More than 315,000 gig workers and independent contractors in Texas will lose unemployment relief without action from Congress

San Marcos Barbershop at The Square in San Marcos in April. More than 315,000 Texas gig workers or independent contractors, like many barbers are, could lose their unemployment assistance on Dec. 26, when a federal coronavirus relief benefit ends. Credit: Eddie Gaspar/The Texas Tribune

by Mitchell Ferman, The Texas Tribune.

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.

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“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.

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“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 on Wednesday decided to extend their negotiations for new legislation into next 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.

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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.

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.

And at the end of December, a federal moratorium on evictions will end, which comes the same week as many Texans will likely lose their pandemic-specific unemployment benefits — a financial cliff that many Texans are nervously approaching.

“That means they’re going to have less money to spend, that there are going to be more issues down the line,” said Jesse Thompson, an economist with the Federal Reserve Bank of Dallas.

And without another legislative package, Thompson said the economic rebound will be “dampened.”

“The human toll — ‘Oh my gosh, what’s going to happen to my budget, what’s going to happen to my ability to pay bills?’” Thompson said.

Economists said finding a job paying decent wages is tricky during the pandemic because of “limits on business activity and just being conscious about not wanting to catch or spread the virus,” Thompson said.

But Aslynn Rose, a 50-year-old professional show dog handler in Cedar Creek, couldn’t take sitting at home any longer after collecting unemployment payments in the spring and into the summer. For the sake of her mental health, Rose said it was worth “taking a loss” financially by working at the grocery store.

“It was a lot of physical work,” Rose said. “They had me wrangling carts and stuff. I’m making $14 an hour. That’s fine if you’re 18 and going to college. It was hard.”

After three months of working at H-E-B, dog shows started up again in August and Rose quit the grocery. Rose notified the workforce commission and is now back working full-time to continue her 15-year career.

Financially, Rose said she was never in trouble and was able to manage her budget, but it wasn’t easy.

“It was hell,” Rose said. “It was awful. I was bagging groceries.”

As the pandemic continues and in-person business remains uncertain, Reinke is still trying to find a way to make everything work. She receives $200 per week in unemployment payments.

“We’ve been heavily relying on my husband’s income and thankfully he’s an essential worker,” Reinke said of her spouse, the UPS driver. “But for me, people are broke, they’re staying home, they don’t want that one-on-one interaction with someone touching them. My whole industry has tanked.”

An agency spokesman said unemployment “claimants are encouraged to utilize employment resources such as the Skills Enhancement Initiative and Workforce Solutions Centers,” both online tools the workforce commission recommends for people seeking jobs.

Reinke has seen the workforce commission postings about jobs. But changing careers would require going back to school or settling for a lower wage job without much career advancement opportunity.

And Reinke’s finances have already plummeted, even before unemployment runs out for her and hundreds of thousands of other Texans that are independent contractors.

“I have no savings at all,” she said.

Plus, Reinke would like to continue her career as a barber, but isn’t hopeful she’ll be able to hang on for life to go back to normal — or make up for what she lost.

“I feel like I’ve lost my career — like I have nothing now,” she said. “It’s hard. I feel like I’ve worked all those years to get where I was and now I have nothing.”