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.
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.