Unemployment aid not reaching millions of out-of-work Americans, new study suggests
Roughly 3 of every 4 jobless workers aren't receiving unemployment aid
Congressional Democrats are trying to fast-track a nearly $2 trillion coronavirus relief proposal that would extend the existing supplemental unemployment benefits, but new research suggests that the jobless aid is not reaching millions of out-of-work Americans.
At most, just 30% of unemployed individuals are being reached by the unemployment system, according to a report published this week by Eliza Forsythe, a labor economist at the University of Illinois. That means roughly three out of every four jobless workers aren't receiving aid — or about 8 million of the 11 million people counted as unemployed in December.
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"This means that the unemployment insurance system is not reaching the bulk of individuals who are out of work," she wrote.
Forsythe estimated that about 24% of unemployed Americans have received benefits in the last two weeks. Another 4% have been approved for the aid, but have not yet received the money. It's unclear why so many people aren't receiving the aid, Forsythe said. Some Americans may be ineligible, and some may incorrectly believe they don't qualify and therefore don't bother to apply.
"This indicates that the current [unemployment insurance] system is not up to the task of targeting relief to the unemployed," Forsythe wrote. "If the federal government is interested in providing relief to the unemployed, universal checks are likely the best way to provide support to the 70% who are outside of the UI system."
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The report comes as the Biden administration and Democrats flesh out the contours of another massive relief package, which is widely expected to boost federal unemployment benefits to $400 a week through September and send a third stimulus check worth $1,400 to most Americans.
Although President Biden has maintained that the direct payments need to be worth $1,400, he's indicated that he's open to narrowing eligibility for the money in hopes of securing some GOP support.
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One proposal floated by senior Democrats includes lowering the threshold for the payments to begin phasing out above $50,000 for single taxpayers, $75,000 for people who file as the heads of households, and $100,000 for married couples, according to The Washington Post.
"Further targeting means not the size of the check, it means the income level of people who receive the check," White House press secretary Jen Psaki told reporters during a briefing on Wednesday. "That's something that is under discussion."