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America's jobless are about to lose their $600-a-week lifeline

Reade Pickert, Michael Sasso and Maeve Sheehey, Bloomberg News on

Published in Business News

Earning More

Some Americans are making more money from jobless benefits than they did when they were employed. Two-thirds of workers who are eligible for unemployment insurance can receive more than what they lost in earnings, according to a paper by researchers at the University of Chicago.

Amanda Steinhauser, 33, is one of them. Before the pandemic began, she earned $14.75 an hour at a small party supply company in Blackwood, New Jersey. Now, she's earning nearly twice as much with unemployment assistance. As a result, she has paid off some credit card debt and is saving hundreds of dollars each week.

But she says her savings will run out in a matter of months, before the U.S. jobs market is expected to return to normal. Without the additional federal top-up, Steinhauser's unemployment benefits will fall to $280 a week, about half of what she made before the pandemic.

"I have been looking for a job ever since I was laid off back in March, and I haven't been able to find anything," Steinhauser said. "If I don't have that $600, I know I'm going to be screwed."

Employers argue that the $600 boost has created a disincentive for employees to return to work. For example, at the diner chain Waffle House Inc., based in Norcross, Georgia, some employees aren't coming back to work because they make more money from unemployment, creating a shortage during some shifts, according to spokeswoman Njeri Boss.

 

Earning Less and Jobs Are Scarce

Those searching for jobs have faced an extremely challenging -- and competitive -- market. Job postings as of July 10 were about 23% lower than they were in 2019, according to data from hiring site Indeed.

Jill Haber, 42, has been looking for a job since April when she was laid off from a senior position at a marketing agency in Los Angeles. The extra weekly benefits have helped her pay monthly bills but doesn't make up for her salary. Adding to her expenses, Haber now has to pay for her own healthcare.

Without the extra $600, she said she'll be getting roughly a fifth of what she made at her job. She will have to dip into her savings, which she had intended to use in the future to buy a home or retire. Making matters worse, her car lease will soon expire and she needed to buy a car. Without income, Haber's 78-year-old mother had to co-sign her loan. She said she's lucky she has savings.

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