Unemployment benefits: $ 600 increase ends this week

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The coronavirus relief program technically does not expire until July 31, but this coming week will be the last for which benefits are paid – as payments are only provided for weeks ending Saturday or Sunday.

Unemployed Americans will still receive state unemployment benefits, but the end of the $ 600 Congressional bonus – part of the $ 2 trillion economic assistance package adopted in March – will leave more than $ 25 million of people thousands of dollars poorer each month. And that will further expose the real pain of mass unemployment, just as many states are reimposing closings.

“These emergency unemployment benefits have been supporting families and supporting the economy for several months,” said Kali Grant, senior policy analyst at the Georgetown Center on Poverty & Inequality. “The premature termination of benefits will really delay any economic recovery that may have been underway. ”

The provision was controversial from the start, mainly because the $ 600 increase, added to state benefits, is more than two-thirds of workers earned at work, according to University researchers from Chicago.But lawmakers approved it in late March as part of a historic expansion of the country’s unemployment program at a time when health officials didn’t want people looking for work. The $ 600 lump sum payment was much easier to implement for state agencies – which were already struggling as a flood of claims submerged their outdated technology.

Congress approved the stimulus for just four months, believing the economy would rebound quickly once the coronavirus is defeated and businesses reopened. For a while that seemed to be the case – with employers hiring more than 7 million workers in May and June after cutting an unprecedented 20.5 million jobs in April.

Senate Republicans, who are expected to release their proposal this week, are generally reluctant to extend any benefits. They feel this discourages people from returning to work, a concern shared by some business owners. Instead, GOP lawmakers plan to slash the improvement by several hundred dollars and create a bonus for those who return to work.

Democrats, meanwhile, want to continue enjoying the biggest benefit until 2021. The House included this provision in the $ 3 trillion coronavirus relief bill it passed in May.

“The right thing to do for families and the economy is to expand supercharged unemployment benefits,” said Oregon Senator Ron Wyden, Democrat. “They have definitely kept the economy afloat. “

Mitigate the impact

This increased benefit mitigated the impact of the economic upheaval induced by the coronavirus, which caused the fastest and fastest job loss on record in April. Still, 4.3 million homeowners missed their mortgage payments in May, the highest level since 2011, according to Black Knight, a mortgage data company.

And, the vast majority of food banks still saw a sharp increase in demand in early July, compared to a year ago, with 50% more people served, on average, according to Feeding America, a network food banks. Just under 30% were new customers.

The $ 600 payment provides more than $ 15 billion a week to 25 million Americans, according to analysis by Andrew Stettner, senior fellow at the Century Foundation. Many use it to cover rent or mortgage, buy food, and spend on other basic needs.

Shanga McNair of Jacksonville, Florida is one of them. The veteran bartender lost his job at a brewery when the state closed earlier this spring, then returned to work at a jazz bar in early June for about two shifts a week – down from the usual six. However, state officials closed bars again at the end of June after coronavirus cases rose, sending her out of work. His side jobs as a bartender at private parties and banquets were also gone.

The federal boost of $ 600, on top of her weekly state benefits of $ 275, is less than what she did while working. She barely pays her rent but has allowed her to meet her bills. The 40-year-old, who also visits a local pantry on occasion to complete her groceries, believes that if Congress does not extend the improvement, she has three months to find a job before being kicked out.

So far she has had no luck. McNair sent dozens of requests to restaurants, warehouses, customer service companies, and offices, but they didn’t get anywhere. She even filled out an application while taking a bite at Popeye after seeing the manager hold several jobs, but was told that there was a hiring freeze.

“I hate depending on the government, but it’s all out of my control,” said McNair, who puts two girls in college and has never perceived unemployment before. She wrote to her elected officials from both parties. “You can’t just pull the mat because it’s not over. ”

Eliminating the federal benefit will reduce workers’ weekly unemployment payments from 50% to 85%, depending on their state, Stettner said.

As Congress debates what to do, more and more people are at risk of losing their jobs in new rounds of layoffs. The United States and United States airlines have warned this month that tens of thousands of employees may be laid off or laid off this fall. JCPenney announced last week that it would cut 1,000 jobs in its executive and regional offices. Other retailers, including Brooks Brothers and Neiman Marcus, have filed for bankruptcy.

In addition, the spike in coronavirus cases has prompted at least two dozen states to suspend or reverse their reopening plans, which will also cost people their jobs. For example, California last week ordered the closure of bars, cinemas and indoor restaurants in restaurants statewide, as well as the closure of gymnasiums, places of worship, indoor shopping malls, hair salons and some offices in many counties.

The impact is already showing in the data. The states with the largest increases in coronavirus cases at the start of the month also recorded the largest increase in initial jobless claims, according to William Rodgers III, chief economist at the Heldrich Center for Workforce Development at Rutgers University.

Some economists fear that the nascent job recovery will derail, sending more people to unemployment lists.

“Labor market conditions remain weak and the risk of further permanent job losses is high, especially if activity continues to be disrupted by repeated virus closings,” said Rubeela Farooqi, economist Chief American at High Frequency Economics.

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