$600 Unemployment Benefits Are About To End, Hitting Households And The Economy : Coronavirus Live Updates Millions of Americans who lost jobs during the pandemic are in danger of having their incomes cut for a second time. The sudden halt in payments would be felt in households and throughout the economy.
NPR logo

The End Of $600 Unemployment Benefits Will Hit Millions Of Households And The Economy

  • Download
  • <iframe src="https://www.npr.org/player/embed/892476371/892943777" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
The End Of $600 Unemployment Benefits Will Hit Millions Of Households And The Economy

The End Of $600 Unemployment Benefits Will Hit Millions Of Households And The Economy

  • Download
  • <iframe src="https://www.npr.org/player/embed/892476371/892943777" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

DAVID GREENE, HOST:

Tens of millions of Americans who lost their jobs have been relying on federal unemployment insurance, but those payments expire at the end of the month. And Congress has to decide whether to extend them. Here's NPR's Scott Horsley.

SCOTT HORSLEY, BYLINE: Lorena Schneehagen used to teach little kids at a preschool in Ann Arbor, Mich. She lost her job when the school shut down, and her son is about to start college. Schneehagen is grateful for the extra $600 a week in unemployment benefits that Congress OK'd during the pandemic.

LORENA SCHNEEHAGEN: I need that to help pay his tuition and for food and just to pay the general bills.

HORSLEY: Schneehagen is also nervous about her husband's job. He manages a hotel where bookings have been way down.

SCHNEEHAGEN: He personally had to lay off about 40 people of his 50 or so staff. This is - the hotel industry in general is just a very hard hit.

HORSLEY: Across the country, more than 30 million people are in the same boat. Courtney Woodruff lost her job as a bartender at a brew pub in Denver.

COURTNEY WOODRUFF: The extra $600 from the government has obviously helped me tremendously. I don't really spend a lot. My money is going towards rent and food right now.

HORSLEY: While ordinary unemployment benefits usually cover just a fraction of a worker's lost wages, the addition of the federal money was designed to fully replace the average worker's missing paycheck. Stephen Pingle, who was laid off from his job laying Internet cable in Nashville, says that's made unemployment a lot less stressful, but he knows the supplemental benefit is set to run out in just over a week.

STEPHEN PINGLE: I'm trying not to worry too much about it, but it's hard to keep pushing it off knowing that there's potentially that massive of a financial hit coming.

HORSLEY: And if that hit comes, there will be less money for grocers, landlords and an economy that depends on consumer spending. Ryan Nunn, who leads applied research at the Federal Reserve Bank of Minneapolis, says cutting off benefits to so many people at once would reduce their collective spending power by about $19 billion a week.

RYAN NUNN: However you slice these numbers, we're talking about very large amounts that mean quite a bit to workers and to the macro economy.

HORSLEY: In an interview last week, Nunn said the extra jobless benefits have acted as an important crutch for the economy. Without them, we probably would have seen more defaults on car loans and credit card bills and more people falling behind on their rent. That's one reason House Speaker Nancy Pelosi argues the government should keep the $600 a week payments flowing beyond the end of this month.

(SOUNDBITE OF ARCHIVED RECORDING)

NANCY PELOSI: We're never going to have our economy come back unless we recognize that we must put money in the pockets of the American people.

HORSLEY: Some employers have complained that the generous jobless benefits make it hard for them to attract workers. Nunn says while ordinarily that would be a concern, there is little danger of a worker shortage when unemployment's in double digits and the virus itself is forcing new limits on economic activity. Still, it's a complaint the administration takes seriously. Treasury Secretary Steven Mnuchin told CNBC if jobless benefits are extended, it will have to be in a different form than the flat $600 a week.

(SOUNDBITE OF ARCHIVED RECORDING)

STEVEN MNUCHIN: I've heard stories of where companies are trying to get people back to work, and they won't come because of the enhanced unemployment. But we'll fix that and we'll figure out an extension to it that works for companies and works for those people who will still be unemployed.

HORSLEY: Schneehagen, the Michigan preschool teacher, doesn't expect to be called back to her old job anytime soon. Although the school's reopened, enrollment is way down. They're having to cut costs even on things like air conditioning. She's started to look for work as a private nanny.

SCHNEEHAGEN: I really think there's going to be a crunch for jobs pretty soon. There aren't that many jobs out there. And there are going to be so many people looking in the next couple of weeks.

HORSLEY: Scott Horsley, NPR News, Washington.

(SOUNDBITE OF FEVERKIN'S "APRIL")

Copyright © 2020 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.