With the recently passed Coronavirus stimulus bill (CARE act) many Americans and the media are focused on the one-time direct cash stimulus payments to low and middle income America. But it’s really the unemployment benefits extension that’s the most significant stimulus payment.
For example a family of four (2 adults and 2 kids) earning less than $100,000 would get the one-time $2,400 stimulus payment and $500 for each kid. That’s a total of $3,400. If one of the parents lose their job due to Coronavirus related reasons they would then be eligible for their states extended unemployment insurance (UI) benefit plus the extra $600 per week supplemental UI stimulus benefit. The extra UI benefit is worth up to $7,800 over the thirteen weeks it is in effect (~approx 4 months). So in total that’s over $10,000. If both parents lose their jobs, the stimulus benefit would be even larger.
Now my point here is not to say that the additional stimulus benefit for unemployed will truly offset actual wages or the other related impacts from losing a job. That is likely far more devastating and longer term than just the four months the extra stimulus payments will be in effect for. But I wanted to emphasize that the true direct payments from the stimulus package is really the unemployment benefits increase and extension and not the one time payment. As the economy gets worse from the Coronavirus induced fallout, it’s the UI stimulus that will matter a lot more over the next few months.
What are your thoughts? Feel free to leave a comment (be polite) on your viewpoint. Should the UI stimulus benefits be extended past July 2020 if the economy is not any better?
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