You Can’t Afford to Live Anywhere in the
United States Solely on Unemployment
Insurance
Getty/Alex Wong
U.S. Senate Majority Leader Mitch McConnell (R-KY)
approaches the microphones, September 2020.
By Lily Roberts and Justin Schweitzer

Throughout spring and summer 2020, roughly 50 million Americans
have filed for unemployment insurance (UI). The pace, occupational
distribution, and scope of job loss eclipsed previous economic
downturns. However, Congress acted swiftly via the CARES Act to
minimize the economic crisis that would result from millions of newly
unemployed people having to rely solely on the benefits states were
equipped to provide after decades of disinvestment.

Federal Pandemic Unemployment Compensation (FPUC) bolstered
consumer spending that kept other workers employed; helped support
states and localities through the collection of sales tax; and precluded
a full-blown eviction crisis through the spring and summer. Borne out
This column was published in Center for American Progress, www.americanprogress.org.
of the technical difficulty of calculating replacement wage rates for millions at one time, the $600 weekly payment contributed to a
surprising decrease in the poverty rate.

The hope was that FPUC and other economic policy tools would buy time for public health efforts, allowing people to stay home as much
as possible while testing, contact tracing, and treatment efforts for COVID-19 expanded. Unfortunately, without a national plan to control
the pandemic, the health crisis has continued far longer than it has in other countries. In fact, some workers have experienced multiple
waves of unemployment, and layoffs are shifting from temporary to permanent as businesses close.

After the $600 FPUC expired at the end of July, Senate Republicans proposed a wholly inadequate $300 weekly boost to UI benefits, which
would extend through December the five-week boost of $300 enacted by President Donald Trump’s memorandum. This plan would come
up short everywhere for the typical one-adult, one-child family, and it would be more than $1,000 short every month in more than 94
percent of counties and county-equivalents in the country.

Unemployment in this crisis has been concentrated among low-income workers, particularly in the restaurant and hospitality sectors, and
among women and Black/Latinx workers. These workers were already hampered by the lack of an increase to the federal minimum wage
since 2009, a decade in which the minimum wage lost 21 percent of its purchasing power. These cohorts were also harmed by the
continued existence of the subminimum wage for workers who receive tips. Before the pandemic, even if they were able to schedule full-
time hours, these workers could rarely count on financial stability. As of June 2019, more than half of families in the bottom 20 percent of
incomes had nothing in savings, while those in the 20 to 40 percentile range had median savings of just $860, which can be depleted
quickly in the case of unexpected income shocks or in a family emergency. Those who note that the $600 FPUC was more than some
workers were making in wages should take issue with the abysmally low wages themselves—not with a policy intervention that kept
families and the economy afloat.

With the expiration of FPUC at the end of July, the millions who are still unemployed received only their state’s benefit amount. In many
states, this benefit is far too low to cover the rent alone—not to mention any other expenses. For example, in North Carolina—which is not
among the lowest-benefit states and does not have a low cost of living—typical weekly benefits are only $218. Average state UI benefits
are lower in states where more UI recipients are Black. A flat-rate FPUC of $600 helped counteract the inequalities in wages that can be
calcified by a proportional replacement calculation.

CAP analysis of typical unemployment benefits being received across the country shows that there isn’t a single county, parish, borough,
census area, or city in the United States where state unemployment benefits alone can cover a set of very modest monthly expenses (for
example, the 40th percentile of area rent) for a typical one-adult, one-child family.

CAP analysis finds that the $300-per-week boost to unemployment benefits enacted by President Donald Trump’s memorandum—which
has yet to be paid out in most states and is only expected to last for about five weeks—comes up more than $1,000 short every month for
the typical one-adult, one-child family in more than 94 percent of counties and county equivalents. The median monthly shortfall per family
for the Trump plan, while it’s active, is $1,587. Under the state benefits-only scenario that most people have been living with since the
CARES Act FPUC expired at the end of July, the median monthly shortfall is $2,787.

The House of Representatives passed an extension of the $600 FPUC in May. Even that amount would lead to a gap between median
monthly budget and UI benefits of $387, but that amount is more manageable than a gulf of $1,587 each month. Unemployment levels
remain extremely high, particularly for Black and Latinx workers as well as women. The FPUC must be extended until labor market
conditions improve for all subsets of workers instead of being repeatedly cut off on arbitrary dates.


Thet modest budgets in counties across the country demonstrates how important the $600 FPUC has been to families. Without it, families
everywhere would have fallen thousands short of affording basic necessities. The HEROES Act, passed by the House in May, would
extend the $600 FPUC that has been so crucial to keeping the overall economy afloat, while a Senate Republican plan to halve benefits
will fall woefully short of family budgets.

The authors would like to thank the Economic Policy Institute for sharing the data that comprise their Family Budget Calculator.
Lily Roberts is the director of economic mobility at the Center for American Progress. Justin Schweitzer is a policy analyst for the
Poverty to Prosperity Program at the Center.