Jobless Kansans Foresee Harder Times Ahead As Federal Aid Nears An End
Ryan Fox didn’t think he’d be on the list to get laid off after 20 years as an aircraft machinist.
Turns out, he says he was just three people short of surviving the cut.
Fox was one of 2,800 people laid off from Spirit AeroSystem in January after the company suspended production of the Boeing 737 MAX. Fox says Spirit’s recall policies, in which they randomly call workers back, have made other companies hesitant to hire him even with his extensive background.
Still, despite being laid off and unable to get a job, Fox’s life wasn’t completely upended. That’s due in part to the extra help he has received from the Federal Pandemic Unemployment Assistance (FPUC) program.
On top of receiving his traditional state unemployment benefit, Fox has collected an extra $600 a week from FPUC, a program under the CARES Act.
But between a mortgage, car payments and everyday bills, it’s still not enough.
“With the 600, I’m still shy by a couple hundred bucks a week,” Fox said. “We’ll make due, but we already foresee hard times coming.”
Those hard times may arrive sooner than expected for Fox. The FPUC benefit that has kept his family afloat is set to expire July 25.
Currently, 94,734 Kansas residents still receive both traditional state unemployment benefits and the additional $600. Most will see their total benefit cut in half by the end of the month.
If Congress and President Donald Trump do not extend the program, Kansas will be without a large chunk of money helping both the unemployed and the economy.
Currently, the program is adding $60 million weekly to Kansans’ personal income, according to Wichita State University’s Center for Economic Development and Business Research. Without it, Kansas’ annual GDP could constrict by as much as 3%, costing the state approximately 26,000 jobs.
On the other hand, according to the Economic Policy Institute, if the benefit is extended through July 2021, the state could see a boost of $2.6 billion, equivalent to 2.3% of its annual GDP.
Jeremy Hill, director of the center at WSU, thinks Kansas will be more affected by the loss of FPUC money more than other state economies because of what he says are Kansas’ two primary niche industries: aerospace and manufacturing. Both rely heavily on supply chain relations, trade barriers and global demand -- all of which have been slowed down due to the pandemic.
As the world continues to grapple with COVID-19, these issues will persevere, Hill said, and Kansas will take a hit if extra help, like FPUC, is removed from the local economy.
“Because we are farther in that niche than the rest of the U.S., we’re going to still see more layoffs and struggle a lot longer than the rest of the U.S. economy, which are more service-oriented,” Hill said.
Layoffs at local companies like Spirit and Textron Aviation at a time when global demand for those skills are low could potentially lead to many Kansans going bankrupt. As a result, consumer spending on items such as eating out -- already weak because of COVID-19 -- would become weaker as more layoffs occur in the shadow of the coronavirus.
The Kansas unemployment rate has declined significantly to 7.5% in June from April's peak of 11.9%, about average for the country as a whole. In comparison, during the Great Recession, the unemployment rate topped out at 7.3%. Kansas entered the pandemic with a record-low unemployment rate of 2.8%.
Additionally, there was a big jump in Pandemic Unemployment Assistance (PUA) recipients whose extra $600 does not expire until the end of the year. Under the CARES Act, PUA serves those who don’t qualify for traditional unemployment, including gig economy workers and contractors. The number of state PUA claims spiked to 118,650 people by the end of June, more than doubling from the previous week, likely as a result of backlogs being cleared.
But for people like Fox who will soon lose the extra weekly boost of $600 from FPUC, they can expect to watch their spending for the time being.
“This is the (longest) I’ve ever been unemployed,” Fox said. “It’s the first time in my entire adult life I have ever felt nervous because I don’t have something at this time to fall back on.”
Hafsa Quraishi is KMUW's inaugural Korva Coleman Diversity Intern. Hafsa is currently pursuing her master’s degree in journalism at the Craig Newmark Graduate School of Journalism at City University of New York.