Last week was the 27th week in which some 870,000 people applied for general state unemployment assistance for the first time. These are extremely large numbers as a result of the economic meltdown caused by the pandemic.
For many families this was a week that represents a bitter deadline because in most states, general unemployment insurance, the IU, lasts 26 weeks in most states.
That means that many families who have repeatedly applied for UI since the pandemic began wreaking havoc on jobs in all sectors have had their insurance lapse
Earlier, at the end of July, they reached the first difficult moment when they ran out of the $600 a week that was being specially covered by this aid. When the Republican-controlled Senate let these benefits created by the CARES Act expire without any alternative, the benefits were reduced to approximately 40% of the usual income after the loss of employment.
The passage to week 27 has not been the end of public support but the arrival of a deadline that shows how narrow the dark tunnel of unemployment that this pandemic is becoming and how necessary it is to see the light at the end of it for those who pass through it.
After these weeks, the unemployed can move on to collect Pandemic Emergency Unemployment Compensation (PEUC), which guarantees 13 more weeks of unemployment assistance to those who were collecting UI. It will be approximately two weeks before official statistics begin to reflect who is collecting this benefit.
When these benefits end, the Extended Benefit (EB) will come in and provide assistance for another 20 weeks if unemployment remains high, as it is not difficult to predict.
There is another group of people who are currently unemployed. These are independent contractors, freelancers or gig workers who are not normally entitled to the UI. They now have so-called Pandemic Unemployment Assistance or PUA. Last week about 630,000 initially applied for it.
For workers who apply for PUA, unemployment lasts 39 weeks so those still covered since the beginning of the pandemic are still protected. However, this assistance expires at the end of this year.
Last week, news came in that the Democrats will again try to resume negotiations to push through a new aid package to keep the economy going. The Republican Party reacted with refusals to the first proposal, arguing that the $600 a week given to the unemployed discourages a return to work.
This argument, as stated by most economists, is an anecdote and a reflection of the fact that there are very low wages with very high risks because for many people going back to work means getting close to an illness for which they have no health insurance or sick leave, which would send them back to unemployment.
Heidi Shierholz, an economist at the Economic Policy Institute, recalled that when this unemployment bonus was in place, between May and June, 9.2 million people returned to work and a very high proportion of these, service workers, earned less on the job than with this bonus. In other words, that money did not make them hesitate to return to work.
Many people don’t go back to work because there are more millions of unemployed than there are job offers, recalls Shierholz.
At the moment, the only extra some workers receive is the $300 or $400 (depending on states) approved by executive order by President Donald Trump. These resources are taken from FEMA and only last a few weeks.
Shierholz regrets that there has not been a continuation of the $600 and points out that it is something that is especially detrimental to households where there is unemployment and they barely have savings or assets with which to help themselves, that is, a good part of black or Latino families.