Home / Business / The $ 600 increase in unemployment leaves $ 6 million without enough cash

The $ 600 increase in unemployment leaves $ 6 million without enough cash



Carlos Ponce joins other protesters participating in a protest asking senators to support the continuation of unemployment benefits on July 16, 2020 in Miami Springs, Florida.

Joe Raedle | Getty Images

Losing a $ 600 boost to weekly unemployment benefits puts 6 million people at risk of not paying their bills this month, a new survey found.

The economic hardship comes at a time when jobs are hard to find, legislators are in an impasse over ongoing federal unemployment benefits and expelling moratoriums have expired in about 30 states. A federal moratorium ended in late July.

The $ 600 unemployment subsidy, created by a federal law on coronavirus in March, came on top of the traditional benefits that states pay.

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These government benefits averaged about $ 308 a week (about $ 1

,232 a month) in June, according to the latest Labor Department data. They dipped as low as $ 183 a week ($ 732 a month) on average in Louisiana.

But states also set the minimum weekly amount – a benefit floor, in other words – which can be as low as $ 5 per week.

For many, the federal subsidy – which amounted to $ 2,400 per month – was a lifeline that helped them pay bills.

6 million people

If there are only government grants, about 33% of unemployment benefits can not afford basic living costs and will have to dive into savings in August to cover them, according to a survey published Wednesday by Morning Consult, a market research firm.

That amounts to about 6 million people, according to John Leer, the company’s chief economist.

That’s about a third of the 18.1 million unemployment insurance recipients and another 1.2 million people who applied for benefits last week, according to the latest Labor Department data.

The unemployment crisis has disproportionately affected lower-income Americans, who are less likely to have built up a savings warehouse to weather the current climate, Leer said.

“Rising crime”

And it would be difficult to end up meeting simply by adjusting a budget – eating less and buying less clothes, for example – because respondents to the survey indicated that it was the cost of necessities such as rent and food, not foreign objects, that was out of reach, said Leer.

“I’m not talking about luxury and going on vacation,” Leer said. “Your car payment is still your car payment.

“It’s not adjustable,” he added. “There is a real risk of rising crime.”

It is likely that the survey’s indication of financial difficulty is underestimated, Leer said, as it only looks at those who collect unemployment insurance. Millions of Americans may be out of work but not collecting unemployment benefits.

And the survey did not account for the more than 12 million workers who collected benefits through the Pandemic Unemployment Program, created by the federal government in March to cover the self-employed, gigs and other workers who were not previously eligible for unemployment. About 830,000 additional people submitted applications for PUA benefits last week, according to the employment department.

Legislators are currently negotiating a new federal financial relief package, including whether to extend, replace or eliminate $ 600 per week unemployment increase. Democrats want to continue payments through the beginning of next year or phase out support when unemployment falls. The Republicans proposed lowering the weekly allowance to $ 200 per week and eventually switching to a system that replaces up to 70% of lost wages.

The Morning Consult survey examined a representative sample of 2,200 American adults, weighted to match age, gender, level of education, and region. It was implemented between 23 and 25 July and has a margin of error of 2 percentage points.


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