How Delaware's low unemployment benefits take an 'exhausting,' 'depressing' toll

Sarah Gamard
Delaware News Journal

A woman in Newark sleeps in her car when money for a motel runs out, while another scrapes by on eggs and rice. 

A family in Lewes can't afford to fix their broken heater or their car so they make do without either.

And in Dover, a single mother of six agonized over whether to continue her pregnancy, knowing she no longer had the funds for another mouth to feed.

Since the start of the COVID-19 pandemic, a surge of jobless Delawareans have struggled to survive on the state's unemployment benefits — the lowest in the region.

Delaware's weekly unemployment benefit — based on a person's income before they lost work — can range from a minimum of $20 to a maximum of $400, which is less than its neighboring states.

Pennsylvania’s maximum rate is $573; New Jersey’s, $713; and New York’s, $504.

Maryland and West Virginia’s are $430 and $424, respectively. That can be paired with the pandemic-induced weekly federal unemployment benefit, which last year was $600 and this year is $300.

Those on unemployment are victim to Delaware's business-friendly politics, which have resulted in low taxes on companies that pay for the unemployment system, a review by the Delaware Online/The News Journal found.

Unemployment experts cite Delaware's low taxes on employers, which are responsible for financing the state’s multimillion-dollar unemployment trust fund. Raising Delaware’s weekly benefit would likely mean raising those taxes to avoid completely depleting unemployment funds.

Lewes resident Tracey Tillman and her family have been living off the minimum PUA unemployment benefit of $133 a week during the pandemic.

But that would be a feat in a state where corporate-minded, business-friendly politicians routinely shy away from tax-increase proposals.

The longstanding faults of Delaware’s unemployment system were laid bare during the COVID-19 pandemic when Gov. John Carney ordered business closures and limitations to slow the spread of the virus. The Unemployment Division expanded its program to allow people to apply if they lost work due to the virus and since then has received more than 190,000 claims.

By April, the division was overwhelmed with an unprecedented number of claims that led to jobless residents across the state waiting weeks or months before seeing a penny.

Nearly a year later, that backlog still exists, and people across the state have emailed and called Delaware Online/The News Journal to say they have been waiting months to get paid.

But even some who are receiving their benefits say it's not enough to get by.

'You don't want the kids to see it'

Dover resident Tanisha Dennis, 40, is a single mom supporting six children on a weekly unemployment benefit of $364 without federal aid.

The Department of Correction officer had to leave work after injuring her arm during on-duty training. She said she first filed for unemployment in May and didn't get her first payment until a week before Christmas.

She's been forced to find new ways to make money. She started delivering for DoorDash, GrubHub and Amazon. She also used some of her stock market investments to cover electricity. She sold her Jeep and Audi and now borrows her mother’s Nissan.

“The $400, to me, is like a slap in the face because I worked all these years, and that’s not going to do anything, really, to pay off all the bills,” Dennis said.

When Dennis became pregnant, she deliberated over whether to have an abortion because she didn’t know whether she could afford another mouth to feed.

She ultimately decided to have the child, a boy who's now just a few weeks old. Dennis’ mother helps with buying Pampers, milk and other baby needs.

She said she's tried to connect with the Special Supplemental Nutrition Program for Women, Infants, and Children, a federal grant program that provides nutritious foods to low-income women during and after pregnancy, but no one answers the phone.

Dennis prides herself on never having needed any type of government assistance, but now she relies on food stamps to feed her six children. Asking Social Services for help to take care of her kids’ basic needs, she said, tore her apart.

When she gets those few moments alone during the day, it all hits her at once. What will her next move be? How will she pay her bills, feed her children and keep a roof over their heads?

“Sometimes, the tears will overflow, but you don’t want the kids to see it because you don’t want your kids to know what’s really going on or how much you’re struggling,” she said. “I’ve always pushed hard for years. And because of my kids, I won’t stop pushing.”

The little losses hurt, too. No more traveling cheerleading team for her two teenage girls. No more family meals at favorite restaurants like Texas Roadhouse, Red Lobster, Olive Garden. They shouldn't be eating out during the pandemic anyway, she tells her kids, hoping to play it off. 

She's also had to forego small acts of self-care, like getting her hair done, which has taken an extra toll on her mental health.

“If your hair’s not done, you look in the mirror sometimes, you can make yourself feel depressed,” she said. “In the African American community, hair is important in how you present yourself outside in the world. It’s important because you don’t want to go around looking like nobody loves you, nobody cares about you.”

More:How Biden's $1.9 trillion COVID-19 stimulus package affects Delaware unemployment benefits

'I didn’t sign up for this'

Shannon Murphy sits for a portrait in her hotel room Wednesday, March 10, 2021. Murphy has been homeless for the better part of a year after complications stemming from COVID-19.

