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Until last week, Brennan Neill worked in development at the Flynn, the nonprofit performing arts center in Burlington. But days after the theatre canceled the remainder of its season due to the coronavirus outbreak, Neill was laid off in a round of cutbacks that hit about a third of the organization’s staff.
“It was surprising, but it wasn’t surprising,” he said this week.
Neill applied for unemployment insurance and expects he’ll be eligible. But he’s waited more than a week without confirmation. That’s because Neill was only one of a record 14,784 Vermonters to file for unemployment insurance last week. By Thursday, only 3,667 processed claims had been reported to the federal Bureau of Labor Statistics.
Economist and VTDigger columnist Art Woolf says the initial claims number is just the first signal of what happens next. Once the state Department of Labor makes eligibility determinations, economists can determine how long the state’s unemployment trust fund will last.
Once it’s depleted, the state has to borrow from the federal government to continue paying claims. But, Woolf says, “the federal government cannot bail out everybody forever.”
Part-time and hourly workers facing cutbacks may have a harder time getting relief, according to Elaine McCrate, a retired UVM economist. “You have to be able to describe what you’re losing, and it’s not a job,” she said. “It’s a few hours a week that helps pay the electric bill.”
For Neill, the former Flynn staffer, the hardest part of the process is not having the information to make his next move. He’s eager to find work, but doesn’t want to jeopardize any potential benefits — and he won’t know until the Department of Labor processes his claim. “It’s just kind of getting used to it for now,” he says. “But I don’t even know what to get used to, because I don’t even know what I’m going to be getting or when.”
**Podcast transcript**
This week: Skyrocketing unemployment claims show that nearly 15,000 Vermonters have already lost their jobs due to business cutbacks during the coronavirus outbreak. What happens next for those workers — and for the state’s economy?
Brennan Neill: Hey, Mike.
Hey Brennan, how’s it going?
Brennan Neill: It’s going alright.
Brennan Neill lives in Burlington. He’s one of the 14,784 Vermonters who filed for unemployment last week.
As of a couple weeks ago, what did you do for work?
Brennan Neill: I was the associate director of individual giving at the Flynn. With the whole COVID-19 thing popping up and us monitoring it, you know, bit by bit, as it progressed, it became apparent to us that there was no way that we’d be able to continue with our season. So, it was a couple of weeks ago that the Flynn decided to cancel the remainder of the season, which caused a really significant impact to the Flynn in terms of revenue.
The Flynn exists as a nonprofit, you know, the revenue comes from two different streams. It comes from contributed revenue, which is what donors and local businesses do, and foundations, to support the Flynn. But also through earned revenue, which is ticket sales. So it impacted us greatly. We knew it was the only thing that we could possibly do.
But then once that happened, you know, there was real concern about, well, what happens next? I think it’s pretty much public knowledge what happened. About a week ago, we had a big round of layoffs and furloughs. And unfortunately, I was caught up in that and I was one of them.
How do you actually find out that you lost your job?
Brennan Neill: I walked in last Thursday morning, a week ago, 8am to my office. I’d normally arrive there right at eight. Our interim executive director and our human resources director were there. And I knew at that point. I mean, it was surprising, but it wasn’t surprising. Just an unfortunate set of circumstances, I guess.
So what happened next? What was your first move?
Brennan Neill: First move, I packed up my office and I said goodbye to the people that were left behind and headed home. And the first thing I did was I called Vermont unemployment. I actually called. Because I had questions about — since I was laid off and I wasn’t furloughed, and I just had a couple questions. I looked at the online forum, but I had questions. And I’ve got to tell you, I was blown away that I picked up the phone and I called that number for the first time filers. And on the second ring, someone answered. It was great.
In the week since, I’ve gotten a couple of emails from unemployment saying that things are backlogged and you’re not gonna be getting anything for a bit. I don’t know how long it’s going to be. I’m kind of in that holding pattern.
What happens now? What’s your outlook for the next couple weeks, couple months?
Brennan Neill: Well, let me tell you this: I got laid off last Thursday, and my wife was furloughed from her job yesterday. So now you have my wife, you have me, and we have no real source of income right now. And, yeah, that’s it. That’s a real concern. My wife filed for unemployment through the online portal yesterday. But now we just kind of wait and see.
We’ve heard a lot of things about the bill that’s moving through Congress and what that’ll mean to us. And you know, does that mean $1200 for each of us, and then 500 for our daughter? And maybe that’s coming in a few weeks, I don’t know. That’s another thing, Mike, is I don’t really even know how much we will get per week once we do get the unemployment.
But the hardest thing for me is — look, I worked for six years at a place I loved. And I believe so passionately in the mission of what the Flynn does. It’s hard enough to say goodbye to that. But to then be in a situation where you’re one of a record number of unemployed people filing — what was it, 14,000, or I don’t know what it was this past week — you have this a massive pool of people that are out of work that want to work, and no one’s hiring. You have the shelter in place situation, where only essential businesses are operating.
