August 13, 2020 – New data from the Center for American Progress, Economic Policy Institute Policy Center, and the Progressive Caucus Action Fund show that existing state unemployment insurance (UI) leaves working families thousands of dollars in the red each month. On July 31, the GOP-led Senate allowed Federal Pandemic Unemployment Compensation—the $600-per-week boost to unemployment insurance Congress created in March—to expire, cutting unemployed workers’ benefits by about two-thirds and leaving families with only low state unemployment insurance benefits to live on.
This new analysis compares modest monthly expenses of a single parent with one child in more than 50 select states, counties, and congressional districts across the nation with average state unemployment insurance benefits paid to those workers—and found that unemployment benefits are woefully insufficient to meet workers’ basic expenses like housing, medicine, food, and utilities. Typical expenses reflect EPI’s estimate of a modest family budget. Current unemployment benefit levels leave workers thousands of dollars behind every month. For example, under state UI benefits:
- The typical single parent in Nassau County, Florida, is receiving just $934 per month: falling $3,562 short of what they need to pay for basic monthly expenses.
- The typical single parent in York County, Maine, is receiving just $1,215 per month: falling $3,519 short of what they need to pay for basic monthly expenses.
- The typical single parent in Boone County, Kentucky, is receiving just $1,185 per month: falling $3,184 short of what they need to pay for basic monthly expenses.
On Saturday, President Trump issued a memorandum that purports to provide unemployed workers an extra $300 per week in benefits. However, President Trump’s proposal is inadministrable, possibly illegal, and would not get relief to desperate families for weeks or months. In reality, families are only receiving state UI benefits—if they’re receiving benefits at all. Even if the President’s proposed benefit did eventually reach working families, this analysis finds that a $300 boost to UI would still leave working families across the country deep in the red. This financial disaster would fall hardest on workers of color—especially Black women, who receive lower benefits on average than white workers and are disproportionately likely to live in a state with low benefits.
“Approximately one in five workers nationwide is currently unemployed. Unemployment benefits have been a lifeline for these workers, but as this data show, a meager $300 boost to the benefit level is simply unlivable in cities and states across the nation. It would mean choosing between making rent or payments on a car they need to get to their next job interview, between paying for food and keeping the lights on, between buying diapers and soap and medication,” said Progressive Caucus Action Fund Director Liz Watson. “No one should have to make these impossible choices. Working people need the Senate to do its job and renew the $600 weekly benefit.”
“I was working at a restaurant so I could support my son with special needs and my parents,” said Mary Proffitt, an unemployed restaurant worker and member of Unemployed Action, a project of the Center for Popular Democracy, in Kentucky. “I own my home, but with no income for 8 weeks, it’s just a matter of time before utilities are cut off. It’s a matter of time before I can’t afford food. I’ve been making and selling masks to try and afford groceries—that’s how I’ve been able to feed my family. I’m scraping money together to feed my child ramen noodles and I need the $600 to cover needed car repairs and better nutrition for my son.”
“Cutting off the $600 benefit will exacerbate racial inequality. Black and brown communities are bearing a disproportionate burden from the pandemic, both in terms of health and the economic impact, due to historic and continuing systemic racism,” said Economic Policy Institute Policy Center President Thea Lee. “This extra $600 benefit is essential for tens of millions of people to buy food, pay rent, care for their children, and afford basic necessities. If it is cut off, it will mean a sharp decline in living standards, an increase in poverty, an unnecessary economic downturn, and completely avoidable suffering.”
“Even if states are able to get entirely new UI systems up and running, as required by the Trump Administration’s memorandum, $300 a week will be nowhere near what families need to put food on the table and keep a roof over their heads,” said Lily Roberts, Director of Economic Mobility at Center for American Progress. “The House of Representatives passed a bill in May to maintain the $600-per-week extension, and it’s past time for the Senate to come to the bargaining table for a serious conversation about the financial future of millions of Americans. Millions of families are counting on these benefits to stay afloat, and if the gaps between state UI benefits and modest family budgets aren’t closed, this economic crisis will deepen, and any hope of an equitable and swift recovery will stall.”
“As the Trump Administration is trying to unilaterally cut federal unemployment benefits in half, this report is a stark reminder of how hard it is for unemployed workers and their families to cover their living expenses. With the pandemic failing to abate, schools still closed, and businesses remaining closed, it is critical for Congress to reactivate the expired Federal Pandemic Unemployment Compensation,” said Andrew Stettner, Senior Fellow at the Century Foundation.
- #Savethe600 coalition blasts Trump administration’s false promise of unemployment insurance relief
- Economic Policy Institute: Cutting off the $600 boost to unemployment benefits would be both cruel and bad economics
- CNBC: Millions of Americans will fall off an ‘income cliff’ when extra $600 in unemployment benefits ends
- The Century Foundation: More than 25 million Americans are about to lose an essential $600-a-week unemployment insurance benefit
The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI believes every working person deserves a good job with fair pay, affordable health care, and retirement security. www.epi.org