Unemployment hit the global job market hard. For some workers, though, the unemployment benefits proved to be a rather convenient alternative. Unemployment insurance benefits kicked in for the unemployed that had secured an insurance plan before the pandemic outburst. Those who didn't have a strategy could qualify as eligible for Pandemic Unemployment Assistance (PUA).
The federal government was fast to support insurance companies as more people continued to lose their jobs. To receive assistance, workers needed to file a claim at one of the unemployment offices and benefit from up to 79 weeks of unemployment benefits in case of approval. The payments guaranteed by law were minimal for the first week and typically increased after the applicants' wages were verified. For lower-income households, eligibility for Unemployment Assistance meant a more decent temporary income without negotiating with their employers. When the workforce finds it more convenient to live off benefits and financial aid programs, it makes one wonder how well-structured and organized our systems are.
The Federal Reserve injected up to $2.3 trillion as loans into the economy to redress the crisis. The federal pandemic unemployment compensation plan offered extended benefits for jobless workers. As a result, statistics show a significant decrease in the number of loans taken during the pandemic. Could that mean that American citizens didn't experience any money shortage? According to Forbes, that's not the case. There were fewer eligible workers to qualify for loans, especially when most financial institutions added more restrictions.
Without as many job-related expenses, like commuting and attending events, the unemployed would collect benefits and manage their budgets more responsibly. Claiming benefits also meant submitting the mandatory fixed payment on a loaner's active debt. More Americans reportedly took loans to consolidate other debts and do home renovations, which makes sense. Regular unemployment insurance benefits could be used to cover loans taken for unexpected expenses, mainly for medical bills. Families with children were more likely to take on more debt for emergencies.
Making abstraction of the flaws in the unemployment insurance system, unemployment benefits helped American families cope with the unexpected. Did the recent economic downturns make us more responsible towards our spendings? Will some unemployed workers expect additional unemployment insurance and benefits granted through federal law? Stay tuned, we’ll throw in more updates.