More Than 315,000 Gig Workers And Independent Contractors In Texas Will Lose Unemployment Relief Without Action From Congress

By Mitchell Ferman

Over the last four years, Jessica Reinke built up her roster of clients as a barber in San Antonio, starting from scratch after bailing on a career sitting at a desk.

The flexibility of setting her own schedule cutting hair allowed Reinke to be present for her daughter, now 9, while Reinke’s husband worked long days driving UPS Inc. trucks. Reinke rented stations at barbershops where she relied on a steady mix of regulars and impromptu walk-ins.

At the same time, Reinke was progressing her long-term plan to leave for the Texas Hill Country and finally start something new.

“We were going to move and buy a house and open a shop out there in New Braunfels,” Reinke said in an interview. “I had like $4,000 saved up that I had been working really hard to save.”

She added: “You know how everyone was like: ‘2020 is going to be my year!’ It really was for me.”

Self-employed people, gig workers, and independent contractors — folks like Reinke, ride-share drivers, and freelance workers — don’t typically have guaranteed wages, company-subsidized health care, or sick pay. And they traditionally haven’t qualified for state unemployment benefits.

So when the coronavirus pandemic came, wiping out in-person business and prompting historic layoffs, such workers were suddenly left more vulnerable than ever. Luckily for many, Congress in March quickly passed a $2.2 trillion coronavirus relief bill that allowed gig-workers and independent contractors to receive unemployment relief.

“I thought it was only going to be a couple months,” Reinke said of the pandemic. “I had my savings, I’m getting unemployment to help pay the bills and get groceries. But it never ended. We’re still stuck in it.”

The provision of that federal relief bill is set to expire Dec. 26. Reinke is among more than 315,000 gig workers or independent contractors in Texas who are set to lose their unemployment aid when it does, according to the Texas Workforce Commission, the state agency that administers unemployment aid. In all, more than 619,000 independent contractors in Texas who lost work received benefits under the program Congress created, according to the commission.

Congress and President Donald Trump’s administration have yet to work out a new coronavirus relief package. Members of the U.S. House of Representatives last Wednesday decided to extend their negotiations for new legislation into this week, which lawmakers hope will give them more time to come to agreements on emergency economic relief.

The most recent $908 billion bipartisan proposal provides hundreds of billions in aid to jobless Americans and hundreds of billions of dollars to hard-hit states and cities. That includes an extension in unemployment for self-employed Americans, according to the Washington Post. The legislative proposal would also lead to funding for small businesses.

But talks on the stimulus package almost broke down Tuesday after the White House proposed a relief bill that would offer only minimal benefits to jobless people, according to the Post.

Texas’ unemployment rate fell in October

Texas’ unemployment rate in October was 6.9% — a decrease from the 8.3% September jobless rate, according to a U.S. Bureau of Labor Statistics report released on Nov. 20.

The state still lags behind the national unemployment level, and a new wave of coronavirus cases could further set back the economic recovery.

Source: Bureau of Labor Statistics and the Texas Workforce Commission | Credit: Anna Novak

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As federal leaders continue their political wrangling over potential relief legislation, the pandemic is surging in more parts of Texas — and there are fewer intensive care unit beds available statewide — than ever before. Meanwhile, economists have said repeatedly that a strong economic rebound will not happen until COVID-19 is under control.

The effects of the pandemic’s accompanying recession have already been dire and disproportionate: More than 2.5 million households in Texas didn’t always have enough food to eat in November, according to the U.S. Census Bureau. About two-thirds of those households were either Black or Hispanic.

The inequities in joblessness have been chronicled nationwide during the pandemic. But the workforce commission did not provide a racial or ethnic breakdown of the gig workers or independent contractors in Texas set to lose benefits this month in time for the publication of this story.

This story originally published by the Texas Tribune.