The federal $600 unemployment benefit ends July 31. What's next?
Dismissed restaurant employees were hired as temporary workers at the Second Harvest Food Bank in Orange County. Unemployment remains high across the country.
For many unemployed Americans, additional weekly unemployment insurance of $ 600 a week provides stability in an otherwise shaky economic period. But how long could that be useful?
When the corona virus pandemic broke out for the first time in mid-March and caused a knock-on effect from immediate cancellation of events and business closures, spending almost disappeared overnight. In a rapid move to flush money through the economy, the federal government approved the $ 2 trillion coronavirus law on aid, help and economic security.
Among other things, the CARES Act has increased regular state unemployment insurance - which can vary from $ 213 a week in Alabama to $ 555 in Massachusetts (the national average is $ 378) - by an additional $ 600 a week.
The benefit is expected to expire on July 31. However, since a pandemic is still in full swing, lawmakers are debating what could come next. These are some of the different suggestions on the table.
At the beginning of May, a group of democratic legislators proposed extending the weekly benefit of $ 600 after July 31, and then stopping it once the economy has stabilized.
The law on employee assistance and security introduced by Rep. Don Beyer (D-Va.) And Sens. Jack Reed (DR.I.) and Michael Bennet (D-Colo.) Would extend the $ 600 weekly benefit 30 days after the Declaration of emergency by the President. Then they propose to phase out funding, with changes triggered by each country's unemployment rate. Countries with the highest unemployment rate would initially receive a weekly increase of $ 450, which would then drop to $ 300. Countries with lower unemployment rates would start with weekly compensation of $ 350, which would drop to $ 200.
Eligibility would also be extended by several weeks. Cutting off the additional benefits in late July would be "a human and economic disaster," Beyer wrote in a statement.
"If you are [unemployed] in a state with a [lower] unemployment rate, it is frustrating because your benefit amount is decreasing. But you win the lottery because you are more likely to get a job back," said Alix Gould-Werth, director of economic security policy at the Washington Center for Equitable Growth.
Another proposal came a month ago when the House Democrats published, among other things, the $ 3 trillion HEROES law, which is designed to extend unemployment benefits to January, among other things. But Republicans who have a majority in the Senate quickly shot down the legislation as a progressive "wish list."
Last month, many Republicans, including President Trump, resisted the idea of extending the benefits after July. With millions of unemployed Americans, many Republican lawmakers have now recognized the need for continued support.
“With such a high unemployment rate and a recession that will continue well into the next year, it is vital to maintain generous unemployment insurance because it helps workers, helps businesses, because workers spend money in businesses , and helps the communities. Said Peter Ganong, assistant professor at the Harris School of Public Policy at the University of Chicago.
The Hill reported that several Republicans are joining forces to resolve Sen. Rob Portman's (R-Ohio) solution: a $ 450 weekly return bonus. A person returning to work receives $ 450 per week in addition to regular wages for six weeks. According to Portman, the weekly bonus of $ 450 in addition to the federal minimum wage would make returning to work more attractive than continuing unemployment insurance. The federal government would save by cutting its spending by $ 150 a week from $ 600 a week, the state would save unemployment, and the worker would benefit from the incentive, Portman said.
"That means you would earn a little more in the workforce than in unemployment," said Portman in the Senate. "In addition, this return-to-work bonus would give extra money to people who lost their jobs due to the health crisis, which should give additional impetus to the economy, which has seen a historic decline in consumer spending."
Some legislators are concerned that unemployed people make more money than they did in their pre-pandemic jobs, which prevents employers from getting their workers back. A report by the Congressional Budget Office showed that about five in six recipients would receive more money from weekly benefits than if they worked during those months if the weekly benefit lasted from $ 600 by January. Employment would also be lower next year, it said.
With a record unemployment rate, according to Gould-Werth, the problem is not to move people from unemployment to return to work.
"People will actually start working with the $ 600 benefit again," she said. "It's pretty easy - we just don't have enough jobs that workers can return to."
The Paycheck Security Act proposed by Sens. Bernie Sanders (D-Vt.), Mark Warner (D-Va.), Doug Jones (D-Ala.) And Richard Blumenthal (D-Conn.) Would attempt to address this problem Financing small businesses to reinstate workers on leave or laid off and to cover their health benefits. The proposal, supported by Senator Dianne Feinstein (D-Calif.), Would grant eligible small businesses a refundable tax credit of up to $ 90,000 per employee per year, according to a press release.
Negotiations on the future of unemployment benefits are likely to intensify in the coming weeks. You will find your representative and senator in the congress to provide feedback here.
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