- A $600-a-week boost to unemployment benefits expired July 31.
- Thirty-three percent of unemployment insurance recipients, or about 6 million people, will have to dip into savings this month to cover basic living costs like rent and food, according to a Morning Consult survey. The true figure is likely much higher, one economist said.
- Democrats want to extend the $600 a week, but Republicans proposed reducing it to $200.
Losing a $600 boost to weekly unemployment benefits puts 6 million people at risk of not being able to pay their bills this month, a new survey found.
That financial hardship comes at a time when jobs are hard to find, lawmakers are at an impasse over continuing federal jobless aid and eviction moratoriums have expired in around 30 states. A federal moratorium ended in late July.
The $600 unemployment subsidy, created by a federal coronavirus relief law in March, came on top of the traditional benefits states pay.
Those state benefits averaged about $308 a week (roughly $1,232 a month) in June, according to most recent Labor Department data. They dipped as low as $183 a week ($732 a month), on average, in Louisiana.
But states also set minimum weekly amounts — a benefit floor, in other words — that can be as low as $5 a week.
For many, the federal subsidy — which amounted to an extra $2,400 a month — was a lifeline that helped them pay bills.
Left with just the state allotment, around 33% of unemployment recipients can't afford basic living expenses and will have to dip into savings in August to cover them, according to a survey published Wednesday by the Morning Consult, a market research firm.
That amounts to about 6 million people, according to John Leer, the company's chief economist.
That's roughly a third of the 18.1 million unemployment insurance recipients and 1.2 million additional people who applied for benefits last week, according to most recent Labor Department data.
The unemployment crisis has disproportionately affected lower-income Americans, who are less likely to have built up a savings stockpile to weather the current climate, Leer said.
And it would be hard to make ends meet simply by adjusting a budget — dining out less and buying less clothing, for example — since survey respondents indicated it was the cost of essentials like rent and food, not extraneous items, that was out of reach, Leer said.
"I'm not talking about luxuries and going on vacation," Leer said. "Your car payment is still your car payment.
"That's not adjustable," he added. "There's a real risk of rising delinquencies."
It's likely the survey's indication of financial hardship is understated, Leer said, since it only looks at those who are collecting unemployment insurance. Millions of Americans may be out of work but not collecting unemployment benefits.
And the survey didn't account for the more than 12 million workers collecting benefits through the Pandemic Unemployment Assistance program, which the federal government created in March to cover self-employed, gig and other workers previously ineligible for jobless aid. Around 830,000 additional people filed applications for PUA benefits last week, according to the Labor Department.
Lawmakers are currently negotiating another federal financial relief package, including whether to extend, replace or eliminate the $600-a-week unemployment boost. Democrats want to continue the payments through early next year or phase down aid as the unemployment rate falls. Republicans proposed lowering weekly aid to $200 a week, eventually transitioning to a system that replaces up to 70% of lost wages.
The Morning Consult survey polled a representative sample of 2,200 U.S. adults, weighted to match age, gender, educational attainment and region. It was conducted between July 23 and 25 and has a margin of error of 2 percentage points.