Last week, 898 thousand Americans applied for benefits for the first time, while the number of layoffs also remains high.
The number of Americans who applied for unemployment benefits for the first time last week was the largest in the last two months and amounted to 898 thousand people, the US Department of Labor reported on Thursday. Of the 22 million jobs that the American economy lost due to the COVID-19 epidemic, almost 11 million have not yet been returned.
According to the Federal Reserve Bank of New York, only about 28 percent of Americans’ funds in the form of unemployment benefits by the end of June was spent. About half of the amount went to pay various debts, and about a quarter of the money Americans chose to save. This also negatively affects the economy’s growth, which in the US is highly dependent on consumer activity.
In general, US residents are now trying to save a lot more money than they spend. Simultaneously, the end of lump-sum Federal payments also highlighted the sharp disparity in benefit payments across states. In Arizona, for example, the maximum weekly payment is only $ 240, while in neighboring California, it is $ 450. In Florida and Tennessee, the maximum weekly amount is $ 275, while in New Jersey, it is $ 713.
According to a report by the Century Foundation, about a dozen states lowered the benefit ceiling after the 2008-2009 recessions. For example, in North Carolina and Wisconsin, it is no longer set as a proportion of the state’s average weekly wage, which usually increases each year. Instead, they are determined using formulas related to the recipient’s previous income.
Most states had to borrow billions of dollars to fund unemployment benefits during and after the great recession of the late 2000s. Many responded by reducing weekly payments and their duration to reduce budget spending, and only a few have since canceled them.
“This is a steady downward trend,” says Andrew Stettner, a senior research fellow at the Century Foundation. “Formulas have gradually become stingier.”
Some of the lowest benefits are provided in the states where the largest proportion of recipients is black Americans. According to the Century Foundation, in Mississippi, for example, 54% of benefit recipients in August are African – American. The maximum payout in this state is $ 235 per week. Black Americans are disproportionately employed in restaurants, retail stores, hotels, and other service industries, where the number of jobs has been severely reduced.
More than a third of residents who receive unemployment benefits are black in South Carolina, with a maximum benefit of $ 326 a week.