September 9, 2020
How Large Should the Federal Emergency UI Supplement Be to Keep Everyone Out of Poverty?
As Congress debates whether to extend the federal unemployment insurance (UI) supplement, much of the disagreement is over how large the federal supplement should be. In new research, AAF’s Labor Market Policy Data Analyst Isabel Soto calculates how large the federal supplement needs to be to ensure individuals and households remain above the federal poverty threshold.
Her central points:
- This study uses poverty thresholds as the standard of adequacy and examines the implications of varying levels of federal supplemental payments for ensuring that individuals in each of the states exceed the federal poverty threshold;
- Minimum-wage earners are most at risk, but with a $200 weekly UI supplement, all single-person households for whom the earner previously made the minimum wage would exceed the threshold, and with a $400 weekly supplement, families of 4 would not fall below the threshold; and
- Median-wage workers, especially single-person household earners, are less likely to fall into poverty, but to ensure median-wage families of 4 in all states exceed the standard, a $300 a week supplement would be needed.