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.
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.”