The $600 weekly unemployment benefit likely ends next week—here's how some are bracing for the drop in aid

A host of emergency coronavirus relief measures that have extended a lifeline to tens of millions of Americans during the pandemic are set to expire at the end of July.

One of the most visible and contentious policies caught in partisan cross hairs is the extension of the $600 weekly unemployment benefit, which was signed into law through the federal CARES Act. It expires July 31 but effectively ends next week on July 25 or 26, depending on how each state's weekly calendar is set up. The House passed the HEROES Act in May that would extend the benefit until January 2021, but it is unlikely to pass in the Senate when it reconvenes July 20.

Traditionally, state-administered unemployment benefits aim to recover about half of a worker's wages. In April 2020, state-provided unemployment averaged $333 per week nationwide but ranged from a low of $101 in Oklahoma to $531 in Massachusetts. With the $600 weekly boost from the federal budget, two-thirds of workers earn more on unemployment than they did from previous wages.

Critics of the provision say the extra unemployment pay discourages people from going back to work. Others say it's a necessary amount to help people afford food, shelter and basic necessities during an unprecedented global health pandemic that has left 33 million Americans receiving unemployment benefits as of late June.

For one 24-year-old Charlotte, North Carolina, resident who goes by the nickname Spike, the extra $600 a week from unemployment "made me feel like I mattered" compared to the $800 he earned per month from his previous job as a location manager at a small business. He tells CNBC Make It that without the $600 boost, he'll receive $117 per week from the state of North Carolina, far below the state's $265 average benefit and $350 cap.

With the additional unemployment pay and a one-time $1,200 stimulus check, Spike maxed out his health savings account, "which has eased much of my anxiety about affording my regular health-care appointments." To prepare for his upcoming drop in income, Spike stocked up on necessities like dog and cat food, paper goods and cleaning supplies. His credit card issuer allowed him to convert mileage points to buy things from Amazon, which helps him stretch his budget. He's also shopped at local thrift stores in order to furnish a home office so he can continue to do online job training and prepare to take the Medical College Admission Test, or MCAT.

Beyond taking care of his everyday needs, Spike's priority is to buy a used car so he can look for more jobs in surrounding towns. With his new, temporary earning power, "I'm grateful to, for once in my life, be financially stable and able to contribute more to the economy than in years prior," he says.

Indeed, economists including Harvard professor Raj Chetty have said the continuation of enhanced unemployment benefits is one of a few policies that would have the most significant impact for Americans and the U.S. economy. Low-income Americans are more likely to use their federal stimulus dollars for basic goods, while high-income households are more likely to save the money rather than funnel it back into the economy.

Furthermore, "it's not that lots of folks who have jobs to go back to are choosing not to go, but there's no work to do," Chetty says. "We should be focusing on unemployment insurance and expanding safety net programs like SNAP fundamentally because those programs provide social insurance — they mitigate economic hardship in a time of crisis."

Even for those still employed during the pandemic, the additional $600 a week has been crucial, especially to people working at severely reduced hours, like Tanjila, a 30-year-old retail store manager who works in New York City.

Tanjila was temporarily laid off from her job when the pandemic shut down the city and received $182 per week from New York State. Now, though many of her colleagues remain out of work, she's back to working 10 hours over two days per week, and she continues to collect a partial unemployment benefit of $130 per week.

"With my hours being cut so much, even with the unemployment, combined I am making far less then I did when I was working full-time," she says. "Without the $600, I really don't know what I will do. I've tried looking for other jobs, but pretty much every business out there is struggling the same and not really hiring."

Tanjila's reduced income has required her to cut down her spending, including on housing. She made her last rent payment in April for her share of a $3,200 four-bedroom apartment, and she's worried what will happen once moratoriums on evictions end in the state come August.

"Our building went on strike in hopes that evictions would be taken more seriously," she says. Nearly one-third of households nationwide didn't make their housing payments in July.

When the extra $600 a week in unemployment was approved in March, economists praised the size of the increase and its potential to stabilize the economy. Compared to a 2009 stimulus package following the Great Recession that boosted benefits by just $25 per week, "$600 is in different league," says Urban Institute economist Wayne Vroman. "It could go a long distance in stabilizing American household income and help to maintain purchasing power for the consumer sector of economy."

"I think most people think that when the $600 gets cut off that if they're not unemployed, it's not going to affect them," adds Michele Evermore, senior policy analyst with the National Employment Law Project. "But when 30 million people are no longer getting $600 extra dollars, that's going to have a multiplier effect on the whole economy."

Additional measures in the CARES Act extended unemployment benefits to people who previously didn't qualify for aid, including self-employed, freelance and gig workers like Mark Rust of Gardiner, New York. In mid-March, the 64-year-old musician saw his income disappear as his engagements to provide musical programming for colleges, grade schools, libraries, fairs and festivals were canceled one by one.

With the federal CARES Act, he has been receiving a total of $905 a week in unemployment, though his earnings will drop by nearly two-thirds once the extra $600 a week ends in August.

"The additional $600 per week has been crucial to our family's finances as my wife's income was reduced by about 50% and we have two kids in college this fall," Rust says.

Though he applied for benefits early in the pandemic, he didn't receive payment from the beleaguered New York State office until June, when it finally came in a lump sum of back payments.

"In a way," he says, "I'm glad I'm only getting it all now, because initially I didn't count on any help, so we tightened our belts here significantly." In recent months, his family cut spending on things like transportation and entertainment. He's hopeful that campus reopenings may bring the return of outdoor concerts, "but frankly I'm also preparing for the entire fall to simply be a bust." If things don't get better by the time self-employed benefits end in December 2020, he's prepared to dip into savings and retirement accounts to make ends meet.

Not everyone who qualifies for unemployment has successfully applied for and received assistance. According to data compiled by Andrew Stettner, a senior fellow at The Century Foundation, just 57% of claims — 18.8 million out of 33 million — had been paid nationwide by the end of May.

Jessica Conroy, 54, is a self-employed photographer in San Francisco and applied for Pandemic Unemployment Assistance in April. Three months later, she has yet to see any assistance come from the California Employment Development Department. She and her husband, also a freelance worker, received award letters in June stating their eligibility, but payment hasn't yet followed. The state's minimum payment for self-employed workers receiving unemployment is $167 per week.

The coronavirus has posed an elevated threat to Conroy since February, who has a history of breast cancer.

With no income and doctor's orders to limit outside contact, Conroy and her husband make ends meet through food stamps, getting groceries from a community food bank, covering taxes and insurance costs on a maxed-out credit card and with loans from family members.

The Conroys plan to use future unemployment assistance to pay for their $2,700 monthly rent.

"Because we are both high-risk, we are developing a revenue stream that would not require us to be in contact with others," Conroy says. Expecting government assistance "most certainly hasn't made us lazy. It has given us enough of a break from worry for us to work on figuring out a new business model. But we aren't there yet — close but not there.

"If the enhanced unemployment ends, we will probably have to leave the country," says Conroy, whose husband is from the U.K. and still has family there. The majority of her own family has left the states to relocate to Europe over the years. "I am the last in my family to have stayed in America."

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