August 18, 2020
Recession’s Hit to Cities Varies Widely
The COVID-19 recession is unlike anything this country has seen.
If the second-quarter contraction were to continue at the same pace for a full year, the economy would shrink by a third! This is the deepest downturn since the Great Depression, and low-income Americans are feeling the brunt of it.
What makes this recession unique, however, is that the low-income people living in the most affluent metropolitan areas are worse off than low-income residents of less affluent cities, Harvard economist Raj Chetty explained during a recent interview on Boston’s public radio station, WBUR.
“What’s going on is that affluent folks have the capacity to self-isolate, to work remotely, to not go on vacation,” he said. “So in affluent areas, you see enormous drops in consumer spending and business revenue.” In these areas, more than half of the lowest-income workers have lost their jobs, and many of them worked in small businesses, he said.
In less affluent cities, people have to go to work and “are out and about more, and business revenue hasn’t fallen nearly as much,” he told his radio host. “In previous recessions, we haven’t seen those sort of patterns.”
Chetty’s point is demonstrated by comparing what happened to consumer spending this year in San Francisco and Fresno, California, on the tracktherecovery.org website he and other economists have created. (Visitors can sort the spending data by state, industry, and consumer income levels, as well as by city.) …Learn More
August 13, 2020
Workers Lacking 401ks Need a Solution
Although COVID-19 has exposed alarming gaps in a health insurance system that revolves around the employer, the Affordable Care Act is one potential solution for workers who lack the employer coverage.
There is nothing equivalent on the retirement side, however.
Many workers between ages 50 and 64 are in jobs that provide neither health insurance nor a retirement savings plan. But, in contrast to the health insurance options available to them, “no retirement saving vehicle appears effective in helping older workers in nontraditional jobs set aside money for retirement,” concluded a new analysis of workers in these nontraditional jobs.
Nontraditional workers who want to save for retirement are left with two options: their spouse’s 401(k) savings plan or an IRA operated by a bank, broker or financial firm.
A spouse’s 401(k) hasn’t been an effective fallback for a couple of reasons. First, a substantial number of the workers who lack their own 401(k)s are not married. And second, if they are married to someone with a 401(k), they’re not any better off. The researcher found that married people currently contributing to 401(k)s do not save more to compensate for the spouse without a 401(k), reinforcing other research showing these couples don’t save enough for two.
The other option – an IRA – is open to everyone. But only a small fraction of Americans currently are saving money in IRAs, and most of them already have a 401(k). So IRAs, in practice, aren’t doing much for the people who need the help: workers who lack employer benefits. … Learn More
May 12, 2020
Estimate Your Unemployment Check Here
Florida’s unemployment office, after denying benefits to some 260,000 residents, said that it made a mistake. From Maine to California, laid-off workers scheme to outfox crashing websites or wait for hours on the phone to apply for benefits at state unemployment offices.
Thirty million people have filed for unemployment benefits so far, and countless others are trying. Frustration is a way of life for millions of people desperately in need of money for essentials.
If you’re curious about how much your benefit will be – when you eventually get through – or if you fear a layoff is in your future, Zippia has something for you.
The job listing and career advice website has created a calculator that will provide a ballpark estimate of your weekly benefit. Just enter your income and the state you live in, and Zippia’s estimate will be calculated using your state’s unique benefit formula.
The estimate is the total of your benefit from the state, which is based on your pay, plus the $600 additional payment Congress recently threw in. These new federal payments are scheduled to expire at the end of July.
The size of the unemployment check roughly corresponds with each state’s cost of living. Nevertheless, the weekly maximum benefits in some states are disproportionately higher, including in Massachusetts, where the maximum is $823 per week, followed by Washington ($790). The lowest maximum benefits are in Arizona ($240) and Mississippi ($235).
“Our goal is to give as much useful information for people who are in a really tough situation,” said Zippia’s Kathy Morris, who was involved in collecting the state data and designing the calculator.
Whatever your state provides to the unemployed, if you’re entitled to a benefit, you should get it. …Learn More