Americans owe nearly $1 trillion in credit card debt, an all-time high, according to the Federal Reserve. Much of that debt was piled on over the last half of 2020 when many people on unemployment lost the CARES Act’s $600 supplemental.
“When I lost my job in April, my unemployment was $65 a week, but I was getting the extra $600 which was helping some,” said Mary Davis in Michigan.
Davis struggles with a disability and was only able to work part-time before the pandemic. When she lost her part-time retail job in April of 2020, initially, she was getting the $600 CARES Act supplemental and had an income of $665 a week. However, her monthly food stamps and other low-income benefits were taken away. She was on the hook for her full rent, which was $1,100 a month, in addition to paying for her utilities and food for herself and her young son.
Davis was able to get by until Congress allowed the CARES Act supplemental to expire. She went back down to unemployment of just $65 a week, and then to only $35 when her state unemployment office noted the $65 was an overpayment. In order to now feed her son and keep the lights on, she had to take our loans.
“I am in about $6,000 in debt,” said Davis.
“We knew there was going to be some kind of gap. We didn’t think it was going to be a complete donut hole,” said Gwen Turos in Oregon.
Turos worked in the live entertainment industry before the pandemic, and when all live events shut down, she lost her roughly $70,000 a year income. She has had to put her mortgage in forbearance and was able to pay most of her other bills with the CARES Act’s $600 supplemental. However, like Davis, when that ended in July and Congress didn’t pass another stimulus bill for five months, she had to start piling on debt.
“I am currently--my wife and I--about $10,000 in debt,” said Turos.
Turo’s wife also lost her job and with it her employer-paid health insurance. To make sure her wife still has health coverage, they pay roughly $500 a month for the coverage, a new expense added to the old ones they struggle to afford.
“I am guessing that where we are, it would take me four years of work to catch up from the blow of this pandemic,” said Turos.
“Since August of 2020, I have accumulated $16,500 in debt. Since March, $26,200,” said Amie Blazio in Nebraska.
Blazio was a restaurant waitress, supporting 11 children at home when she lost her job in March. Like millions of Americans, she struggled to get on unemployment as the systems were overwhelmed with people trying to submit jobless claims. She waited months to finally get her benefits, accumulating debt that was partially paid when she got a lump-sum payment from her state’s unemployment system.
However, she eventually had to deal with the state claiming overpayment. So, she not only lost the $600 supplement in July, but all her unemployment benefits. She has filed an appealing is waiting for her case to be heard. Until then, she struggles. She has not been able to pay her utilities in almost a year, prioritizing feeding her children and having barely enough to pay for gas to get them to school.
“There have been many, many, many mornings that I prayed that if I run out of gas, I don’t run out of gas until after I drop them all off at school,” Blazio said. "So, that it is just me that I have to worry about getting home.”
“The number one thing we are hearing in our organization is ‘What about all the debt I have now?’” said Stephanie Freed with Extend PUA, an organization of thousands of Americans who are unemployed and fighting for help from Congress.
The organization’s latest battle is over this debt crisis, asking Congress for retroactive unemployment payments for the last half of 2020. Payments that would be some portion of the $600 supplement that ended in July.
“Pretending the last five months didn’t happen, is frankly childish. To say, ‘Well, I got away with that. I got away with not helping for five months, so we are just going to pretend that didn’t happen,’” said Freed. "People won’t survive.”
Retroactive unemployment benefits are, so far, not included in Biden’s $1.9 trillion stimulus package. It is unclear if it will eventually get tacked on to this plan or a future one. For some people, like Davis and Blazio, they don’t know how they’ll be able to pay back their debt unless retroactive payments are made.
“I am 44 years old. This $26,000, I make $30,000 a year, in a normal year, working full-time. I will never get that paid back,” said Blazio.
“If retroactivity is not included, I feel like I will be in debt forever,” said Davis.