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From March 2020 to July 2021, states spent a combined $ 794 billion in federal and federal unemployment benefits, according to a spokeswoman for the U.S. Department of Labor.
According to labor experts, this sum is far higher than in any other period in history.
Due to the different timescales of economic downturns, it is difficult to make direct comparisons. As an example, we can look at 2009, the year unemployment peaked during the Great Recession, which before the pandemic was the worst US recession since the Great Depression.
According to an analysis by the Urban Institute, the unemployed received a total of 128 billion US dollars in unemployment benefits in 2009. By comparison, the unemployed had received $ 637 billion – five times as much – about a year after the CARES law came into effect, according to The Century Foundation.
The CARES Act guidelines aimed to replace a large portion of lost paychecks as laid-off workers were urged to stay home to help reduce the spread of the virus.
“We had a lot of people we wanted to stay at home,” said Betsey Stevenson, professor of economics and public policy at the University of Michigan. “We also had a lot of people who immediately lost their jobs.”
The law temporarily increased weekly benefits by $ 600 per week and then by $ 300 per week at various times. These infusions essentially doubled or tripled the average weekly benefit.
It expanded aid to millions of people, including the self-employed and gig workers, who were previously not eligible for traditional state unemployment insurance. The long-term unemployed also received additional federally financed benefit weeks when they had used up the state aid.
The $ 794 billion spent through July 2021 includes:
- Bonus Payments ($ 300 and $ 600 per week): $ 418 billion
- Government unemployment insurance: $ 167 billion
- Pandemic Unemployment Assistance (for Gig workers): $ 122 billion
- Pandemic Emergency Unemployment Compensation (for the long-term unemployed): $ 75 billion
- Extended benefits (for the long-term unemployed): $ 12 billion.
Determining the number of individual people who received benefits during the pandemic is an administrative challenge, according to labor experts. The Department of Labor does not collect this data from states, according to a spokeswoman.
A year after the pandemic broke out, up to 46.2 million people had received benefits for at least a week, which the Century Foundation estimates is about 1 in 4 workers.
That forecast includes 15.5 million people who have received at least a week of pandemic unemployment benefits (for the self-employed and gig workers) and who have never been eligible for national benefits.
“You could certainly say [unemployment benefits] clearly reached a lot more people because they changed reporting, “said Julia Lane, an economist and professor at New York University, of the legislature’s extension of the CARES Act.
By comparison, 14.5 million Americans received at least one benefit payment in 2009 – less than a third of the total annual amount of the pandemic, according to analysis by the Century Foundation. And 5 million did so in the 12 months leading up to the pandemic.
“Total weekly compensation” is another way of measuring the extent of benefit receipt. It measures the number of weekly benefit payments.
It is not an accurate measure of the number of individuals as it does not control duration. (For example, 10 weeks of benefits paid can mean that one person has been collecting help for 10 weeks, or that 10 people have been collecting help for one week each.)
According to the Ministry of Labor, a total of around 1.5 billion weeks were compensated from March 2020 to July 2021.
The sum includes:
- Pandemic unemployment benefits: 609 million weeks
- Regular government benefits: 555 million weeks
- Pandemic Emergency Unemployment Compensation: 251 million weeks
- Extended benefits: 34 million weeks
By comparison, around 400 million weekly payments were spent in 2009, according to The Century Foundation, about half of the payments made in the first year of the pandemic.
The total number of the pandemic is also likely to be underestimated as some states have not provided regular pandemic unemployment benefits data, according to the Department of Labor.
About half of the US states ended their participation in some or all of the federal unemployment programs in June or July before their official expiration that weekend, which limited the scope of payments.