July 31 cutoff looms for unemployed
Unemployment insurance claims stop falling
San José, CA – In six weeks, tens of millions of unemployed people face the end of the additional $600 a week in unemployment insurance benefits. This additional benefit that helps low income workers the most is set to expire due to its being opposed by the Republican-controlled Senate. These same workers were hardest hit by the pandemic recession, and many face the prospect of their jobs not coming back. This is just another example of how the economic relief has helped large corporations, which can aided by the Federal Reserve, while low-income workers are subject to punishment by republicans who see the aid as discouraging people from returning to work.
This threat to cut the aid of the lowest-paid workers comes at a time when unemployment insurance claims have stopped falling. Up until this week new claims for unemployment insurance had been falling by 200,000 to 300,000 a week. But then on Thursday, June 18, the U.S. Department of Labor said that for the week ending June 13, new claims for state unemployment insurance (UI) were over 1.5 million, down only 60,000 from the week before. But new claims for the Federal Pandemic Unemployment Assistance, or PUA, rose by more than 60,000. Together, the state UI and Federal PUA had about 2.2 million new claims, the same as the week before.
Continuing claims for the state unemployment insurance, the federal PUA and Pandemic Emergency Unemployment Compensation or PEUC, and other programs had a total of 29.2 million people collecting benefits in the week ending May 30. This total was down only 300,000 or 1% from the previous week.
While Wall Street has bought into the illusion of a ‘V-shaped’ recovery with a quick return of jobs, the reality is that layoffs continue. In the last week, the hotel chain Hilton, ATT, and 24 Hour Fitness were among the large corporations announcing thousands of layoffs.
At the end of May there were 100 million Americans who delayed payments on their mortgage, auto and other loans, more than three times the number at the end of April. While the $1200 relief checks allowed millions of people to pay their loans in April, this has largely been spent, causing tens of millions to seek deferments on their loans. This will continue through June and July and become a catastrophe in August if aid to individuals is not extended.
Finally, another sign of weakness was that housing starts barely stabilized in May, up only 4.3% after a record 26.4% fall in April. Most economic forecasters expected a large 22% bounce in May. This means that thousands more construction jobs that were lost did not come back in May.
The unemployed and all workers need to mobilize to fight to extend the $600 unemployment benefits. They also need to fight for federal aid to state and local governments, including schools, which are facing massive cuts in spending from the loss of tax revenue from the pandemic recession. While Trump says the virus is “dying out,” the reality is that the pandemic is growing in almost half the states, with more reporting record levels day by day. In fact, it is the economy that faces dying out if the Republicans withhold aid and layoffs continue or even grow.