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Unemployed American workers face a critical juncture on the first day of August, when extra jobless benefits keeping some from poverty are set to expire.
The $600 per-week payments have lessened the hit for millions of American workers laid off as the COVID-19 outbreak shuttered businesses across the United States.
But Congress financed the payments only through July 31, meaning they are scheduled to run out even though hiring hasn’t picked back up in many parts of the country.
Lawmakers are gathering in Washington to debate what to do next, with President Donald Trump favoring a payroll tax cut while Democrats want to see the benefits extended.
Though critics say the extra funds have encouraged people to collect unemployment rather than work, Gary Burtless, an economist at the Brookings Institution, credited them with sparing some 31 million people a more severe hit from the downturn.
“They can pay for their rent, they can pay for their groceries and so forth,” Burtless said.
The expanded benefits included in the $2.2 trillion CARES Act federal rescue package are on top of weekly benefits set at the state level.
Those payments range in length, from six months in Maryland to three months in Nevada and Georgia. There is also a huge disparity in how much money is given, from $235 a week in Mississippi to $823 a week in Massachusetts.
- Better than a job? -Burtless said the additional payments helped millions of Americans avoid slipping into poverty, and provided support to the consumer-driven economy.
“When they’re collecting the check, they can spend money and that money is then received by employers and companies and can keep employment up in those companies and employers,” he said.
A note from Oxford Economics said the expiration of the benefits would lead unemployed individuals to lose about two-thirds of their income in August.
Extending the benefits through December would lift US growth around two percent in the fourth quarter and “preserve one million jobs compared to a sudden-stop policy.”
Critics of the money contend the generous payments discourage workers in low-wage jobs from searching for employment, a conclusion partially supported by a recent Federal Reserve report that documented some companies complaining of difficulty in filling posts.
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