The COVID-19 pandemic has caused millions of American workers to become unemployed or unemployed, but thanks to the additional unemployment income provided by the CARES Act, many have been able to make ends meet.
Unfortunately, the $ 600 weekly unemployment supplement that has been in place for nearly four months will expire later this month, so this could be the last full week of enhanced benefits unless Congress acts quickly. Most states offer standard unemployment benefits that peak at $ 300- $ 400 per week, so this would mean a higher salary reduction for millions of people.
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Will the $ 600 unemployment increase continue?
The good news is that politicians on both sides of the aisle largely agree that something It must be done to help the 11% of American workers who are currently unemployed. But there is great disagreement when it comes to what.
Democrats want to continue the weekly $ 600 boost as it currently is. The HEROES Act stimulus bill, passed by the House of Representatives, would continue with the $ 600 supplement until the end of January 2021.
On the other hand, Republicans are generally not in favor of keeping unemployment rising in its current form. The simple explanation is that many people are currently doing plus money while they were unemployed than they were when they were still working, and the idea is that this could be a disincentive to going back to work.
Whatever the bottom line, the best thing for the US economy is to make sure that unemployed workers can continue to cover their living expenses and other bills without having to rack up credit card debt or take advantage of retirement savings.
These are (some of) the possibilities
With that in mind, there are several possible outcomes of the current round of economic stimulus negotiations when it comes to unemployment benefits.
- Keep the weekly $ 600 boost as it is. As you may have inferred from reading the last section, this is not particularly likely, especially in early 2021, as required by the HEROES Act.
- Maintain the $ 600 weekly boost, but with restrictions. As mentioned, one of the biggest problems Republican lawmakers have with rising CARES unemployment is that many people earn more than they were doing while working. So the next stimulus bill could provide $ 600 maximum momentum, with total unemployment benefits limited to 100% of pre-unemployment earnings.
- Adopt a lower unemployment boost. Some have suggested keeping the unemployment supplement in place across the board, just for a smaller amount. Several lawmakers have mentioned a weekly increase of $ 300 instead of $ 600 as a possibility, but an amount between the two is also possible. Treasury Secretary Steven Mnuchin recently said the Republican Party plan includes an increase in unemployment based on a 70% wage replacement.
- Maintain some kind of momentum, but award bonuses back to work. Republicans in the House and Senate have mentioned return-to-work bonuses as a way to incentivize people to join the workforce. A proposal from Rep. Kevin Brady (R-Texas) suggests a $ 1,200 bonus for workers starting a new job. This could be used as a separate provision, but would probably accompany some form of increased unemployment benefits.
- Gradually reduce the weekly boost to $ 600. Senators Chuck Schumer (DN.Y.) and Ron Wyden (D-Ore.) Recently proposed to keep the unemployment increase at $ 600 for as long as the three-month average in a state’s unemployment rate exceeds 11% and reduce it by $ 100 for each percentage point of decline below that, which means it would disappear entirely once unemployment fell below 6%. It is unclear whether such a proposal would gain significant bipartisan traction.
Time is an important factor.
Almost as important as than It will be done to help unemployed workers if done in a timely manner. As it stands now, although the $ 600 unemployment increase technically expires on July 31, unemployment benefits are generally awarded according to the calendar week, so this is the last full week to apply.
