A motive for third stimulus checks: Unemployment advantages attain few

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Unemployment benefits do not reach most unemployed Americans – suggesting that lawmakers targeting assistance to the unemployed are likely to need to use stimulus checks or other relief measures.

According to an analysis published on Monday by Eliza Forsythe, an employment economist at the University of Illinois, no more than 30% of the unemployed are currently reached by the unemployment system.

In other words, nearly three in four unemployed Americans receive no help. According to Forsythe estimates, this corresponds to about 8 million people.

The finding comes as Washington weighs the contours of a third stimulus package. House and Senate Democrats voted Tuesday to press ahead with a budget measure that would allow them to spend $ 1.9 trillion in additional aid – including additional stimulus checks – without Republican votes.

Many Republicans have questioned the need for another round of pandemic aid. Congress passed a $ 900 billion measure in December that improved unemployment benefits and offered $ 600 per person checks.

But stimulus checks could be essential for unemployed people who are not receiving unemployment benefits, Forsythe said.

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They don’t get help from an unemployment program, including temporary federal programs that were set up in the spring to catch workers who otherwise would have fallen through cracks in the safety net.

“This indicates that the electricity [unemployment insurance] The system is unable to facilitate unemployment benefits, “Forsythe wrote.” If the federal government is interested in easing the burden on the unemployed, universal controls are probably the best way to support the 70% outside of the UI system. “

According to their analysis, around 24% of the unemployed have received benefits in the past two weeks. Another 4% have either been approved for benefits and have not received or applied for payment but not yet approved.

Other studies published before the pandemic have also shown relatively low reception rates, particularly in some southern states.

According to economists at the WE Upjohn Institute for Employment Research and the National Academy of Social Insurance, the percentage of unemployed receiving unemployment benefits had fallen from 44% in 1980 to about 28% before the pandemic.

Stimulus suggestions

President Joe Biden goes to the White House after leaving Marine One on January 29, 2021.

Drew Angerer | Getty Images News | Getty Images

President Joe Biden suggested a $ 1.9 trillion bailout last month. It would increase and expand unemployment benefits and offer $ 1,400 stimulus checks per person.

A group of 10 GOP legislators want to reduce a third round of stimulus checks to $ 1,000 per person. Some bipartisan lawmakers have called for lower income thresholds to qualify for checks.

Some have questioned whether stimulus checks are the best use of taxpayers money for fighting pandemics, especially if people with jobs can also qualify.

“The states’ unemployment insurance systems are better designed and equipped to provide adequate assistance to those who have lost jobs,” analysts for the conservative Heritage Foundation wrote in December. “These systems can also be adapted to ground conditions, which vary significantly across the US.”

8 million people

The reasons why so many people are not receiving unemployment benefits are not entirely clear, Forsythe said.

Many may not be eligible for benefits and others may believe they do not qualify (sometimes wrongly) and therefore not apply, she said. However, current data does not show the exact yardstick of either.

And there’s a confusing point in the economic data: the number of Americans eligible for unemployment benefits differs from the government’s official list of unemployed. This dynamic was seen in the spring. In May, the proportion of people receiving unemployment benefits exceeded the proportion of unemployed for the first time in history.

This is because federal officials define someone as unemployed when they are actively looking for work or are temporarily laid off (vacation). Some outside of these categories may be eligible for unemployment benefits – for example, someone who hasn’t lost a job but whose hours have been cut significantly.

According to the Bureau of Labor Statistics, almost 11 million people were officially unemployed in December. Forsythe estimates that around 8 million of them do not receive any unemployment benefits.

There are several reasons a person might not be eligible for unemployment benefits, Forsythe said. For example, the unemployment system aims to provide income support to those who have lost a job. But newer college graduates or other new labor market entrants are unlikely to be eligible, even through expanded federal programs, she said.

And while states suspended labor requirements at the start of the pandemic, many have re-imposed them. In these areas, workers who choose to remain inactive for health reasons from Covid or for other reasons such as childcare obligations may not receive help.

“Just spice it up [unemployment insurance] System won’t reach these people, “Forsythe said about the 70%.

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