In Response to Ways & Means’ Request, New CBO Analysis Shows that Eliminating Emergency Unemployment Compensation Will Harm Vast Majority of Unemployed Workers, Disproportionately Hit Women, Young Workers, and Communities of Color

Jul 1, 2020
Press Release
Supplemental pandemic UI is set to expire July 31, 2020
WASHINGTON, DC – In response to a House Ways and Means Committee request, the Congressional Budget Office (CBO) today released its analysis of who will receive regular unemployment benefits, supplemented by Federal Pandemic Unemployment Compensation (FPUC). FPUC is currently scheduled to end by July 31, cutting the average worker’s benefit by about two-thirds. CBO’s report finds that although the vast majority of unemployed workers of all races, genders, and income levels are relying on unemployment benefits, women and racial minorities make up a disproportionate share of recipients and are likely to especially feel the impact should FPUC expire at the end of July as scheduled under current law. The House-passed Heroes Act extends this additional $600-per-week federal assistance through January 31, 2021 for workers who need it.
 
As of the week ending on June 20, over 47 million Americans have filed for unemployment since the beginning of the pandemic and there are only four payments of FPUC left. Communities of color have been disproportionately impacted by COVID-19 infection and unemployment benefits are helping to keep them afloat until it is safe for them to return to work. 
 
“The additional $600 in pandemic unemployment insurance that we passed as part of the CARES Act back in March has been an absolute lifeline to the millions of recently unemployed Americans,” Ways and Means Chairman Richard E. Neal (D-MA) said. “COVID-19 has brought the deep racial inequities in our society to the forefront, and this report shows that the unemployment crisis is no different. Communities of color have disproportionately experienced job losses during the coronavirus crisis and will disproportionately suffer if Republicans continue to insist on slashing their unemployment benefits this month. Senate Republicans must follow House Democrats’ lead and extend supplemental unemployment benefits so workers can get by until it’s safe and feasible for them to return to work. We have a long way to go before safe work conditions, child care, and economic reopening make it possible for all Americans to return to work, and we must ensure that additional help is available in the meantime.”
 
“These past months have demonstrated with unblinking clarity the impact of systemic racism on every aspect of our society,” said Worker and Family Support Subcommittee Chairman Danny K. Davis (D-IL). “The CBO report underlines and contains further proof of the cruel disproportionate impact on communities of color, especially African Americans. African Americans make up a disproportionate share of essential workers, of those hospitalized by the virus, of those dying from the virus, and of those bracing for evictions.  The report details how minorities make up a disproportionate share of recipients who will now bear a disproportionate share of the impact of the expiration of FPUC at the end of July. Failure to continue a substantial FPUC would represent a racially-discriminatory action. Period.”
 
The analysis found that:
  • 19 million Americans – about three-fourths of unemployed workers – are projected to receive state unemployment benefits, supplemented by Federal Pandemic Unemployment Compensation, in July 2020. (FPUC provides about two-thirds of the total payment for the average worker.) This number would be even higher if it included people who are eligible for other unemployment assistance enacted in response to COVID-19, like the Pandemic Unemployment Assistance for gig workers.
  • 47 percent of the workers receiving unemployment benefits in July and facing the cutoff of supplemental benefits are people of color.
  • 53 percent of workers receiving unemployment benefits who will be subject to the cutoff are women.
  • Black workers will be disproportionately affected by the FPUC cutoff as they are both more likely to be receive unemployment benefits (16 percent as opposed to 12 percent for all workers) and more likely to receive earned unemployment benefits among the unemployed (81 percent versus 76 percent for all workers).
  • Latino workers will also be disproportionately harmed by the loss of unemployment benefits because of their high rates of unemployment, even though they are less likely to receive benefits when unemployed than other groups.
  • Workers under 30 are disproportionately likely to be unemployed and receiving benefits.17 percent of those in the labor force are projected to receive benefits, as compared to 12 percent of workers overall.
  • Workers at all income levels are relying on unemployment benefits at similar rates, but 59 percent of those who will be affected by the cutoff are in the bottom half of the income distribution, and three-fourths are non-college graduates.
The full CBO report can be accessed HERE.
 
A Ways and Means Committee analysis showing the average benefit cuts for workers in each state, the District of Columbia, and the U.S. territories following the FPUC’s expiration can be found HERE.
 
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