Ending the extra $600 federal benefit will harm 'vast majority' of unemployed workers, especially women and people of color
If Congress decides not to extend the extra $600 a week in federal unemployment benefits past its July 31 end date, the "vast majority" of unemployed workers will be "harmed" without it, according to the House Ways and Means Committee.
While workers of all genders, races, ages and income levels will see a reduction in benefits, women, people of color and younger workers will be hit especially hard if the benefit is not extended. Those groups have have lost jobs at a disproportionate rate in the coronavirus recession, according to an analysis from the nonpartisan Congressional Budget Office. Of the 19 million people who will receive regular unemployment benefits in July, 53% are women and 47% are people of color, CBO estimates. The analysis did not take into account self-employed and gig economy workers receiving unemployment.
Black people in particular have been disproportionately affected by coronavirus. Not only are they more likely to have lost their jobs than White workers, but they make up a startlingly high proportion of coronavirus deaths in the U.S. The death rate from Covid-19 for Black Americans is about 2.3 times as high as the rate for White and Asian people, according to APM Research Lab, which independently compiles coronavirus mortality data from 45 states and Washington D.C.
Women, too, have lost their jobs at a higher rate than men, as they make up a disproportionate share of workers in hard-hit sectors like education, health, hospitality and leisure. In April, the unemployment rate for women was almost 3 percentage points higher than for men: 16.2% compared with 13.5%, according to a report from the Institute for Women's Policy Research.
Will the UI benefit be extended?
Losing the enhanced benefit means millions of households are facing an "income cliff." In fact, their weekly payments will decrease by about two-thirds on average, according to an analysis by the House Ways and Means Committee. That said, most unemployed workers will still receive their normal benefit — which varies by state — at least through the end of 2020.
For many households, the enhanced benefits have been a financial lifeline over the past few months amidst record job loss and a coronavirus-induced recession. While some of the 47 million who have applied for unemployment benefits since mid-March have gone back to work, attempts to reopen state economies have faltered as coronavirus cases exploded in places like California, Florida and Texas. Governors of those states have resorted to re-closing down certain businesses, including bars and restaurants, that are seen as "super spreader" environments.
Critics of the extra payment say it encourages people not to return to work, and take issue with the fact that some people earn more with the bonus than they did at their old jobs. But some economists say that is precisely the point: The extra $600 in benefits — deemed the "best" part of the economic response by Josh Bivens and Heidi Shierholz, economists at the left-leaning Economic Policy Institute — keeps people home while allowing them to pay their bills and even save some money.
The July 31 end date was an arbitrary date Congress picked in March when the extent of the havoc coronavirus would wreak was not known, Michele Evermore, senior policy analyst at the left-leaning National Employment Law Project, previously told CNBC Make It.
The Heroes Act, passed by the House in May, extends the $600 per week federal benefit through January 2021. However, Senate Majority Leader Mitch McConnell (R-Ky.) said last week that the enhanced benefit will not be included in the next coronavirus relief package. The Senate has not said what else would be included.
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