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Jobless Restaurant Workers Now Receiving Sub-Minimum Wage Benefits as $600 Aid Checks Expire

White House chief of staff Mark Meadows said he’s “not optimistic” on a short term solution for a new federal stimulus

From left to right: U.S. Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows speak to reporters in Washington
From left to right: U.S. Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows in Washington
Photo by Samuel Corum/Getty Images

This is the first week that New York City’s 193,000 jobless food service workers will have to make do without a $600 CARES act check, a stark financial reality that those ex-workers might need to get used to. The federal program that funds that benefit ended last week amid an impasse over the next Congressional stimulus, and White House chief of staff Mark Meadows told CBS’s Face the Nation on Sunday that he’s “not optimistic there will be a solution in the very near term.”

Local hospitality workers will now have to scrape by with more austere state unemployment assistance. Those payments, which cap out at $504 for the highest paid restaurant workers, aren’t really meant to act as the type of long-term income replacement that’s necessary amid an indefinite ban on indoor dining. Those payments are rather meant to assist people while temporarily transitioning between jobs.

For a bit of context: A waiter previously earning the city average of $42,440 will now only take home about $408 every week on state unemployment, or roughly $10.20 per hour, well under the city’s minimum wage of $15. Unemployed dishwashers will earn roughly $7.60 per hour while out of work.

The Manhattan living wage, the amount individuals needs to spend on food, medical expenses, and rent, is nearly $18 per hour, according to the Massachusetts Institute of Technology. The $600 supplement, if reinstated, would take workers well above the living wage, but whether or when that might actually happen is in question.

The federal political impasse comes at a particularly inopportune time for New York. Last week, 4,780 food service workers across the state filed initial jobless claims — meaning they’re newly unemployed, either for the first time or because they got laid off again — according to data released on Thursday. These weekly jobless claims haven’t significantly changed since late May, even though New York is experiencing significantly lower positive test rates than the rest of the country. More frighteningly, 46,185 city residents filed for unemployment last week — about the same level as during most of June and July.

What this all means is that tens of thousands people in hospitality and throughout the New York economy are still losing their jobs every week, and the pace of those job losses doesn’t appear to be slowing. That bodes poorly for those people who won’t have the benefit of earning those $600 supplemental checks anymore. And those numbers might also foretell a scary national jobs report on Friday, which could show for the first time what bar and restaurant reclosings are doing to nationwide hospitality jobs.

New York City’s July jobs report won’t come out until later this month, but newly released data from June show Depression-era unemployment — depending on the borough. In Manhattan, where per capita income is nearly $73,000, unemployment was 16 percent. In the Bronx, where per capita income is just under $21,000 unemployment was a horrific 24.7 percent.

Keep in mind that 27 percent of Bronx residents are already living in poverty, according to pre-pandemic U.S. Census data. The longer it takes Congress to agree on federal unemployment and stimulus checks, the higher that poverty number will rise.

“Top negotiators for a coronavirus relief bill couldn’t even agree on what they agree on Sunday, indicating that Democrats and Republicans are still a ways away from clinching a deal,” Politico reported yesterday. Both sides are meeting today and throughout the week to advance a stimulus bill that covers a variety of issues, including state and local aid, stimulus checks, hazard pay for essential workers, a more targeted Paycheck Protection Program for small businesses, and an extension of enhanced unemployment.

The $600 checks remain a salient sticking point between the parties, with Democrats having voted for an extension of the benefit through January. Republicans, by contrast, want a smaller federal benefit, possibly as little as $200 per week, arguing that a richer benefit discourages individuals from returning to work (not necessarily a bad incentive amid a pandemic that’s killing over 1,000 Americans every day).

Over 31 million Americans are relying on jobless aid. The federal unemployment rate of 11.1 percent remains higher than at any point during the Great Recession.