When COVID arrived and the solution to slow down or try to stop the pandemic was to social distance, this meant parts of the economy had to be shut down. The biggest parts of the economy was the travel. hospitality and entertainment. We were all told to stay closer to our homes and if possible work from there. It has been a credit to thousands of companies that work from home can and does take place. For those who companies shut down, the stimulus package gave a $600 a week jobless benefit. The package ended and Congress has been negotiating for a new package. The President wanted to give something, so he signed an Executive Order for $300 from the federal government and some from the state government (understanding many states are running record deficits, they did not sign on).
In an article by Christopher Rugaber and Leah Willingham of Reuters, they examined the details of the Executive Order. The $300 the President signed comes with a host of restrictions and bureaucratic hurdles which means more than 1 million people will receive nothing.
Across the US minimum wage is low and there is a threshold to receive the $300, the jobless must be receiving more than $100 in state benefits to qualify. In addition, the person who is jobless must certify the reason why they are jobless is because of the coronavirus.
Eliza Forsythe an economist at the University of Illinois calculates at least 6% of the people receiving state aid or 840,000 Americans will not qualify for the $300 federal benefit because they earned too little. If people were working in the gig or were on contract, they will not qualify.
Some states are raising their minimums up to $100, so all qualify for the $300. However in states such as Mississippi the minimum payment is $30, Nevada is $16 and Connecticut is $15. The concern is how long will the benefits need to be paid?
Linking to dividend paying stocks, if you own these the idea is the income allows you to top up your other income or you can live off your dividends. For those with limited options, the politicians often present shiny new objects to the public, but similar to most government programs the details or how the program is implement is key. If you have dividend income, that is wonderful but understand the system is not fair to everyone and the COVID has shown many warts in the system. