Around 33 million workers are now claiming unemployment benefits. Nevertheless, they may be in for an unwelcome surprise next month. The extra $600 in weekly unemployment benefits will expire on July 31. However, in some states, it ends a week earlier.
The reason for that is a technicality: the schedule for paying out unemployment benefits. The CARES (Coronavirus Aid, Relief, and Economic Security) act set Friday, July 31, as the final day to pay the additional $600 in weekly pandemic-relief benefits. Nevertheless, some states pay out their unemployment benefits on weeks that end on Saturdays or Sundays.
If this is the case in the state you live in, the last week to receive the extra benefit will be the week ending on Saturday, July 25, or Sunday, July 26. This is according to the United States Department of Labor.
Among the states where unemployment benefits will end earlier than July 31 are New York and California. Their labor departments end their payment cycles on July 26 and July 25, respectively. With more than 1.8 million in New York and 3 million in California, they also have more workers claiming unemployment than any other state. That is according to an analysis from the left-leaning Economic Policy Institute.
Unemployment benefits will return to their pre-pandemic levels after that date. It varies according to state. Nevertheless, they are considerably less generous. For example, depending on their income while working, laid-off New Yorkers will receive up to $504 per week, and the regular unemployment benefits in California are $167 per week.
The EPI said, in its analysis, that nationally, more than 1 in 5 workers have recently applied for or are receiving unemployment benefits.
Amidst the recession sparked by the coronavirus pandemic, the extra $600 per week in additional benefits will help keep many households afloat. It is unclear whether that will occur past the July 31 cutoff, while there have been calls to extend the benefit.
The House passed the Heroes Act last month. This act would extend the benefit until early 2021. Nevertheless, some Republican lawmakers have signaled their opposition based on the belief that receiving extra unemployment pay is a disincentive to returning to work in many states where wages are lower.
Julia Wolfe is an EPI state economy analyst. She wrote last week in a blog post that those benefits are a critical lifeline. They help workers to make ends meet while practicing the necessary social distancing to stop the spread of COVID-19. Factually, the $600 increase in weekly UI benefits was likely the most effective measure in the CARES act. It was intended to insulate workers from economic harm and jump-starting an eventual economic rebound. She thinks that it must extend past July.
Losing the extra $600 earlier than forecasted can prove not only a financial shock to those households. It may also prove damaging to local economies as well. Without assistance, more Americans will struggle to pay their rent or bills. Moreover, this will lead to defaults on loans and evictions.
Let us see what will happen after July. It is a fact that there is a difficult situation in the United States.
- Trading Instrument