Federal Pandemic Unemployment Compensation, the extra $600 a week in benefits unemployed workers now receive, is slated to end July 25, which could spell financial woes for the roughly 345,000 people in the state relying on it to make ends meet.
“We doubt from what we are hearing from our staffer friends on the HIll that they (Congress) will actually make a decision before July 25. It is very likely there will be a gap of some sort on that $600 a week benefit,” said Cher Haavind, deputy executive director of the Colorado Department of Labor and Employment, during a news call Thursday morning.
Since March 29, the CDLE said it has paid out $1.79 billion in FPUC dollars in Colorado, which surpasses the $1.14 billion paid out in state unemployment benefits.
“Unfortunately, more trouble is on the horizon as coronavirus cases continue to rise, states begin to re-shutter, and unemployed workers face further economic devastation when the unemployment insurance enhancements expire on July 25,” Elise Gould, a senior economist with the Economic Policy Institute, wrote in a blog post. “Without further aid to workers and their families as well as state and local governments, the economic pain will be with us for a very long time.”
Colorado stands to lose more than 66,898 jobs over the coming year if the extra $600 a week that the federal government is providing to unemployed workers and contractors goes away completely, according to an analysis from the EPI.
The estimate represents about 2.4% of the state’s current workforce and reflects the decrease in spending the loss of personal income that the elimination of federal benefits would cause.
The Ascent, a Motley Fool company, surveyed 2,000 Americans who lost income because of the pandemic and found that nearly one in three couldn’t last more than a month without the extra $600 a week. Nearly nine in 10 said they would be financially sunk within six months, which in turn would likely carry severe repercussions for landlords and consumer lenders.
But not everyone is on board with extending the extra $600 a month in benefits, which works out to the equivalent of $15 an hour. Combine state and federal benefits, and about five in six unemployed workers are making more not working than they would be working, according to the Congressional Budget Office.
Locally, employers have complained about workers refusing to return to their jobs, to the point of asking the state to cut off benefits. And the CBO, contradicting the EPI, argues that extending the payments into next year, which the House version of the HEROES Act proposes, could actually act as a drag on the economy.
The Bipartisan Policy Center, calling the decision one of the most important Congress will make this summer, argues for a compromise. Benefits should be reduced to $400 a week through September and then revisited. If the outbreaks flaring up in multiple states worsen and cause a return of stay-at-home orders, then benefits should be extended, the center argues.