Protesters in Florida caravan to Senator Rick Scott's office to ask him to vote to extend federal unemployment benefits. Joe Raedle/Getty Images
COVID & Unemployment

The $600-a-week unemployment aid expired, but millions are still being laid off

Samantha Fields Aug 5, 2020
Protesters in Florida caravan to Senator Rick Scott's office to ask him to vote to extend federal unemployment benefits. Joe Raedle/Getty Images

A few weeks ago, on his last day of vacation, Seth Pierson got a call from work – he was being laid off. It happened just two days shy of his 14th work anniversary, and just two weeks before the extra $600 a week in federal unemployment benefits expired.

“Without that, my surviving past the next couple of months isn’t really possible unless I very quickly get a new job,” said Pierson, who lives alone in a rent-stabilized apartment in Los Angeles. “There was no wiggle room in my life at all before this, and there’s somehow even less now.”

Several million people have filed for unemployment in the last few weeks alone, just as many of the benefits and protections in the CARES Act were winding down. Some will get a week or two of $600 checks from the federal government – for Pierson, that will be almost enough to cover one month of rent. But anyone who was laid off at the very end of July or in August will get nothing from the federal government, and will have to rely solely on state unemployment benefits.  

“They’re going to be more likely to be the ones that are evicted from their apartments and houses, they’re going to be the ones that fall into poverty right away,” said Adriana Kugler, a professor of public policy and economics at the McCourt School of Public Policy at Georgetown University. “The really worrisome thing is we can expect more people to continue to lose their jobs over the next few months.”

The week the CARES Act was passed, in late March, first-time unemployment claims hit a then-record high of 3.3 million. Last week, as much of the CARES Act expired, 2 million people filed first-time unemployment claims. And while 78% of people who lost jobs in the early days of the pandemic said they expected to get their position back, there are indications that may not be the case with many of the jobs being lost now.

“Now we’re starting to see business closures, we’re starting to see big companies – icons in the American economy – declare bankruptcy,” Kugler said. “Those jobs are not coming back. So in that sense, many of these new wave of job losses are going to be much more permanent.”

Pierson knows there’s no chance of going back to his old job, as a one-man photo department for an educational nonprofit. He’s already started looking for a new job, he said, “but strangely, many companies don’t seem really eager to hire people right now.”

If Congress does not renew the $600 a week, or pass some other kind of federal unemployment benefits soon, Pierson isn’t sure how he’s going to get by if he doesn’t find another job in the next month or two.

“I didn’t know before this what would happen if literally any life expense would have come up – if my super old car had died, what would happen if I needed a new prescription that was extra expensive,” he said. “Now, I’m like, what happens three months from now when I need to refill my existing prescriptions?”

According to Howard University economics professor William Spriggs, it “is going to be a catastrophe” if the 30 million people who are currently getting unemployment have to survive on state benefits alone – which average about $333 a week, nationally.  

“These workers do not have wealth, they don’t have liquidity, they’re not sitting on bank accounts, they don’t have 401(k)s to draw on,” he said. “When they get reduced to a check that’s only $140 a week, they will be forced into deciding, what are we going to eat? Are we going to eat? And they’re at the mercy of their landlords because we have removed the moratorium on evictions.”

In the second quarter of the year, from April to June, the U.S. saw a $795 billion drop in wages, according to last week’s GDP report – but those $600 a week payments from the Federal Pandemic Unemployment Compensation program made up for $639 billion of that loss.

“This is kind of a simple math,” Spriggs said. “You take that $639 billion out of the equation, and the economy tanks.”

Democrats and Republicans in Congress are still at odds over what to include in the next coronavirus relief package – Democrats want to extend the $600 a week in federal unemployment benefits through the end of the year, Republicans want to cut it to $200 a week. In the meantime, millions of people are in limbo. 

For Pierson, who calls himself an “elder millennial,” the uncertainty and economic anxiety feel all too familiar.

“My life and my career have been dictated only by the contours of American collapse, from 9/11 when I was in high school, to Hurricane Katrina, which drowned my hometown of New Orleans, to the 2008 crisis, to right now,” he said. 

“I have lived in such a steady state of economic anxiety for so many years that, in an emotional sense, this doesn’t feel like all that much heavier or riskier of a situation… I don’t know if there’s a degree to which I’m emotionally just bottling some of that anxiety up, or if I am just recognizing now the degree to which I’ve always had this anxiety, and always felt like this was very precarious.”

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