Shannon Murphy, 39, spent most of her life in Newark before she lost her retail job due to neck and spine issues at the start of 2020. Then she lost the room she was renting when the homeowner decided to sell the house.

It should have been easier for Murphy to find work and a new home after taking time off for her health, but it wasn’t long until the pandemic disrupted the job market. Ever since, she’s been hopping from motel to motel, surviving on food stamps and a $161 weekly unemployment payment from the state.

Even with federal unemployment, she said the total is barely enough to cover her cellphone bill and gas. At least once a week, she can’t afford to sleep anywhere but inside her car. Some winter nights, she’s had to keep the engine running to keep from freezing.

“I don’t want this life. I didn’t sign up for this,” she said. “How am I ever going to ever be able to get out of it?”

Murphy suffers from an autoimmune disease that’s been exacerbated by stress and described her struggle to find a bed every night as a “full-time job.”

Shannon Murphy sits for a portrait in her hotel room Wednesday, March 10, 2021. Murphy has been homeless for the better part of a year after complications stemming from COVID-19.

“The only thing I can think about is, ‘What’s my next move? How am I going to get through the week? Am I going to have a place to stay? Where am I going?’” she said. “It really messes with my mind.”

Murphy said she tried finding a bed at the Sheraton Hotel near New Castle that was converted into a homeless shelter, but that they turned her away and she doesn’t know why. She said she can’t rely on her family members and is scared to go to other homeless shelters because she fears it will ruin what’s left of her mental health.

“I’m trying to hold onto that (my mental health) as much as possible,” she said. “I don’t have a lot left.”

More:Delaware Senate approves $15 minimum wage. What happens next?

'It's been a nightmare'

Lewes resident Tracey Tillman and her family have been living off the minimum PUA unemployment benefit of $133 a week during the pandemic.

Delaware’s low rate has also hurt the self-employed.

That includes Lewes resident Tracey Tillman, 51, who makes $133 a week on state unemployment plus $300 from the federal government.

It's Delaware’s lowest benefit amount offered to self-employed workers — and the state has the lowest minimum Pandemic Unemployment Assistance benefit for self-employed workers in the region.

Tillman used to make money selling $5 jewelry at venues such as flea markets and bridal shows, but lost work once the pandemic hit because she feared contracting COVID-19. She considers herself “one of the lucky ones” because she got her first payment in July after first filing for unemployment in March.

The weekly $433 is the only income coming in for Tillman and her husband, who are also supporting two children with the help of food stamps. Tillman’s husband is also out of work and not earning any unemployment benefits. It’s unclear when either of them will start making an income again. Both are afraid to find work because they are scared of exposing Tillman, a cancer survivor with diabetes and asthma, to the virus.

Lewes resident Tracey Tillman and her family have been living off the minimum PUA unemployment benefit of $133 a week during the pandemic.

“It’s been a nightmare,” Tillman said.

Tillman’s in-laws, who are in their 80s, have helped the family pay their bills and cover the cost of internet so their 12-year-old son can continue online school. She said she owes them at least $12,000.

Meanwhile, unexpected expenses have popped up. Around Thanksgiving, the family’s heating system broke, and the family hasn’t been able to afford to fix it because the starting rate is $200. They endured the damp, snowy winter with four space heaters.

In January, their truck’s engine broke. Repairing it would cost around $500, so they’ve had to rely on the in-laws ever since to transport them to BJ’s for groceries. Tillman created a GoFundMe a few weeks ago to try to pay for the car and heater repairs, but no one has donated, she said.

In between, the family struggled through the holidays, finally mustering enough enthusiasm to pull a 3-foot tree from the shed and set it up on a table with the cards they'd received. Tillman was devastated that she could afford only one small gift for each of her kids; her neighbors pitched in with a couple of pairs of jeans and shirts.  

“The meaning of Christmas was there," she said, "but it was just not as celebratory.” 

More:Delaware has struggled to move to a $15 an hour minimum wage. Why supporters have new hope

'I feel like I’m in the Great Depression'

Newark resident Hayley Mercado, 27, filed for unemployment in March after her gig as an assistant general manager at a gym was upended by the virus.

She didn’t go back to work once her gym reopened because she was scared of spreading the virus to her high-risk family members, including her grandparents, with whom she was living at the time.

Mercado makes $124 a week on state unemployment with the $300 federal benefit while working part-time gigs. It’s not nearly enough to cover basic expenses that she said can add up to $1,700 a month.

She moved into her own apartment over the summer, partly because she feared exposing her family to the virus. At the time, she thought things would soon go back to normal and that she would be able to afford rent. She was wrong.

