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New Analysis: Workers Who Were Most Impacted By COVID-19 Shutdowns Will Also Be Most Impacted if $600 FPUC is Not Extended

Sacramento, July 27, 2020 — Amid congressional debates about whether or not to extend or modify the Federal Pandemic Unemployment Compensation Program, a new Data Point from the California Policy Lab at UCLA focuses on how the extra $600 payment has helped keep California workers financially afloat during the COVID-19 pandemic.

“For more than half the Californians receiving unemployment benefits, that extra $600 has boosted their benefit amounts above the threshold for ‘Very Low Income’,” explains Till von Wachter, a co-author of the analysis, UCLA economics professor and faculty director at the California Policy Lab. “Given the low benefit amounts for those particularly hard hit by the current crisis, reducing this amount to $200 could put a lot of unemployed people into serious financial difficulties.”

Key Research Findings:

1) FPUC payments injected $26 billion into California’s economy since late March
Forty-four million FPUC payments have been made to Californian recipients from the start of the program to late June, totaling $26 billion. Because lower-income workers have been the most impacted by job losses during this pandemic, it’s likely most of these benefits have helped support the state’s economy as these workers used this money to pay for necessary household expenses like food and rent.

2) Without the $600 FPUC payment, California’s median unemployment insurance benefit amount will drop down to $339 per week.
In comparison, California’s Median Family Income is $86,165, on a weekly basis, that equals $1,657. Without the FPUC payment, the median payment of $339 would be less than a quarter of California’s Median Family Income.

3) The average actual payment in California without FPUC is $270.
While each UI claimant is assigned a Weekly Benefit Amount (WBA) based on their prior earnings when they file their claim, for claimants who report income from part-time work, their benefit payment is reduced accordingly, and they receive a payment less than their WBA. When looking at actual payments received while FPUC has been in effect, the average actual payment was $270, the difference arising to some claimants receiving reduced payments because they are working, incomplete certifications, or payments deemed ineligible for other reasons.

Average actual benefit amounts are even lower for the workers who have been most impacted by the COVID-19 pandemic, including women workers ($253); young workers aged 20-24 ($215), Black workers ($255) and Asian workers ($263). See the Data Point for a table with demographic breakdowns.

4) Most impacted: Women workers, Black workers, younger workers, and lower-educated workers.
These groups have been hardest hit by COVID-19 related layoffs and will be most harmed if the $600 extension is not renewed or is reduced.

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