COVID-19 Unemployment Could Jump From 50 Year Low to Great Depression Highs
- Author: Jessica Williams
- Posted: 2024-07-05
As the number of confirmed novel coronavirus cases reported around the world surpasses $1,000,000, the latest proposed stimulus package - phase 3 - could pass $2 trillion. This economic relief plan, called the CARES Act, is the largest stimulus package in history. From being ordered to stay at home to losing their jobs or, in extreme cases their life, not to mention the front-line workers battling the virus first-hand, hardly a single American remains unaffected by this virus.
Record-Breaking Unemployment Drop
Prior to this epidemic, the United States was seeing the lowest unemployment rates in 50 years. February 2020 boasted an unemployment rate of 3.5. This rate has fluctuated between 3.5 and 3.6 since September 2019, which is when we first attained this 50-year low 3.5 unemployment rate. The unemployment rate for March increased to 4.4, which is a rate we haven't seen since 2017, the year the presidency switched and President Trump entered the White House. Experts believe we will be seeing a much sharper rise in April.
NBC reported that the Trump Administration is claiming that we could see a rate as high as 20% before this pandemic ends. The country hasn't seen rates this high since the Great Depression, where the unemployment rate rose to a high of 24.9% in 1933. The St. Louis Federal Reserve Bank President is projecting an even higher rate, up to 30%, a rate we have never previously recorded. The Great Depression was a much more gradual increase. The coronavirus will likely cause the most rapid unemployment increase in history.
With the possibility that we could go from one of the lowest rates in 50 years to the highest in over 80 years within a matter of two months, government leaders have been scrambling to find solutions to Americans. These are being put together in an economic relief plan that includes components such as stimulus payments to individuals, small business loans, and expanded unemployment coverage.
Payments to Individuals: How Much Will You Receive?
The stimulus plan includes direct payments to assist people with bills coming due and necessities while they are unable to work. The amount to be received is based on income. The payment is projected to be:
- $1,200 per adult that makes $75,000.00 or less. For married couples, the amount would aggregate to $150,000.00. You would also receive an additional $500 for every qualifying child under age 17.
- If you make more than these thresholds, you might still receive a portion of these funds. However, if you make above $99,000.00, or $198,000.00 as a married couple, or a family with two children whose income surpasses $218,000.00, then you would not receive this stimulus payment.
- The amount you receive decreases by $5 for every $100 earned after the $75,000.00 threshold, which zeroes out at the $99.000.00 threshold.
These income amounts are based on your 2019 tax return information, or 2018 tax information if you have not filed for 2019 yet. Federal tax return deadlines have also been extended from April 15th to July 15th because of this crisis.
Payments to Individuals: How and When Will You Receive Your Funds?
If you included direct deposit information on your 2018 or 2019 tax returns, your funds will automatically be directed to your bank account. This will be the quickest way to receive your funds. The IRS has said that they will be creating an online system for people to upload their direct deposit information to quickly receive their funds.
Social security recipients who are not typically required to file a tax return will not be required to do so in order to receive their payment. Payments will be directed to their bank accounts. However, some individuals who don't typically need to file may be required to file a simple tax return. The IRS has stated that these payments will begin going out within three weeks. The latest information from the IRS is updated on this website. Continue to check there for updates.
Unemployment Changes
To further assist individuals, changes are being made to unemployment guidelines. These include:
- A 13-week extension
- $600 bump in maximum benefits
- Eligibility expanded, including self-employed individuals who are out of work
Many states have created YouTube videos with step-by-step instructions on how to apply.
Hopefully, these steps will help the many Americans who are out of work while emergency measures continue. There will inevitably be lasting effects from this virus for years to come, but hopefully, with determination, America can rebound quickly and strongly.
