While weekly initial jobless claims have decelerated for 10 straight weeks — with 1.5 million Americans filing last week — still more than 44 million Americans have filed for unemployment insurance in the past three months alone amid the pandemic.
The CARES Act, which provided $2.2 trillion in coronavirus relief, included an additional $600-per-week of unemployment benefits on top of what the state typically provides. But those extra benefits are set to expire at the end of July and questions about extending them are mounting.
Those who remain unemployed will get only the state unemployment benefits if lawmakers don’t extend the benefits.
For many, the additional benefits mean higher incomes while jobless, with 2 in 3 Americans earning more with the additional $600 per week than when employed, according to a recent paper from Becker Friedman Institute at the University of Chicago.
But many experts warned that the expiration of the benefits along with the high unemployment rate will diminish the unexpected increase in personal income the U.S. experienced in April.
“A lot of these benefits are set to expire,” said Martha Gimbel, manager of economic research at Schmidt Futures. “It’s certainly likely that people's income plunges and that food insecurity and housing insecurity increases.”
Read more: How to file for unemployment insurance
Despite the highest unemployment rate since the Great Depression, personal income increased by more than 10% in April, according to the Bureau of Economic Analysis. While this was largely driven by the stimulus checks that many still-employed Americans got, a smaller factor was the expanded unemployment benefits that lower-earners who are now jobless received.
Here’s what else you need to know about the coronavirus unemployment benefits.
What do lawmakers say?
The HEROES Act which passed the Democrat-controlled House of Representatives in May is worth $3 trillion and one of its provisions extends the benefit through the end of 2020. But that legislation has been put on hold.
Lawmakers had discussed hammering out at least some parts of a stimulus deal in June, but following the better-than-expected May jobs report, the package may be delayed. Republicans are expected to begin negotiating a new package in July, which, if passed, will likely be just before the benefits expire.
“I reckon they’ll resume after the July 4 holiday weekend,” Larry Kudlow, director of the White House’s National Economic Council said of additional negotiations.
“The economic fallout from this pandemic may have bottomed out and begun to turn around weeks earlier than had been predicted,” McConnell said. “Instead of losing millions more jobs in the month of May, our nation had already begun adding back millions of jobs. Lockdowns are easing. Businesses are re-opening.”
Read more: What to do before you lose your job
Labor Secretary Eugene Scalia said he opposes the extension of the additional $600 based on the data from the May job report at a hearing before the Senate Finance Committee on Tuesday.
“That recognizes we’ll be in a very different place in July where the opportunity for people to return to work will be far greater,” Scalia said. “The best thing for workers is work, not unemployment.”
At the same time, Kevin Hassett, senior adviser to President Donald Trump, said that the chances for another stimulus package are high, but the size of it will depend on how unemployment looks like in the coming months.
“The odds of a Phase Four deal is something we talked with the president about last week,” Hassett said in an interview with the Wall Street Journal. “We even had a small group meeting this morning to talk about it. The odds of a Phase Four deal are very, very high.”
What do experts say?
While experts argued that the biggest flaw of the stimulus checks is that they weren’t targeted toward the people affected by the economic fallout of the pandemic, unemployment benefits are considered to be a better method of targeting benefits to people who have been negatively impacted by the pandemic.
“I think [stimulus payments] did help Americans who lost their jobs to serve as kind of a stopgap between when they lost their job and when they were able to receive the unemployment benefits,” Rachel Greszler, a fellow at Heritage Foundation. “Then there are a lot of other Americans who didn't lose their jobs and some of them may have even had a slight increase in income, so that's not the best use of taxpayer dollars to provide windfall benefits.”
With the additional $600 expiring at the end of July, some experts agreed that it’s better for those benefits to be extended, even at a reduced amount, rather than sending out more checks.
“I'm fine with lowering that, but we still should have some supplement to that — something like $200 of pandemic unemployment claims that runs through the end of the year,” Dean Baker, chief economist at the Center for Economic and Policy Research, told Yahoo Money. “That's a good thing. So keeping those in place, that will help the unemployed.”
Ben Gitis, senior policy analyst for the Bipartisan Policy Center, suggested scaling back the benefits gradually to incentivize people to return to work.
“When it's safe to go back to work, start scaling back the weekly benefit while extending the duration of those benefits that are available,” he said. “That way, folks who are unable to find work are still receiving financial support, but there's still an incentive there for folks to find work.”
How much are the unemployment benefits?
The individual unemployment benefits one gets are a combination of how much they got from their state along with the additional $600 the CARES Act provides. The median income replacement rate is 134%, the Becker Friedman Institute study finds.
For instance, eligible workers in New York can get between $104 and $504 a week, while in Nebraska, weekly benefits go up to $440. The $600 from the aid package is added to the calculated weekly benefit.
The CARES Act also provides access to pandemic unemployment assistance (PUA) to self-employed workers, independent contractors, and others who are usually ineligible for unemployment insurance (UI).
While the additional $600 may expire at the end of July, workers are eligible to up to 39 weeks of their state unemployment insurance benefits.
How do you register for the extra benefits?
The additional $600 of unemployment benefits are automatically added to the benefits you receive and there’s no need for an additional application but the unemployment insurance applications with your state’s department of labor
While those are traditionally ineligible for the unemployment insurance like self-employed, independent contractors, farmers, workers with limited work history and have lost their job in the pandemic should apply for PUA.