Picture this: a $600 a week loss in your income, few job openings, and a significant threat to your health or your family’s health if you do go back to work. Now multiply that by 35 million. That’s the calculation if expanded federal unemployment insurance (UI) benefits are allowed to expire later this month.
It’s not an exaggeration to imagine many workers gambling their — and their community’s — health in order to keep their homes and put food on their tables.
The U.S. Senate needs to follow the House’s lead and extend the $600 in expanded weekly UI payments that have flowed to millions of Americans, allowing many of us to navigate the unprecedented coronavirus pandemic and subsequent economic fallout with a relative sense of security.
The country is likely facing the most serious economic threat in our lifetimes, and failure to act will contribute to greater hardship and a more severe recession.
In early July, U.S. Department of Labor data showed 1.4 million additional workers across the nation filed for UI benefits in a week. Another one million filed claims for Pandemic Unemployment Assistance (PUA), which provides coverage for workers who normally do not qualify for UI because of its outdated rules, such as independent contractors and gig workers.
In Minnesota, as of the first week of July, almost 365,000 workers were receiving or had applied for regular UI — that’s more than the entire population of the city of St. Paul. Another 64,000 Minnesotans are receiving or applied for PUA.
Unlike other recessions, this one is coupled with unprecedented threats to public health, requiring tens of millions of people to remain at home, or limit their visits to local businesses and community spaces in order to stop the spread of the virus.
The breadth and depth of job loss affects every state, and does not spare workers and families in either rural or metropolitan areas. Most unsettling, job losses have fallen more heavily on our Black and brown Minnesotans who are also less likely to have savings to cushion the loss of income — mirroring the disproportionate harmful health consequences the coronavirus has had on these communities.
Congress’ quick action early in the pandemic to expand unemployment insurance worked as designed: Cash flowed to workers to replace some of their lost income due to sweeping job closures, as many businesses shuttered. This economic lifeline makes it possible for American workers and businesses to take the necessary steps to slow the spread of COVID in their communities. Expanding UI payments also has an economic multiplier effect, keeping dollars flowing through local economies as folks buy necessities at grocery stores, gas stations, and other retail stores, and can make their rent or house payments.
Under ordinary circumstances, unemployment insurance is designed to address temporary job loss. But the U.S. is not back to business as usual. Nationally, unemployment remains high and the Congressional Budget Office projects that it will remain above 10% through most of 2021.
Because of the ongoing public health threat and reduced economic activity, it’s unrealistic to expect that millions of Americans will be back at work when their federal expanded UI benefits expire later this month.
Congress and the president must act to continue the federal UI expansions, which would support Americans who continue to need essential income to fill their fridges and afford their homes, while also preventing a deeper and longer economic recession. Expanded UI should remain in place while economic conditions warrant it; current projections suggest that it would be needed through 2021. Allowing expanded UI to expire could cost Americans 5 million jobs and $500 million in personal income; the Economic Policy Institutes estimates that Minnesota would lose more than 100,000 jobs if expanded UI is not continued.
Minnesotans can’t afford for our Congressional representatives to fail to act — the strength of our economy and well-being of millions of Americans are in their hands.