

Almost 600 islanders are still unemployed following the Governor’s COVID-shutdown orders in March.

A job is more than just a job. It’s a matter of dignity, the ability to support yourself and care for your loved ones. When the Governor’s COVID-shutdown orders hit in mid-March, more than 1,200 islanders were laid off or were unable to keep their businesses open.

Regular unemployment insurance (UI) only covered employees who had worked over 680 hours in the past year and whose employers had paid unemployment premiums to the state. Fortunately, the CARES Act expanded benefits to part-time workers and the self-employed effective March 29, 2020.

Washington Employment Security Department (ESD) was one of the first in the nation to accept applications for Pandemic Unemployment Assistance (PUA) starting April 20, 2020. There were glitches—-system overload, confusing questions, and fraudsters, but people started receiving $188-$790/week state benefits (approximately 1% of their 2019 income per week) plus a flat $600/week federal boost. There was no time for Congress to come up with a boost that was calibrated to only replace each person’s income.

For the 10 to 15 percent of unemployed islanders who had earned over $60,000/year, the combined benefits covered only a portion of their income. For over 50 percent of unemployed islanders, the combined benefits were more than they earned weekly while working, basically providing an annualized (taxable) income of $40,000. (So ironic that the Trump administration was essentially providing a basic income.)

In mid-May, ESD detected massive fraudulent claims and required hundreds of thousands of Washingtonians to verify their identity with a photo of their driver’s license and their Social Security card (could you find yours?). The National Guard had to be called in to help with the verification process.

ESD was overwhelmed and had a backlog of over 100,000 cases. Answering one tricky question wrong could set a person back for months. Many islanders waited 10 to 16 weeks to receive any benefits but eventually received a large deposit and others are still caught up in the current backlog of 20,000 cases, plus an undisclosed number of appealed determinations.

Many of Vashon’s businesses went through the challenging process of getting forgivable Paycheck Protection Loans (2.5 times monthly payroll) and/or forgivable Economic Injury Disaster Advances ($1,000/employee up to $10,000) to keep paying their employees and saving the state unemployment funds. Basically, people were being paid to stay home to prevent the spread of COVID.

Restaurants and retail shops could only operate curbside. The farmer’s market was canceled, cutting the income of growers and artists. Vashon hair and beards became even more unkempt than usual. Stress-relieving massages were prohibited. Housecleaners and child-care providers could not work. Rents and mortgages went unpaid.

By late July, people had spent their tax stimulus payments, the $600 federal boost expired, and the Paycheck funds were expended. Sawbones permanently laid off 60 employees (15 have been rehired recently). More than half of unemployed islanders went from $800 a week to $200/week.

In August, an Executive Order allowed the states to request federal benefits of $300/week from already-allocated disaster funds. Congress adjourned without extending the federal boost and is still at an impasse in negotiations. The smoke-and-mirrors disaster funds are expected to run out and five qualifying weeks in August will not be back-paid until September 21, 2020.

The Governor has extended the job-search waiver to at least October 1, 2020, likely in anticipation of a fall resurgence of COVID and in acknowledgment of the fact that there are no jobs to be had. High-risk individuals can establish “good cause” for refusing work and still qualify for benefits.

The CARES Act added 13 weeks of eligibility to the usual 26 weeks, which means many islanders’ benefits will run out December 26, 2020. (Extended benefits may be offered for another 20 weeks but have more stringent eligibility requirements.)

Most islanders have shed their COVID-hair and enjoyed a few takeout meals, but almost 600 still-unemployed islanders are anxiously following the news about another potential stimulus bill, a fall resurgence, a COVID vaccine, and the opportunity to return to work safely.

Deborah Diamond is a retired IRS Governmental Liaison who has provided more than 700 free telephone consultations with islanders regarding stimulus payments, unemployment benefits, and PPP loans through VashonBePrepared and the Vashon Chamber of Commerce “Ask An Expert” program. For assistance or to sign up for weekly unemployment tips, contact deborah@vashonbeprepared.org.

Diamond’s portrait was painted by Pam Ingalls for her “Local Heroes” exhibit at The Hardware Store in July.