End of the lifeline for extra unemployment benefits?
For many of the more than 32 million Americans receiving unemployment benefits, the additional funds aren't just an income replacement; they're an upgrade. National Bureau of Economic Research data shows two-thirds of those receiving an extra $600 in stimulus-related benefits make more on unemployment than they did at their former jobs, and one-fifth are paid double their previous wages. But this source of economic stability during an uncertain time could end even more abruptly than anticipated. While it may be widely known that additional unemployment benefits passed through April's stimulus package will officially end on July 31st, we could stop receiving these benefits even earlier.
So when will the benefits actually end?
Payments could actually end later this week, due to an administrative issue and tough timing. Since states typically pay out benefits on a Saturday or Sunday, and July 31st is a Friday, it's likely the previous weekend (the 25th or 26th) will be the last time many unemployed workers have a check with additional benefits sent their way. And waiting an extra day isn't an option: these departments rely on computer systems that will automatically stop sending more checks after payments are issued the weekend of the 25th.
Could additional benefits still be extended?
It's a definite possibility, and there's plenty of data to support an extension's necessity. For 17 straight weeks, at least 1 million Americans have filed for unemployment, and while claims have decreased greatly from April's 6 million per week high, many economists still warn cutting off benefits entirely could deal a serious blow to U.S. economic recovery. Few may feel this harder than the more than 15 million currently unemployed Americans who receive the full $600 benefit. The looming financial threat is serious enough that the White House recently expressed a willingness to compromise over unemployment benefits before July's deadline is reached.
What could this compromise look like?
The White House has indicated it would be open to approving a "narrow extension" of current unemployment benefits. Earlier this month Treasury Secretary Steve Mnuchin said that the next round of benefits, should they occur, would be "no more than 100%" of the unemployed worker's previous income, which would mean less money for the majority of those currently receiving the maximum available benefit. While vague, this move towards compromise is a notable and hopeful change after weeks of insistence from the Trump Administration that extending benefits would provide a disincentive for the unemployed to seek new work.