Half of out-of-work Americans were unable to cover basic expenses in August as the additional unemployment benefit dropped to $300, study finds
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- Half of out-of-work Americans were unable to cover basic expenses with money from their unemployment benefits in August as the additional weekly unemployment benefit dropped to $300 from $600, according to a study from Morning Consult.
- It's also becoming less likely that furloughed or laid-off workers will be able to return to their previous jobs, according to the study.
- Still, workers continued to return to jobs in August — 8.6% of workers employed in January were out of work in August, down from 11% in July.
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American workers that are still unemployed following coronavirus pandemic layoffs earlier in the year are facing an increasingly grim outlook, according to Morning Consult data.
Half of out-of-work Americans were unable to cover their basic expenses with money from their unemployment benefits in August as the additional weekly unemployment benefit was slashed to $300 from $600, according to a study published Tuesday by Morning Consult. That's up from 27% in July.
At the end of July, the additional $600 weekly unemployment benefit expired, immediately slashing weekly income for millions of out-of-work Americans. In August, President Donald Trump signed an executive order implementing an additional $300 weekly federal unemployment benefit, with the option for states to add $100.
While the program has been approved so far in 40 states, it may last only a few weeks, meaning that unemployed Americans face further uncertainty.
In addition, the likelihood that furloughed or laid-off workers will be able to return to their previous employers continues to fall, according to John Leer, economist at Morning Consult. And, "given limitations in skills and training, it will become increasingly difficult for them to find work in new industries as they did in July and August," said Leer.
Still, the survey showed that Americans did continue to return to work in August faster than they were laid off— 8.6% of workers employed in January were out of work in August, down from 11% in July.
But this is widening a divide in the US labor force, according to Leer. "The US workforce is becoming increasingly divided into two groups: Those who are more confident in keeping their jobs and those who are more pessimistic that they can return to their old ones or cover their expenses as federal jobless benefits decrease or expire," he said.
The survey comes out ahead of the August nonfarm payrolls report, due Friday from the government. The report will provide further information on how the US economic recovery is faring ahead of the November presidential election.
"While a gradual improvement in employment signals a gradual improvement in consumer spending and the economy over the next six to eight months, the political implications of this data from August could reverberate as early as November," said Leer. "The likelihood of a rapid jobs recovery seems like a remote possibility at this point, but gradual improvements in August may be enough to make that case to the American public."
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