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Unemployment aid of extra $600 to end a week before July 31, leaving millions of jobless Americans in the lurch

It will undoubtedly deliver a blow to the unemployed workers who depend on that money to boost state benefits, which is an average of less than $400 a week
(Getty Images)
(Getty Images)

The people of America were fortunate to see their deeply polarized political class agreeing at least once, though after considerable debate, to provide them with financial relief in the wake of the coronavirus pandemic which has paralyzed the economy. Many unemployed Americans are banking on receiving a benefit of extra $600 a week as part of the CARES Act, worth $2.2 trillion, to sustain themselves. While they were expecting to receive the benefit till July 31, they could be left distraught as the money will stop coming "nearly a week earlier", USA Today reported. 

According to a statement issued by the labour department: "The (Federal Pandemic Unemployment Compensation) $600 can be paid for weeks ending no later than the week ending prior to Friday, July 31, 2020. For all states except (New York), that is Saturday, July 25th. New York's end date is Sunday, July 26th." It will undoubtedly deliver a blow to the unemployed workers who depend on that money to boost state benefits, which is an average of less than $400 a week. 

A technical confusion between state and federal benefits

According to the USA Today report, the states pay the unemployment benefits on a weekly or bi-weekly basis with a defined end date on either Saturday or Sunday. But the federal legislation authorizing the additional compensation says the benefit will conclude "on or before July 31", which is Friday. It added that given the payment schedules or most states, the last week of the extra $600 payments will conclude on the prior Saturday or Sunday. The technical confusion has now put several Americans in a tight spot. Because of the confusion, some states also listed July 31 as the end date, including New York. But the state’s labor department said it would switch the end date on its website for the additional benefit from July 31 to the week ending July 26, Today said after a query. Alabama, on the other hand, said it will send an alert to the beneficiaries that their extra income will end after July 25.

The employment scenario in the US worsened with the spread of the pandemic that saw widespread shutdown. In 13 weeks, over 45M people filed first-time claims for jobless benefits as the unemployment rate soared although the month of May saw it going down to 13.3 percent from more than 14 percent in April. 

Economic experts warned that doing away with the $600 benefit could see the economy taking more time to rebound. "We've all been saying it’s July 31st, but it’s not," Heidi Shierholz, senior economist and director of policy for the left-leaning Economic Policy Institute, was quoted as saying by USA Today. Ohio Democratic Senator Sherrod Brown told the media on Thursday, June 25, that it was important to carry on with the benefit at a time when the country is still struggling to contain the pandemic that has affected more than 2.4M people and claimed over 125,000 lives in the US.

The Trump administration is not in favor of enhancing the employment benefits because it wants people to return to work and considers the benefits serve as disincentives to find a job or return to one. Two-thirds of Americans have been receiving more money from unemployment benefits than they did from their jobs and for several of them, the very thought of that cash flow drying up is giving nightmares.