Almost 3 Out of 4 Jobless Workers Aren't Getting Unemployment Benefits, Data Shows
by Maurie Backman | Feb. 4, 2021
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The fact that unemployment benefits don't always reach those who need them makes an even bigger case for a generous stimulus check.
Unemployment benefits have helped many out-of-work Americans stay afloat during the coronavirus pandemic. But a new analysis by Eliza Forsythe, a labor economist at the University of Illinois, reveals that most jobless workers are not receiving unemployment income.
Forsythe estimates that 30% of jobless workers -- at most -- are receiving benefits through their state unemployment systems. That means around 3 of every 4 jobless workers aren't getting aid. That's roughly 8 million people. And it makes an additional round of federal relief all the more important.
Why are so many jobless workers not receiving benefits?
Based on the data used in the study, there are a variety of reasons why jobless workers are without unemployment benefits. Some people may not be eligible for benefits because they didn't lose a job, but couldn't get one in the first place -- as has been the case for many people who graduated college during the pandemic.
Also, while the requirement to actively look for work to receive unemployment benefits was largely suspended at the start of the pandemic, many states have reinstituted it. Some people may be out of a job right now due to a lack of childcare, with many school districts closed for in-person learning. But if those people can't qualify for unemployment because they're not actively seeking work, they're out of luck.
Furthermore, not everyone who's jobless is adept at navigating the benefit system. Not everyone has an internet connection, for instance, and claimants may have trouble getting through to file a claim over the phone in light of the volume state unemployment agencies are experiencing.
No matter the exact reasons, it's clear that jobless Americans need aid right now. And a third stimulus check may be the best way to supply it quickly, since none of the above reasons affect it -- the money simply arrives for everyone below certain income thresholds. In the previous rounds of payments, single tax filers making $75,000 or less and married couples making $150,000 or less received the full amount. That money could also go out fast -- especially since the IRS already has a system in place to send it out.
President Joe Biden's $1.9 trillion relief proposal features a $1,400 stimulus check for eligible recipients. Granted, that one-time payment may not be enough to compensate for an ongoing lack of unemployment benefits, but for struggling workers out of a job, it's a start.
Republican lawmakers are trying to talk the president down to a lower stimulus check amount of $1,000. They're also pushing to make the next round of aid more targeted by lowering the income thresholds for eligibility. Some lawmakers want to send additional stimulus funds only to the jobless. But figuring out who falls into that category may be easier said than done in light of the aforementioned data -- if most Americans who aren't working also aren't collecting unemployment benefits, identifying them properly may be a supreme challenge.
As such, Biden is aiming to stick to his original plan and send stimulus cash to more than just the jobless. And given that he's eager to provide that aid quickly, Americans could soon see additional money hit their bank accounts. It may not be enough to make up for missed unemployment benefits, but for some people, it could be a lifeline nonetheless.
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About the Author
Maurie Backman is a personal finance writer who covers everything from savings to retirement to healthcare. Her articles have appeared broadly on major outlets such as CNBC, MSN, and Yahoo.
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