The United States Senate has come to an agreement on a $2 trillion stimulus package in order to provide relief to the reeling economy. The quarantine has led to people staying in their homes, countless businesses shutting down, and frightening dips in the stock market.
The package provides much needed funds to the states and local districts, and almost as much again for hospitals. Much of it will provide direct cash to families and individuals, and the rest provides lending power to the government in order to protect floundering businesses. The bill also provides new assistance for the unemployed.
United States Unemployment Insurance
As businesses have shut down, temporarily or otherwise, millions of Americans are finding themselves out of work. There have been more thn 3 million new applications for unemployment benefits, far exceeding any previous situation. The United States unemployment insurance (UI) plan exists to provide help to people out of work. Each worker is taxed in order to provide a cushion in case of the loss of work, and the states manage the distribution of those funds.
While the amount varies, UI can be as long as 26 weeks, or as little as 12 depending on the state. And the benefits are rarely more than fifty percent of the average weekly wage. The system has become overloaded, and only looks to get worse if the shutdown – in any form – is to continue for more than a few weeks.
Changes in Response to the Coronavirus
The new bill has several changes that are of course temporary but could have long-lasting impact on the way the United States handle crises like this one. The most obvious change is to add $600 per week to every unemployment check. This would raise the rate of wage replacement anywhere from forty to eighty-five percent.
The bill also increases the amount of time a person can receive UI benefits, from 26 weeks to 39 weeks, and it waives the typical weeklong waiting period a person must endure before receiving a check. One interesting change is to extend unemployment benefits to gig economy workers. A gig economy worker is someone who works for a company such as Uber or Doordash, providing services through an app or program.
These workers have recently been categorized as independent contractors by some courts, and this law seems to solidify that status. They will be receiving benefits as well under the new stimulus package. And one change that may prove to last beyond the present crisis is the call to create a Pandemic Unemployment Assistance program. While it may only be intended to respond to the coronavirus, it is possible that it will remain in existence to prepare for and respond to new crises in the future.
Sources:
https://www.cnn.com/2020/03/25/politics/senate-stimulus-unemployment-benefits-coronavirus/index.html