My natural inclination, Mike, is to hit the ground running, find work, I don’t care what it is, and to support my family. But I have to wait to hear from the state. First and foremost, how much am I even going to get? Because I think the worst thing for me would be potentially going and just taking anything, even close to minimum wage or whatever it is, to get an income, and then that would blow up my unemployment benefits. But the hard part for me is I don’t even know specifically what those unemployment benefits are. So I’m kind of in an awkward holding pattern.
Brennan knows he’s not alone – the state Labor Department has said those roughly 15,000 unemployment claims make for an all-time record. Our columnist Art Woolf was an economist at UVM – and he says that the spike in claims shows just how many different sectors of our economy are affected.
Art Woolf: It doesn’t tell us anything we didn’t know, generally speaking: That there’s lots of businesses that initially shut down because they were told they had to — you know, restaurants or bars are the prime example. Other businesses that we knew were really hard hit like hotels, and laying off lots of people. What we didn’t know as much about was how many other businesses were either closing or significantly reducing their staff. And a lot of that is retail — you know, people trying to avoid each each other.
So that was last week, which is an eternity ago. And, and this week, the governor just made his announcement two days ago or whatever, that effective yesterday at five o’clock, all non-essential activities have to be stopped. You can do it remotely. But there’s a lot of businesses that can’t do that for everybody.
Right.
Art Woolf: So that tells us that this whole process of people getting notified that they don’t have a job — roughly it started last week. It’s continuing this week, and it’ll probably spill over into next week.
Art said this new number – what he calls the initial claims – is only the first signal about how deep this crisis is going to cut.
Art Woolf: Then what happens — we get a slowdown in the number of people who are going into the unemployment office and saying, ‘I got laid off, I want to know if I’m covered.’ But then what you have is kind of the accumulation of all these people that have gone to the unemployment office. And probably most of them, the determination is going to be ‘yes, you are eligible,’ because you didn’t get laid off, and plus all the expansion in benefits that was just passed by the federal government.
So number one, it covers more people. And number two, it’s more money. That’s called continued claims. So these are people who have had a determination that they are eligible. They got unemployment last week, they’re getting it this week. They’re gonna get it next week. So every week we don’t just monitor how many people are walking into the office asking if they’re eligible, but they also count how many people are actually getting a check.
Got it. I’m curious, how do all of these eligible claims get paid? Does our unemployment insurance system have a capacity that we’re going to run up against?
Art Woolf: Yeah, just to give you a sense: At the beginning of the Great Recession, so in roughly 2007, I think there was about $250-$300 million in that fund. And by the end of 2009 or so, maybe it was early 2010, I’m not quite sure when, but it went down below zero. And part of the Obama stimulus bill, I think, was to replenish that. Or that it allowed the states to essentially borrow money from the federal government. And we borrowed $30, $40, $50 million, something like that, and gradually paid it back. And so by today, 10 years later, we’re up to about $400 million.
Art asked me to double-check this number after we talked, and it’s actually closer to $500 million. But his point is that it’s there for the time being – probably a matter of months – and then the state has to borrow from the federal government again.
Art Woolf: I guess worst case scenario — ignoring, obviously, death and health issues and just looking at at this one part of it — worst case scenario is if this thing lasts for several months, the federal government is going to have to continue pumping huge amounts of money into the economy and into things like unemployment insurance. So my sense is that there probably will be federal programs to deal with a really worst case type scenario to help individuals.
But the federal government cannot bail out everybody forever. Right? The federal government can’t give people that kind of money every week if this thing lasts for a year. And I don’t think anybody expects it to. But I do expect, and you’ve already seen, they’re already talking about another trillion dollar or $2 trillion bill within the next few weeks. So I think from the state’s perspective, the unemployment insurance issue is not one of the most dire things they should be thinking about, simply because the federal government is dealing with that issue.
[break]
Elaine McCrate: Hi.
Hi, Elaine?
Elaine McCrate: Yeah, can you see me?
I can’t see you yet.
Elaine McCrate: Okay, hold on. “Start video.” That would explain why you can’t…
Earlier this week I caught up – on Zoom, obviously – with Elaine McCrate, another economist retired from UVM who specializes in low-wage workers. Elaine said we’re seeing this spike in part because there’s a huge sector of Vermont’s workforce that can’t work remotely under the new orders.
Elaine McCrate: Those kinds of people are going to be people in direct service, which includes a lot of health care workers, a lot of grocery store workers. And it’s going to be people in manufacturing who actually have to be there in order for things to happen. And I imagine a lot of them — because they, under the terms of the governor’s order, or even before that if they wanted to do the wise thing — many of them will be more or less stuck at home and they won’t be able to work. And if you’re paid by the hour, you’re not going to be paid either. Or if you’re a gig worker, you’re not going to be paid.
Elaine said for a lot of these workers, unemployment may not even be an option.
Elaine McCrate: People who merely lose hours as opposed to jobs, it’s always difficult for them to access social insurance programs. Because you have to be able to describe what you’re losing, and it’s not a job. It’s a few hours a week that helps pay the electric bill.
Right. There’s no such thing as underemployment insurance?
Elaine McCrate: No, there’s not. And there’s a lot of that going on with people who are paid by the hour, part time workers in particular.