Even with working for DoorDash and InstaCart on top of other odd jobs — hairstyling, cleaning, restoring shoes — she can’t afford to pay for anything except bills. And even then, she’s still behind and has faced multiple threats of eviction and repossession of her car.

“I’ve done more jobs in this last year than I’ve done in my entire life,” she said. “It’s really stressful and really just mentally and physically exhausting.”

Some weeks, she lives off a carton of eggs and boil-in-a-bag rice.

“I feel like I’m in the Great Depression,” she said.

More:Why the Delaware attorney general wants President Biden to cancel up to $50,000 in student loans

‘Keeping things the way they are’

Rep. Ed Osienski, D-Newark (left), and Sen. Trey Paradee, D-Dover, field questions from reporters on Thursday about their recently filed bill that would legalize recreational use of marijuana in Delaware.

State lawmakers are ultimately responsible for deciding how much people can make on unemployment.

Despite touting a bill earlier this year that exempted unemployment benefits from state taxes, the Statehouse doesn't appear ready to raise taxes on businesses to allow for higher payments.

Voters replaced several moderate Democrat and Republican lawmakers with progressives in November, but it's unclear if there are now enough lawmakers who would support such a bill.

Any changes would likely be based on recommendations from the Unemployment Insurance Advisory Council, a group of lawmakers, officials and stakeholders who help recommend changes to the benefit amount and tax structure.

“I think $400-a-week benefits are appropriate right now,” said Rep. Ed Osienski, D-Newark, who chairs the council. “We know the cost of living continues to rise, so naturally we will have to keep taking a look.”

The Delaware General Assembly raised its unemployment benefit amount to $400 in 2019 — about six months before the Wuhan, China, government reported its first cases of COVID-19.

For 17 years before that, Delaware’s maximum benefit was $330 a week. Just before the increase, it was the 10th lowest benefit in the country. The state now has the 17th lowest benefit.

State officials are considering overhauling the tax structure to make it more modern and equitable for small businesses, but it’s unclear if higher benefits would be part of that package.

Division of Unemployment Director Darryl Scott  said there is a process before there are any increases in unemployment benefits in Delaware.

Division of Unemployment Director Darryl Scott said his agency won’t make recommendations to the General Assembly until early 2023 at the earliest, partly because his staff is still occupied with the backlog of pandemic-related claims.

When asked if the General Assembly would raise taxes on businesses, Osienski said he did not have a definitive answer because the council will need to see projections of different tax structure changes.

“Any proposal on increasing taxes on businesses at this time is not good,” Osienski said, citing the pandemic’s toll on the economy. “Until we see those projections, we’re just going to be keeping things the way they are.”

In 2019, Delaware, on average, taxed employers at $224 per employee, which was below the national average, according to the U.S. Department of Labor.

The federal government recommends that states replace 50% of a person’s wages, but in 2018 the state on average replaced 39% of a person’s wages, according to research published by the National Academy of Social Insurance.

In the past several years, because of Delaware’s relatively low benefits and a confusing claim-filing system, fewer than a third of people who qualify for unemployment have actually filed for it.

That rate of claimants has gradually dropped for more than a decade. The low rate could run the risk of dooming the state’s unemployment system to eventually become irrelevant, experts say.

That could have unintended consequences. In the end, other state agencies end up paying more tax dollars to feed and house those jobless people, and businesses lose out on potential consumers, Scott said.

“If it’s going to be a safety net, let’s try to make sure it’s an adequate one," Scott said.

More:Here's how to make sure your Delaware unemployment benefits are exempt from state taxes

Businesses 'getting away with paying less than they should'

Unlike other states, Delaware also doesn’t have the ability to raise taxes on businesses during recessions to help pay for the trust fund in order to keep it from depleting. Data from the last decade show that the current tax structure hasn’t even been sufficient in properly financing the trust fund since the last recession, experts say.

But even with an unemployment tax system that's considered one of the most outdated in the country, Delaware can still raise benefits.

Lawmakers simply don't want to, experts say.

Rob Pavosevich, the former lead actuary at the U.S. Department of Labor’s Office of Unemployment Insurance who was contracted by Delaware last year to build an unemployment forecasting model for the state, argues that the low benefit is a direct result of intentional political decisions by lawmakers and the governor.

“States don’t increase their benefits because employers think they shouldn’t be paying any more, and it’s clear that Delaware is underfunding their program right now,” Pavosevich said.

“Right now, they (Delaware employers) are getting away with paying less than they should.”

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Sarah Gamard covers government and politics for Delaware Online/The News Journal. Reach her at (302) 324-2281 or sgamard@delawareonline.com. Follow her on Twitter @SarahGamard.