The July Unemployment Benefits “Cash Cliff”
It’s a cash cliff millions of Americans face this summer as the emergency benefits — which lifted U.S. consumer incomes by a record 10.8% in April — expire. The loss of that safety net looms in the weeks ahead, well before a sustained recovery is likely to take hold from the sudden and deep recession brought on by the novel coronavirus. Personal income dropped 4.2% in May, data Friday showed.
The $600 supplement Congress added to weekly unemployment benefits is due to expire July 31.
Without new support, recipients face a substantial loss of income – particularly devastating for those like the Ramirez family who worked in hard-hit sectors like hospitality where new jobs are scarce. During high unemployment and a still-raging pandemic, the end of enhanced jobless benefits could drag on consumer spending, set off a wave of missed rent and mortgage payments and translate to a slower recovery, economists said.
That’s a great concern for Rachel Finchum, 55, who lost her job at a Nashville-based T-shirt printing company after 18 years. She has sought forbearance on her mortgage but is worried about what will happen when the government programs run out.
“I’m very scared to think I may not be able to make my bills,” Finchum said. “With my future so uncertain, I have a house payment and bills based on 18 years of what I was making.”