I’m curious, when you’re looking at situations like this, and looking at the responses being taken at the state and the federal level — what do you use as a precedent for a disruption to the workforce that is this serious, a spike in unemployment that’s that large?
Elaine McCrate: Well, oh, it’s partly that it’s large and sudden. But “large and sudden” happened in 2008. It’s partially the origins of it. Normally, for example in 2008, if anybody had been watching carefully, they would have known that there were cracks. And there were vulnerabilities. And I assume that, you know, we still have cracks and vulnerabilities. But this wasn’t coming primarily from the cracks and vulnerabilities. This was coming from a pandemic in China. And we’re more vulnerable to something like this because we were so poorly prepared to cope with the health problem.
And a lot of people are just at the edge in ways that may not have been true in, I don’t know, let’s say 1970. What makes it different is an increasing growth of underlying fragility. And just this out of the blue, the sort of nature of the disruption, which is going to require a massive public health mobilization in the very short term. In the longer term you would like to address some of the underlying economic vulnerabilities too.
Where do those vulnerabilities, that fragility — where does all that come from? What are the structural issues that you’re referring to here?
Elaine McCrate: So for example, the part time workers who are paid by the hour who never know how many hours they’re going to work. Or the people who — if they had a job at McDonald’s, in some cities, for example, they would realize that they had signed a noncompete agreement so that they wouldn’t be able to take a similar job at Burger King. And something like 20% of workers are subject to these noncompete agreements now across the country, which means it’s very difficult to go around and shop your skills and try to find a better deal for yourself.
A big part of it is that workers are not protected — the decline of unions in the 70s in the 80s. A lot of the fragility is coming from the very, very low margins that people have to keep in the face of international competition. There are other firms that have sky high markups right now — as a matter of fact, the aggregate market rate has increased dramatically over the last 30 years. But a lot of other small businesses are really on the edge. And the safety nets have been kind of shredded, so that if you lose a job or you lose hours, or you’re having trouble keeping your business afloat, there are not as many alternatives as there used to be.
I’m curious where that leaves a worker who’s being affected by all these systemic forces right now in the midst of this crisis. And maybe even if they get some kind of new access to unemployment, what if that doesn’t pay all their bills? Where does that leave someone in that situation right now?
Elaine McCrate: If it doesn’t pay all their bills, you would hope that the people they owe money to would say, okay, we’re going to forgive debts for a little while. If you have a car loan, or if you just bought a truck or something, or if you have a mortgage — hopefully they would say, ‘okay, we’ll give you a grace period. We understand things are kind of rough right now. And it’s nobody’s fault.’
So hopefully they would give you a grace period. But if they don’t, call your brother, call your dad, call your mom. And if that doesn’t work, then I don’t know what you’re going to do.
Brennan – the Flynn staffer who got laid off last week – said one of the worst parts of this process for him was not even knowing when he would get the information that would help him plan his next move.
Brennan Neill: The woman — who was wonderful — who filed my claim on the phone, she was just so great. But she said she didn’t know that. That her role was just basically to take the information and that I would be receiving an eligibility letter, I think. And it would say, you know, are you eligible for unemployment, which I would expect I would be, and then also what you would expect to receive per week, etc., etc. But I haven’t gotten anything. And I know that there’s a huge backlog. Obviously, that’s why. But it’s been a week and I haven’t heard anything.
Well, I’m sorry to hear you’re going through. I think that sounds incredibly stressful.
Brennan Neill: It is.
What are your obligations? I mean, what are you most worried about in terms of being able to pay bills and provide for your family?
Brennan Neill: 100%. Yeah, I mean, the first and foremost is the mortgage on the house. We’ve already reached out to our lender to ask if there’s any sort of flexibility, you know, in terms of at least what the interest rate is. If there’s a way that they could subsidize or waive temporarily or whatever it is, the interest that we’d be paying, to reduce our monthly payment. But yeah aside from that, it’s a matter of looking at every single area of our budget and saying, like, well, where can we trim back? Where can we trim back? Where can we trim back? And again, without even knowing what the amount is going to be, it’s hard.
There’s a lot of unknowing. And I think also, knowing that this is going to be the situation for a while, because I don’t think I’m really — like a lot of people, I don’t think a lot of us who are out of work are really going to be able to find some sort of steady, reliable work for for quite a while. So it’s just kind of getting used to it for now. But I don’t even know what to get used to, Mike, because I don’t even know what I’m going to be getting or when.
And in the meantime, you’re just kind of checking your mailbox every day for that letter?
Brennan Neill: Yeah, that’s basically it, is looking for that eligibility letter. What are we going to get? And when will we expect to get it? So there’s a lot of questions.
I’ll tell you that I’m grateful for anything. You know, to lose your job, and have a daughter and have a house and all of that. But, you know, both of us lost our jobs. So I’m certainly grateful that there’s some sort of social net to help. But it’s going to be tight. It’s going to be tight for a lot of people. But hopefully, I’ll find out news soon on that. So at least I’ll know what I’m facing.
Got it. Well, thanks for giving me the rundown, Brennan. And good luck to you. I hope it comes through, and I hope you’re able to get what you need.
Brennan Neill: Thanks, Mike.
