End of $600 federal payments will have significant impact, economist says

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INDIANAPOLIS, Ind. — The Federal Pandemic Unemployment Compensation payments are set to expire this week, unless Congress makes any changes. This means unemployed Hoosiers will no longer receive the $600 weekly payments on top of their state benefits.

“It’s kind of a double edged sword,”Patrick Tamm, President & CEO of the Indiana Restaurant & Lodging Association, said. “It has really hampered our ability to get people to come back and work, particularly in restaurants and hotels as we’re bringing people back to work. At the same time though, we’ve had some significant hotels reopen but they’ve reopened with a fraction of what they used to have.”

Tamm counts some 80,000 jobs make up the tourism sector of Marion County.

“We don’t have 80,000 people working right now in the hospitality and tourism sector,” Tamm said.

Tamm estimates about half of downtown Indy’s restaurants’ annual revenue comes from conventions and large gatherings. They rely on visitors spending money.

“It means that the 500 runs at 100%,” Tamm said about getting the city back on its feet. “Well, they’re going to run at 25% fan base. It also takes 60-80 thousand people coming in for conventions and groups.”

Economists explain the impact of ending the unemployment compensation payments.

“I think you’re going to see a lot of businesses really get hurt because of that spending not being there,” Kyle Anderson, economist with the Kelley School of Business at IU, said. “If those businesses are hurt, they’re going to continue laying people off, and it just becomes a cycle of poor economic performance. That’s what a recession is. That’s what a downturn is.”

Anderson said the individual $600 weekly payments help lift the economy by generating about $300 million a month in Central Indiana.

“We’re going to see people not being able to make their payments and really struggling to get by, and it’s going to affect everybody,” Anderson warned.

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