COVID-19

Millions of unemployed workers now rely solely on state benefits — and they vary wildly

Kristin Schwab Aug 3, 2020
Heard on: Marketplace
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A message on a car window demands a better system for supporting unemployed workers in Florida. Joe Raedle/Getty Images
COVID-19

Millions of unemployed workers now rely solely on state benefits — and they vary wildly

Kristin Schwab Aug 3, 2020
A message on a car window demands a better system for supporting unemployed workers in Florida. Joe Raedle/Getty Images
HTML EMBED:
COPY

This week, more than 30 million people started facing their economic futures without an additional $600 a week in federal unemployment benefits.

It means that until Congress hammers out a deal for more pandemic relief, the vast majority of those without jobs will have to rely on state unemployment insurance to carry them through.

But geography plays a big role in how much unemployed people get. For instance, in Mississippi, the maximum benefit is around $230 a week. In Massachusetts, it’s over $800.

And the gap isn’t just about cost of living. “The big difference is the philosophy,” said Christopher O’Leary, a senior economist at the Upjohn Institute for Employment Research. “Is unemployment something that supports the labor market or is it a business cost to be minimized?”

There is no federal standard for unemployment benefits, so states create their own rules around who qualifies, how much they get and for how long.

“In some states like Florida and North Carolina, only about 10% of people who are unemployed are even able to get a benefit,” said Michele Evermore, a senior policy analyst with the National Employment Law Project.

That impacts people’s access to food and shelter. During a pandemic, it also dramatically increases their risk of getting sick.

“Because of monetary concerns they have to take an unsafe job,” said Evermore. “And that’s actually going to spread the virus and slow the recovery even further.” She added that Black and Latino workers may suffer most because states with the smallest benefits have the biggest minority populations.

And all of this can have direct effects on a state’s economic health. Because while that extra $600 meant a lot to workers who lost their jobs, it also meant a lot to all the businesses relying on people who were spending it, said Sylvia Allegretto, a labor economist at the University of California, Berkeley. “Unemployment benefits have a really important effect of propping up the greater economy.”

COVID-19 Economy FAQs

Are people still waiting for unemployment payments?

Yes. There is no way to know exactly how many people have been waiting for months and are still not getting unemployment, because states do not have a good system in place for tracking that kind of data, according to Andrew Stettner of The Century Foundation. But by his own calculations, only about 60% of people who have applied for benefits are currently receiving them. That means there are millions still waiting. Read more here on what they are doing about it.

Are we going to see another wave of grocery store shortages?

Well, public health officials are warning that we could see a second wave of the virus before the end of the year. And this time retailers want to be prepared if there’s high demand for certain products. But they can’t rely totally on predictive modeling. People’s shopping habits have ebbed and flowed depending on the state of COVID-19 cases or lockdowns. So, grocers are going to have to trust their guts.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out Tuesday from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

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