Economy

US Spent $250B On Weekly Jobless Aid

The extra unemployment aid, totaling $600 a week for everyone who successfully filed for benefits, cost the federal government a total of $250 billion, The Wall Street Journal (WSJ) reported.

Any worker who had permanently lost his or her job, was furloughed or had hours cut had the ability to apply for the unemployment benefit, as millions of Americans lost their jobs in rapid succession due to the pandemic. The law, part of the sweeping CARES Act, was passed by the government in March.

The biggest week for payments, according to data from the U.S. Department of Labor seen by WSJ, was that which ended June 26, when the payments totaled $18.6 billion. California was the biggest recipient with $38.4 billion coming its way. South Dakota, with $177.1 million, was the lowest recipient.

And adjusted for the size of the labor force from February of this year before the pandemic, Michigan took the prize with $2.9 million per 1,000 workers in the state. New York and Pennsylvania were close behind, WSJ reported. Michigan was also the state with some of the highest unemployment application numbers due to its manufacturing-heavy economy that was debilitated by the pandemic.

Since the pandemic has continued unfolding over the summer, debates have unfurled over how to reopen the economy. Republican lawmakers say keeping the high benefits is a deterrent for people to return to work, although a study from Yale University found that workers with more generous unemployment benefits returned to work at a similar rate to those without those benefits, WSJ reported.

But the benefits expired July 31, and President Donald Trump replaced them via executive order with a $300-a-week stipulation for now, calling on states to add an extra $100 on top of that. Because of this, those on unemployment began to see their benefits drop back down to an average of $332 per week, which they were prior to the pandemic, while self-employed people and gig economy workers didn't even have that much, WSJ reported.

The government, meanwhile, remained deadlocked, closing out Friday (Aug. 6) without having passed any further aid. On Sunday (Aug. 9), Speaker of the House Nancy Pelosi and Treasury Secretary Steven Mnuchin both signaled that they were ready to continue negotiations out of the necessity to get more done.

——————————

NEW PYMNTS STUDY: ACCELERATING THE REAL-TIME PAYMENTS DEMAND CURVE – NOVEMBER 2020

About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

TRENDING RIGHT NOW