When $600-a-week pandemic unemployment checks run out, what then?
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The $600 a week in extra benefits provided to every jobless worker who’s on unemployment insurance right now is set to expire July 31. Part of the CARES Act, the Federal Pandemic Unemployment Compensation program is being paid to roughly 29 million Americans. And if Congress doesn’t do something by the end of next month, it could get economically ugly.
Since COVID-19 hit in March, millions of workers have been furloughed or laid off. Congress has responded by adding the extra unemployment money to every state unemployment check in the country. Economist Michael Strain at the American Enterprise Institute said that is “providing a lot of income security to workers, and it supported overall consumer spending.”
Those payments have replaced 10% to 15% of Americans’ pre-pandemic income. If the money’s cut off at the end of July, Michele Evermore at the National Employment Law Project said nearly 30 million unemployed Americans will be thrown back onto state benefits alone.
“I think people will be very shocked, the day that the $600 stops,” Evermore said. “Workers can earn as little as, like, [in] Arizona, the maximum benefit is only $240 a week.”
She thinks Congress should renew the program at $600 a week until unemployment falls below double digits again.
But Strain argues that the current benefit level is so high it discourages people from seeking new employment.
“Ideally, you would extend supplemental unemployment benefits, but you’d put them on a glide path — start at $300 in high-unemployment-rate states and kind of phase it out from there,” Strain said.
What should not be an option, according to Mark Hamrick at Bankrate.com, is for federal pandemic unemployment checks to stop flowing on a dime in the last week of July.
He said that would raise the risk “that this economic damage does persist because coming into this crisis, most Americans were living paycheck to paycheck, and then, all of a sudden, for many the paychecks ended.”
And they won’t start up again until the unemployment rate falls and there are jobs to go back to.
COVID-19 Economy FAQs
So what’s up with “Zoom fatigue”?
It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.
How are Americans spending their money these days?
Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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