Congress, Don't Forget the Long-Term Unemployed
The Cares Act will be expiring soon, hurting those who have been without a job the longest the most.
Too many Americans are still without jobs.
Source: Bloomberg
Lost in the latest economic headlines touting the rebound is the fact that some 1 million more workers last month were out of work for more than 26 weeks, joining a group referred to as the long-term unemployed. That historic jump offset some 40% of the decrease in the rest of the unemployed workers. Not only that, but 742,000 people applied for jobless benefits last week, more than the 700,000 economists forecast. Since March, initial unemployment claims have been higher than in any prior recession. Worst of all, initial claims edged up last week after declining for more than a month.
What’s so important about 26 weeks? That’s when regular jobless benefits end in most states (and even sooner in some). The Cares Act passed by Congress in March funded an additional 13 weeks of benefits, providing a lifeline for the millions of families who lost jobs and income due to the pandemic. Alas, this lifeline will soon be severed when the Cares Act expires. And with some 1 million new cases of Covid-19 reported weekly, it's safe to say that the economic outlook will be under pressure for some time despite the good news on the vaccine front.