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
New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?
Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
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