LONDON (The Guardian) - For millions of unemployed Americans dealing with the worst economic crisis since the Great Depression a $600 payment each week from the government has been a vital lifeline, allowing them to keep their homes and put food on the table despite losing their jobs.
But now many of those hit hard by the economic disaster caused by the coronavirus pandemic are bracing for a steep drop in income this week as Republican Party infighting delays a replacement for an expansion to weekly unemployment benefits, meaning many could have that vital lifeline cut or taken away.
The Senate majority leader, Mitch McConnell, said that the Democrats’ proposal to continue the program, which expired on Friday, through the end of the year was "completely unhinged”, while members of his own party criticized its proposed replacement.
Hanging in the balance of these 11th-hour negotiations are the financial livelihoods of 30 million unemployed Americans and their families, many of whom have struggled to get timely, accurate payments because of the country’s archaic unemployment infrastructure.
Jamie, a 68-year-old pilates instructor in Florida, immediately filed for unemployment when she lost her job in the first week of March. For six weeks, the unemployment office didn’t acknowledge her application so she sought the help of Coast to Coast Legal Aid of South Florida, an advocacy group.
"I hadn’t had any benefits for three months,” she said. "So, I was with zero, zero, zero, zero, zero until Legal Aid stepped in to help.”
Jamie, who did not want her last name to be used, moved out of her apartment because she couldn’t pay rent, and has been living with a relative.
In late May, she received the benefits she was entitled to, but on Wednesday her check was inexplicably less than it should have been.
Debates about whether to renew the $600 expansion have been muddled by Republicans, and also by anecdotal news stories which claim, without data, that the money is "disincentivizing” people from going back to work. An estimated 40% to 68% of workers make more from the expansion, which is paid on top of state benefits, than they did in their jobs, but economists have found this has not deterred people from seeking work.
Those benefiting the most from the expansion are low-wage workers – the expanded benefit is equivalent to $15 an hour – and the people of color and women overrepresented in sectors with the highest unemployment rates. The Congressional Budget Office said of the 19 million workers receiving unemployment insurance in July, 47% are people of color and 53% are women.
No one has said the $600 boost is the perfect solution, but experts say a replacement must be manageable for overwhelmed state unemployment offices.
On Monday, Republicans proposed scaling back the payments to $200 a week until October. Then, states would be expected to implement a system which gives individuals 70% wage replacement, capped at $500, until the end of the year.
It could take state agencies eight to 20 weeks to implement the wage replacement scheme, according to a memo from the National Association of State Workforce Agencies, obtained by Bloomberg.