Aly: Orange County Should Prioritize Working Families and Create A Pandemic Unemployment Loan Program

Soup line in 1931 during the Great Depression.

Orange County Poverty Alleviation Coalition recommends that the County of Orange establish a Pandemic Unemployment Loan Program. This program would offer Orange County residents loans, at interest rates between zero and one percent, upon proof that they have submitted a viable unemployment claim to the state’s Economic Development Department (EDD). The Board of Supervisors could fund this program by allocating a portion of the county’s $554 million federal CARES Act grant.

Local working families need a bailout. Governor Newsom stated at a May 14, 2020 press conference that 4.6 million Californians have applied to EDD for unemployment since March 12, 2020. Numerous reports show how EDD has struggled to process the unprecedented number of claims—in April: “Coronavirus Unemployment: 3 Weeks? Where’s My Money?”; “California expands EDD call center hours to meet soaring demand amid record unemployment levels”; “Coronavirus unemployment: Callers overwhelm EDD phone banks”; “Coronavirus crisis: Jobless Californians express frustration over state unemployment agency”; and still in May: “California unemployment agency overwhelmed with claims.” For months, many Orange County residents have gone without a paycheck, without unemployment benefits, and without getting past EDD’s automated, recorded busy message. This suffering is untenable.

Cars line up for miles on Main St. in Santa Ana to receive food in March 2020.

How can residents eat? Per the Voice of OC’s May 14 article, “Orange County Could See Great Depression Era Unemployment From Coronavirus Impact,“ OC Social Services Agency Director Debra Bates informed the Board of Supervisors that her department has received “a 100 percent rise in demand for food assistance programming.” Hunger has doubled in this crisis.

How can residents keep a roof over their heads? To delay a wave of evictions, the California Judicial Council ordered on April 6, 2020 that California landlords cannot evict tenants until 90 days after the Governor lifts the pandemic state of emergency. However, absent any changes in state law, residents will owe past rent, and thousands will likely face eviction for nonpayment. Tenants could also receive negative credit reports for missed payments. Homelessness may drastically rise in Orange County.

None of this suffering is necessary. If unemployed workers had timely access to EDD benefits, they could receive up to $450 per week from California based on past earnings, plus $600 per week that the federal CARES Act has supplemented to unemployment payments. The CARES Act has also funded benefits for independent contractors who can apply to EDD for Pandemic Unemployment Assistance. Residents could feed themselves and pay their rent if they received the maximum of $1050 per week from EDD benefits; they would effectively earn $26.25 per hour on a 40-hour work week, or $9.73 more than the living wage of $16.52 for a single adult in Orange County.

Creating a Pandemic Unemployment Loan Program, and allowing residents to borrow on future EDD benefits, would effectively function as an expansion of the existing General Relief Program. As the Social Services Agency website explains, “General Relief (GR) is a cash assistance program funded by the County of Orange. It provides temporary cash aid to eligible indigent adult lawful residents who do not have custody of any minor children and do not qualify for Federal or State funded cash aid programs. GR is a loan. The County will ask former recipients to repay GR from a Supplemental Security Income (SSI) retroactive award. The County may ask former recipients to repay GR from other money they have, but only after meeting the basic support needs of him or herself and his or her family.” Similarly, a new loan program for unemployed workers could provide temporary relief to residents until EDD processes their claims.

Orange County could do much good with its $545 million in federal CARE funds, but it must prioritize working families. The Board of Supervisors must provide COVID-19 related health care resources, increase testing, support cities, and fund programs that benefit the most vulnerable residents, including the homeless community. However, if the Board does not also bail out working families, Orange County will experience an accelerating rise in hunger and homelessness. We should aim to benefit as many as possible, and a loan program would help ensure that funds do not run out before reaching others in need.

Since March 2020, federal, state, and local government has asked the public to sacrifice many of its liberties. In exchange, the public has every right to ask the government for adequate economic protection. Some begin to resist the shelter in place orders; others fear that ending social distancing too early will only prolong the pandemic; but none can dispute the economic crisis falling on many households. The only reasonable way that the government can expect compliance with shelter in place orders is by honoring the social contract, and efficiently helping working families.

Background on the County of Orange’s $554 million CARES Act Grant

On May 12, 2020, the Orange County Board of Supervisors accepted $554,133,764.90 in grants from the federal Coronavirus Aid, Relief, and Security (CARES) Act. (Pub.L. No. 116–136 (Mar. 19, 2020).) Section 601(d) of the Social Security Act (42 U.S.C. § 301 et seq.), as added by section 5001(a) of the CARES Act, requires the County of Orange to use these funds to cover costs that:

(1) are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19);

(2) were not accounted for in the budget most recently approved as of the date of enactment of this section for the State or government; and

(3) were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020.

At the Board’s meeting on May 12, 2020, a majority of the Supervisors rejected Supervisor Donald Wagner’s motion to allocate $75 million in grants for small businesses, which would be distributed by cities.

On May 14, 2020, Board Vice Chair Andrew Do and Supervisor Lisa Bartlett announced their proposed “Economic Support Services HEART Plan” to allocate $101 million of CARES funds on:

Help for small businesses that have remained closed

Expenditures to support communities affected by COVID-19

Assistance to nonprofit organizations providing direct services to Orange County residents

Reimbursement to Orange County cities for direct COVID-19 expenses [and]

Temporary food assistance for vulnerable and at-risk populations.

The County would distribute the $101 million equally among the five Supervisorial Districts under this proposal.

According to the Agenda Staff Report, the County Executive Officer recommends that the County allocate the remaining $453 million of the $554 million on “core services” during the ongoing pandemic. The categories of core functions include: “Medical, Public Health Expenses, Payroll for the County Emergency Response, Public Health Measures, [and] COVID-19 Related Expenses.”

The County of Orange will consider the HEART Plan at the Board’s meeting on Tuesday, May 19, 2020.

Mohammed Aly is a lawyer and executive director of Orange County Poverty Alleviation Coalition.

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