August 10, 2020
Down to the wire on unemployment benefits
SAN FRANCISCO (INT) - The continued spread of the coronavirus has now required businesses to slow or reverse reopening. Over 2.8 million Californians were unemployed in June, and in the last week workers filed 456,000 new claims for unemployment compensation.

Against this landscape, the $600 per week supplemental unemployment benefit granted by the CARES Act is set to expire at the end of this month. A potential decision by Congress to extend or adapt this benefit has important consequences: supplemental assistance not only supports workers who must stay home due to business closures but also injects money into the economy, the Public Policy Institute of California says.

The late spring jobs rebound came mostly from the hardest-hit sectors, especially accommodation and food services. California added about 560,000 jobs between May and June, and workers re-entering the labor force made up just over two-thirds of that growth. Health care and retail were the second and third largest sectors of job growth in June, each adding over 70,000 jobs. Jobs have not returned in other sectors like administrative services or government, which experienced smaller but significant initial declines.

Although the hard-hit accommodation and food services sector showed the most job gains, this sector also originated the most unemployment claims. Even in a good economy, workers in this sector experience high poverty, based on the California Poverty Measure. The $600 per week supplement more than replaces their typical wages. As of 2018, the average weekly wage in accommodation and food service was $481; today the median worker claiming unemployment insurance (UI) receives 173% of their prior wages, including the supplement.

Absent new legislation, they would see weekly unemployment benefits drop from $841 to $241 at the end of the month.
Story Date: August 4, 2020
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