This is the last week of $600 unemployment benefits

The end is near for the $600 federal lifeline for millions of unemployed Americans -- even though the...

Posted: Jul 19, 2020 9:49 AM
Updated: Jul 19, 2020 1:15 PM

The end is near for the $600 federal lifeline for millions of unemployed Americans -- even though the economy is still far from recovered from the coronavirus pandemic and new layoffs are being announced regularly.

The coronavirus relief program technically doesn't expire until July 31, but this coming week will be the last for which benefits are paid -- because payments are only provided for weeks ending on either Saturday or Sunday.

Jobless Americans will still get state unemployment benefits, but the sunset of the Congress' $600 enhancement -- part of the $2 trillion economic aid package passed in March -- will leave more than 25 million people thousands of dollars poorer each month. And it will expose more of the real pain of mass unemployment, just as many states are reimposing shutdowns.

'These emergency unemployment benefits have been propping up families and propping up the economy now for several months, said Kali Grant, senior policy analyst at the Georgetown Center on Poverty & Inequality. 'Ending the benefits prematurely will really set back any economic recovery that may have been on the way.'

Congressional lawmakers are beginning to work this week on the next economic stimulus package. But it's unlikely they'll agree on -- much less approve -- the next step to help unemployed Americans before the payments lapse.

The provision was controversial from the start, mainly because the $600 boost, when added to state benefits, is more than what two-thirds of workers made on the job, according to an estimate from University of Chicago researchers.

But lawmakers approved it in late March as part of a historic expansion of the nation's unemployment program at a time when health officials didn't want people out looking for work. The flat $600 payment was much easier for state agencies -- which were already struggling as a flood of claims overwhelmed their antiquated technology -- to implement.

Congress approved the boost for only four months, thinking that the economy would bounce back quickly once the coronavirus was vanquished and businesses reopened. For a while, that seemed to be the case -- with employers hiring more than 7 million workers in May and June after shedding an unprecedented 20.5 million jobs in April.

Senate Republicans, who are expected to release their proposal this week, are generally loath to extend the full benefit. They feel it creates a disincentive for people to return to work, a concern echoed by some business owners. Instead, GOP lawmakers are considering scaling back the enhancement by several hundred dollars and creating a bonus for those who go back to work.

Democrats, on the other hand, want to continue the bigger benefit into 2021. The House included that provision in the $3 trillion coronavirus relief bill it passed in May.

'The right thing to do for families and the economy is extend supercharged unemployment benefits,' said Oregon Sen. Ron Wyden, a Democrat. 'They have unquestionably kept the economy afloat.'

Blunting the impact

The augmented benefit has blunted the impact of the coronavirus-induced economic upheaval, which prompted the sharpest and swiftest loss of jobs on record in April. Still, 4.3 million homeowners missed their mortgage payments in May, the highest level since 2011, according to Black Knight, a mortgage data company.

And, the vast majority of food banks were still seeing a big jump in demand in early July, compared to a year ago, with 50% more people being served, on average, according to Feeding America, a network of food banks. Just under 30% were new clients.

The $600 payment provides more than $15 billion a week to 25 million Americans, according to an analysis by Andrew Stettner, senior fellow at The Century Foundation. Many are using it to cover their rent or mortgage, buy food and spend on other basic needs.

Shanga McNair of Jacksonville, Florida, is one of them. The veteran bartender lost her job at a brewhouse when the state shut down earlier this spring and then returned to work in early June at a jazz bar for about two shifts a week -- down from her typical six. However, state officials closed the bars again in late June after coronavirus cases spiked, sending her back to unemployment. Her side jobs bartending at private parties and banquets have also dried up.

The $600 federal boost, on top of her $275 weekly state benefit, is less than she made while working. It barely pays her rent but has allowed her to keep up with her bills. The 40-year-old, who also visits a local food pantry occasionally to supplement her grocery shopping, figures that if Congress doesn't extend the enhancement, she has three months to find a job before she's evicted.

So far, she's had no luck. McNair has sent scores of applications to restaurants, warehouses, customer service firms and offices, but they have yielded nothing. She even filled out an application while grabbing a bite at Popeye's after seeing the manager working multiple jobs but was told there was a hiring freeze.

'I hate depending on the government, but everything is out of my control,' said McNair, who is putting two daughters through college and has never collected unemployment before. She has written to her elected representatives in both parties. 'You can't just pull the rug because it's not over.'

Eliminating the federal benefit will reduce workers' weekly unemployment payments by 50% to 85%, depending on their state, Stettner said.

As Congress debates what to do, more people are at risk of losing their jobs in fresh rounds of layoffs. United and American airlines have warned this month that tens of thousands of employees could be cut or furloughed this fall. JCPenney announced last week that it would cut 1,000 jobs from its executive and regional offices. Other retailers, including Brooks Brothers and Neiman Marcus, have filed for bankruptcy.

