Many laid-off government workers aren’t eligible for unemployment
Many laid-off government workers aren’t eligible for unemployment
The Supreme Court is giving the Trump administration more time to pay for foreign aid work done before the administration froze foreign assistance. The high court ruling puts a temporary hold on a lower court order that said the money had to get paid by Thursday.
Among those caught up in all this are independent contractors who have contracts with the U.S. Agency for International Development. Their work has evaporated. But they can’t file for unemployment.
Marketplace’s Nancy Marshall-Genzer spoke with “Marketplace Morning Report” host David Brancaccio to explain why exactly that is. The following is an edited transcript of their conversation.
Nancy Marshall-Genzer: David, unemployment benefits are funded by a tax companies pay on their employees’ wages. But contractors aren’t employees; they’re considered small businesses. Cathy Creighton at Cornell University’s School of Industrial and Labor Relations explained it to me this way:
Cathy Creighton: Pretty much in almost every state in the country, independent contractors do not get unemployment insurance benefits. And that’s because they don’t pay into the system, so they don’t get money out of the system.
Marshall-Genzer: Creighton says just a very few states allow independent contractors — these gig workers — to collect unemployment benefits.
David Brancaccio: So this brings us to government contractors who are caught up in the Trump administration’s work to dismantle USAID in the name of cost-cutting. Work for many of those contractors is drying up.
Marshall-Genzer: Yes. Some are feeling the ripple effects of the dismantling of USAID. So, for example, I talked to one contractor, Leigh Ann Evanson, who has no work right now. She just had a $40,000 contract canceled. She’s essentially a freelancer. She’s hired by nonprofits who do work for USAID. She writes reports and grant applications for them. She has no work now, and as we said, isn’t eligible for unemployment. She’s under a lot of stress. Here’s what she said when I asked if she was sleeping at night.
Leigh Ann Evanson: I am but I wake up with like, fingernail marks in my hands ’cause I’m clenching my fists. I used to do that when I had a full-time job, which is why I quit.
Marshall-Genzer: Evanson is trying to keep her sense of humor, but she is in a tight spot. She may have to dip into her retirement savings. She got her last paycheck just a few days ago. But she’s also worried about people around the world who rely on USAID programs. She specially mentioned women with HIV who are pregnant and can’t get medication that would prevent their HIV from being transmitted to their babies.
Brancaccio: It appears this is among ripple effect of the Elon Musk advisory groups cuts. But did Evanson work directly for the federal government or not?
Marshall-Genzer: Right. Many of the nonprofits she works for aren’t getting paid by USAID, so they’re canceling their contracts with people like her. Evanson told me she liked the flexibility of working for herself — being a gig worker — but it is very difficult not having access to any kind of safety net. Evanson is part of a networking and peer support group of more than 150 self-employed government contractors and consultants; they’re all in the same boat. She says one group member calculated that just 22 of them have lost more than $1 million so far.
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