Please ensure Javascript is enabled for purposes of website accessibility

Lawmakers Are Debating How to Help the Unemployed. Here Are Some Solutions They Might Land On

By Maurie Backman – Jul 23, 2020 at 7:36AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Unemployment levels are still high nationwide, and laid-off workers need relief. With the $600 weekly boost to unemployment set to expire as early as this week, here are some options lawmakers might consider as they debate a second stimulus deal.

The COVID-19 crisis has caused unemployed to skyrocket, and while the economy has opened up since the lockdown that ensued back in March, we're still worlds away from things getting back to normal. Throw in the fact that cases are surging nationwide and many state are imposing added restrictions, and it's pretty clear that double-digit unemployment could be in the cards for the remainder of the year.

That's bad news for those who are jobless at present, especially since the $600 weekly boost to unemployment benefits that the CARES Act provided for is expiring in just a matter of days. Without that boost, the average recipient will be in line for just $380 a week, which means a lot of households will risk immediately falling short on their bills.

Man at laptop holding his head

Image source: Getty Images.

It's therefore quite clear that today's unemployed workers need help. As lawmakers debate a second relief package, here are some of the options they might land on.

1. Extending the $600 weekly boost

The $600 weekly boost to unemployment is keeping a lot of laid-off workers afloat right now. Some lawmakers are pushing to keep that boost in place through the end of the year, but those opposed are arguing that retaining that boost will demotivate jobless Americans to return to the workforce when that becomes possible.

There's logic to that argument. Many people are earning more money on unemployment than they did at their previous jobs thanks to that boost, so retaining it could create a scenario where jobless folks don't even try to seek out work.

2. Giving workers a smaller weekly boost

Those against maintaining the current $600 weekly boost argue that it's too much money, and that jobless workers shouldn't be getting a raise on unemployment. The solution, therefore, could come in the form of a smaller boost -- one that allows workers to keep up with their bills in a reasonable fashion, but is less likely to result in widespread raises.

In fact, in June, a group of economists proposed replacing the $600 weekly boost with a $400 boost after July. Combined with regular weekly benefits, low or average wage earners would see 80% to 90% of their former income replaced.

3. Providing a boost in harder-hit areas

Some parts of the country are seeing higher unemployment levels than others. Case in point: In June, the jobless rate in New York was 20.4%, which is substantially higher than June's 11.1% unemployment rate nationwide. Rather than just provide all jobless people with a boost for the rest of the year, another idea is to grant that boost only to those living in areas experiencing greater economic distress.

What's the right answer?

All of the above solutions are viable in light of the current recession, and the fact that the COVID-19 outbreak is showing no signs of slowing down anytime soon. Lawmakers are meeting this week and next to discuss a second relief package. Let's hope they manage to arrive at a solution that addresses our massive unemployment problem and doesn't leave jobless folks in the lurch.

The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.