The Impact of Extending Unemployment Insurance Benefits in California

Over one million Californians to lose unemployment benefits by end of the year Under the CARES Act, Congress created two federal unemployment programs, Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC). However, these two programs are slated to expire on December 26th, 2020 unless Congress passes new legislation to extend them. If Congress is unable to pass such legislation, our latest projections find that over one million Californians will stop receiving unemployment insurance benefits by the end of 2020, despite remaining unemployed.1 This Data Point analyzes the bi-partisan Emergency COVID Relief Act of 2020 that would extend the PUA and PEUC programs by 16 weeks (through April 17th) while also extending the maximum length a person could receive benefits under these programs.2 We show this proposal would be extremely effective in reducing the incidence of benefit exhaustion, reducing the number of claimants who stop receiving benefits before April 10th by 95%. This new proposal would provide $30 billion in direct payments to unemployed Californians by mid-April, with indirect benefits spilling over to business owners and the wider labor market.