The $ 600 unemployment benefit, created by a federal coronavirus relief law in March, is in addition to traditional benefits paid by states.
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These state benefits averaged about $ 308 per week (about $ 1,232 per month) in June, according to the most recent data from the Ministry of Labor. They have dropped as low as $ 183 per week ($ 732 per month), on average, in Louisiana.
But states also set minimum weekly amounts – a benefit floor, in other words – which can be as low as $ 5 per week.
For many, the federal grant – which was an additional $ 2,400 per month – was a lifeline that helped them pay their bills.
6 million people
Left with just the state allowance, around 33% of the unemployed cannot afford basic living expenses and will have to dip into savings in August to cover them, according to a survey released on Wednesday by Morning Consult, a firm of ‘marketing studies.
That’s about 6 million people, according to John Leer, the company’s chief economist.
This is about a third of the 18.1 million UI beneficiaries and an additional 1.2 million people who applied for benefits last week, according to the most recent data from the Ministry of Labor.
The unemployment crisis has disproportionately affected low-income Americans, who are less likely to have built up a stockpile of savings to withstand the current climate, Leer said.
“Increase in unpaid bills”
And it would be difficult to make ends meet just by adjusting a budget – eating less in restaurants and buying less clothes, for example – since survey respondents indicated that it was the cost of essentials like rent and food. , not superfluous items, which was out of reach. , Leer said.
“I’m not talking about luxury and going on vacation,” Leer said. “Your car payment is still your car payment.
“It’s not adjustable,” he added. “There is a real risk of an increase in delinquencies. ”
The survey’s indication of financial hardship is likely to be underestimated, Leer said, because it only affects those who receive unemployment insurance. Millions of Americans may be out of work but are not collecting unemployment benefits.
And the survey did not take into account the more than 12 million workers who were receiving benefits under the Pandemic Unemployment Assistance Program, which the federal government created in March to cover the self-employed, employees. office workers and other workers previously ineligible for unemployment assistance. About 830,000 more people filed for PUA benefits last week, according to the Department of Labor.
Lawmakers are currently negotiating another plan for federal financial relief, including whether to extend, replace or eliminate the $ 600-a-week unemployment hike. Democrats want to continue payments until early next year or gradually cut aid as the unemployment rate drops. Republicans have proposed reducing weekly aid to $ 200 per week, eventually moving to a system that replaces up to 70% of lost wages.
The Morning Consult survey interviewed a representative sample of 2,200 American adults, weighted by age, gender, level of education and region. It was conducted July 23-25 and has a margin of error of 2 percentage points.