Also, the spike in coronavirus cases has prompted at least two dozen states to halt or reverse their reopening plans, which will also cost people their jobs. For instance, California last week ordered the shuttering of bars, movie theaters and indoor dining at restaurants statewide, as well as the closing of gyms, houses of worship, indoor malls, hair salons and some offices in many counties.

The impact is already showing up in the data. The states with the largest surge in coronavirus cases earlier this month also had the biggest increase in initial unemployment claims, according to William Rodgers III, chief economist at the Heldrich Center for Workforce Development at Rutgers University.

Some economists fear that the nascent jobs recovery will be derailed, sending even more people onto the unemployment rolls.

'Conditions in the labor market remain weak and the risk of mounting permanent job losses is high, especially if activity continues to be disrupted by repeated virus-related shutdowns,' said Rubeela Farooqi, chief US economist at High Frequency Economics.

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(Widget updates once daily at 7 p.m. CT)

Cases: 1680908

Reported Deaths: 28023
CountyCasesDeaths
Cook63626111214
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Will915681128
Lake802871090
Kane68604874
Winnebago41222561
Madison40178598
St. Clair36326599
McHenry34856331
Champaign27087197
Peoria26991368
Sangamon25818287
McLean23073220
Tazewell20689331
Rock Island18919362
Kankakee17959249
Kendall16268114
Macon15344252
LaSalle15078287
Vermilion14453201
Adams13188152
DeKalb12201134
Williamson12091175
Whiteside8328183
Jackson810494
Boone796583
Coles7918125
Ogle759290
Grundy741386
Franklin7339115
Knox7321169
Clinton7136102
Macoupin6988106
Marion6935144
Henry666177
Effingham6639100
Jefferson6573143
Livingston599498
Stephenson587893
Woodford578492
Randolph5563100
Christian536682
Fulton527977
Monroe5258103
Morgan5088100
Logan495675
Montgomery492882
Lee479760
Bureau444291
Saline436169
Perry433975
Fayette432464
Iroquois422577
McDonough374861
Shelby349848
Jersey336953
Lawrence335533
Crawford333730
Douglas328437
Union307748
Wayne304863
White280833
Richland280157
Hancock274435
Clark266940
Cass266531
Pike265658
Edgar260649
Clay259854
Bond257525
Ford246059
Warren244866
Carroll237138
Moultrie236333
Johnson229732
Wabash217319
Jo Daviess216629
Massac216551
Mason214452
Washington212928
De Witt206530
Greene205640
Mercer205036
Piatt202814
Cumberland190126
Menard172513
Jasper161621
Marshall141721
Hamilton134222
Schuyler108810
Brown106610
Pulaski104612
Edwards104118
Stark81828
Gallatin7939
Alexander73212
Scott7126
Henderson70914
Calhoun6932
Hardin60916
Putnam5674
Pope5566
Unassigned1342433
Out of IL140

Indiana Coronavirus Cases

(Widget updates once daily at 8 p.m. ET)

Cases: 1007681

Reported Deaths: 16470
CountyCasesDeaths
Marion1355212121
Lake664101166
Allen57993801
Hamilton46350465
St. Joseph44397615
Elkhart35949510
Vanderburgh32251480
Tippecanoe27933260
Johnson25107445
Hendricks23897359
Porter22929365
Madison18748409
Clark18557252
Vigo17479303
Monroe15263200
LaPorte15173250
Delaware15073263
Howard14748290
Kosciusko12348148
Hancock11728176
Bartholomew11639180
Warrick11292189
Floyd11108215
Wayne10986253
Grant10082220
Morgan9472176
Boone8926115
Dubois8271131
Henry8229152
Dearborn822393
Noble8031106
Marshall7939135
Cass7546121
Lawrence7457171
Shelby7189119
Jackson698289
Gibson6597115
Harrison649192
Knox6421106
Huntington6395100
DeKalb632399
Montgomery6264111
Miami593398
Putnam581278
Clinton576171
Whitley565755
Steuben562576
Wabash5332104
Jasper532079
Jefferson511297
Ripley500586
Adams482576
Daviess4677114
Scott438974
Greene425196
Wells424888
Clay423360
White418764
Decatur4169102
Fayette406587
Jennings387361
Posey376644
Washington359151
LaGrange359078
Randolph3452100
Spencer340243
Fountain335760
Sullivan329452
Starke317171
Owen314771
Fulton312667
Orange293664
Jay284645
Franklin265643
Perry265452
Rush262432
Carroll261934
Vermillion258654
Parke231426
Pike229243
Tipton228159
Blackford193142
Pulaski183757
Crawford159823
Newton158348
Benton150617
Brown146747
Martin138719
Switzerland135011
Warren121116
Union107016
Ohio84613
Unassigned0540