Title: Millions face 'income cliff' when extra $600 in UI ends
Headings: Millions of Americans will fall off an ‘income cliff’ when extra $600 in unemployment benefits ends
Millions of Americans will fall off an ‘income cliff’ when extra $600 in unemployment benefits ends
Hundreds of unemployed Kentucky residents wait in long lines for help with their unemployment claims on June 19, 2020.
Should the enhanced benefits be extended?
Tens of millions are still unemployed
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Content: “It would cause pain among millions of families, drive down economic activity and impede our recovery,” writes Dube. tweet
Vulnerable people, including people of color, younger and lower income workers and women , would be impacted most. Renters, who tend to be lower income and have lost a disproportionate number of jobs during the pandemic compared to homeowners, will also be hit particularly hard. When the supplemental benefits run out and tenants who are out of work receive only the base unemployment benefits, they will face an “income cliff,” with many “unable to cover food, clothing and other living expenses,” according to an analysis from the Urban Institute. Should the enhanced benefits be extended? Critics of extending the $600 a week federal benefit say that the system is easily susceptible to fraud and that the amount is so high — around 40% of workers could potentially earn more while unemployed than going back to work, according to a recent analysis — it discourages the unemployed from going back to work. The nonpartisan Congressional Budget Office recently released a report that concluded “the extension of the additional $600 per week would probably reduce employment in the second half of 2020, and it would reduce employment in calendar year 2021.” The $600 per week was added to unemployment as an incentive to get people to stay home during an unprecedented, “once-in-a-lifetime” health crisis, Matt Weidinger, a Rowe Fellow in Poverty Studies at the right-leaning American Enterprise Institute who studies unemployment insurance, tells CNBC Make It. Now that most states have reopened, the enhanced benefit “should expire as scheduled at the end of July,” or policymakers need to provide another reason for it to be extended, he says. “You want to help people, but you also want the economy to recover,” says Weidinger. “