The failure of Congress to extend supplemental unemployment insurance benefits bills takes a severe financial toll on millions of furloughed or laid-off United States workers. Furthermore, it exacerbates wealth inequality. It is according to a new study.
Many out-of-work Americans could maintain their finance through August. This was because of the weekly six hundred dollars additional unemployment benefit checks they received via the CARES Act. Nevertheless, that act expired at the end of July. All that is according to a new paper by researchers from George Washington University, Harvard, and the University of Oxford.
Nonetheless, that financial stability crumbled in September and October because negotiations on new stimulus bills reached a stalemate.
The ending of the $600 weekly payments caused a fifty percent to a hundred percent increase in ‘financial fragility’. Financial fragility is a term the study authors use to define families in a financial crisis. That is what author Daniel Schneider said. Schneider a professor of public policy at the Harvard Kennedy School of Business.
Around ten percent of unemployed workers said that they could not pay their bills on time in August. Nevertheless, as Schneider said, that percentage doubled to twenty percent.
Schneider told CNN Business that August was the tail end for the financial support provided by the CARES Act. Moreover, he added that money was gone, and their fragility had risen significantly, by the time they came back to talk to individuals in September and October.
Ended Stimulus Bills
Thus, there is a lack of income for the unemployed. Therefore, it increases the divide between haves and have-nots that was already a main problem before the pandemic. Americans who have kept their jobs have seen their wealth steady or increase since July. Meanwhile, the wealth of the unemployed has declined.
Schneider said that what they saw there was a story of widening inequality.
Also, Food insecurity doubled in the current year because of the pandemic. Moreover, the problem becomes worse as the crisis rages on. The Second Harvest Food Bank in Orange County, California, in August served more than 4.4 million pounds of food. It is more than twice as much as the organization was performing before the pandemic. It is according to CEO Herald Herrman.
Nevertheless, until next year, federal lawmakers might not pass new stimulus bills. Senate Majority Leader Mitch McConnell, on Friday, recommended Congress to consider a new coronavirus stimulus bills at the start of 2021.
Schneider said that waiting that long might be too little and too late for millions of Americans.
- Trading Instrument