This spring, the coronavirus pandemic led to the biggest unemployment spike in U.S. history.
Because of the massive influx of unemployment insurance applicants, millions of people reported their unemployment benefits, which they have paid taxes toward for years, were delayed. Or never came at all.
And millennials, who are currently between the ages of 24 and 38, may be the group hit hardest by the economic turmoil of the pandemic. According to Pew Research Center, 35% of Americans between ages 18 and 29, and 30% of those between ages 30 and 49 say they, or someone in their household, has lost their job.
CNBC Make It spoke with young unemployed workers and economists to hear how millennials have been impacted by unemployment and learned how the pandemic has laid bare the critical role of our unemployment system, as well as its flaws.
All of the unemployed workers CNBC Make It spoke with mentioned difficulties filing for unemployment.
"I had never applied for unemployment before, this was my first time experiencing what it actually takes," says Marla Frezza, 31, who lost her job as a bartender in New York City in early March. "It took time, energy, sweat, tears, hundreds and hundreds — probably a thousand — phone calls to unemployment just to simply file. It was one of the worst experiences of my life."
Experts say these struggles are unsurprising, given the design and infrastructure of the U.S. unemployment system.
"Our unemployment insurance offices are working on rather antiquated technology," says Cecilia Rouse, economist and dean of the School of Public and International Affairs at Princeton University. "Putting that much pressure on this system, which is so decentralized and somewhat fragmented, poses the challenges."
Arcilla Trinidad, 28, lost her job as a flight attendant at the end of April.
"It actually took 12 to 13 weeks for me to receive my payment, and that's because the New Jersey system is backed up," she says. "But I know a lot of flight attendants [who] didn't receive their unemployment longer than I have. They still haven't. And they've been unemployed since April."
Indeed, the U.S. unemployment rate is currently over 10%, but millions of applicants have not received the benefits. And figures suggest that who has, and has not, received unemployment benefits falls along the lines of race.
According to an analysis by ProPublica, just 24% of jobless White workers, 22% of jobless Hispanic workers and 13% of jobless Black workers have received unemployment benefits during the pandemic.
Some, however, earned more on unemployment during the first few months of the pandemic than they did before, thanks to the extra $600 weekly unemployment boost offered by the Coronavirus Aid, Relief, and Economic Security Act, better known as the CARES Act.
The boost ended in late July, but many of those CNBC Make It spoke with said that the extra $600 was a lifeline.
"I was allotted $298 per week in unemployment," says Freeza, "So I very much depended on that extra $600 weekly to feed myself, to pay my bills, pay my rent, take care of my dog. This wasn't an extra kicker that let me buy a new Gucci bag."
The extra $600 meant that a worker earning the median $1,000 per week had roughly as much money coming in as if they were working, but it also meant that workers who earn less than the median were bringing in even more.
Researchers at the University of Chicago estimate that roughly two-thirds of unemployed workers made more from enhanced unemployment insurance than they did when they were working.
As conversations about further relief packages began, critics of the extra $600 said it would disincentivize people from working, while others argued that unemployment benefits and the minimum wage were not high enough to begin with.
Rouse says economic research is relatively clear on the matter.
"Economists have studied the effect of larger unemployment insurance benefits and expanded unemployment insurance benefits using experimental settings back in the 1980s. They've looked at the experience from the Great Recession. And some have started to look at the experience from the Covid-19 [pandemic] and the CARES Act," she says. "And what they've seen in all of those situations is that these expanded unemployment insurance benefits do not actually discourage workers from taking jobs."
And then there's the issue of wages.
"The federal minimum wage is $7.25, which is $290 a week," says Rouse. "But, you know, no one can live off of $7.25."
Now, some say the success of stimulus measures such as the additional $600 in unemployment as well as the one-time $1,200 stimulus checks sent out in April, may provide insight for future policy.
People such as former presidential candidate Andrew Yang say that the coronavirus stimulus may be our widest and most compelling experiment with universal basic income, a policy he has long championed.
Universal basic income, or UBI, is a system in which governments give cash directly to citizens — no strings attached.
"UBI is a solution. It's part of a toolkit of solutions to the pandemic right now. It's one way to keep people and families afloat during this crisis," says Suraj Patel, an adjunct professor at NYU who previously ran to represent New York's 12th Congressional District. "We're talking about providing Americans with a check every single month to cover expenses during the time that the economy is shut down. And I'm willing to say experimentally we do it until coronavirus is gone. But I'm willing to bet that after that, people are going to be used to the idea."
However, there is no such policy currently on the horizon, and Rouse says that young workers will be financially scarred for years to come.
"I would expect that especially for millennials, we're going to see an impact on their wealth accumulation, which has an impact on some of these typical life transitions and purchases and cushions that we expect over the life-cycle," she says, referencing traditional markers of adulthood such as buying a home, starting a family, creating an emergency fund or saving for retirement.
Frezza, for instance, says she has been forced to diminish her savings to cover her day-to-day costs, which she says will pose challenges down the road.
"I feel like if you're a millennial right now, you're damned if you, damned if you don't," she says.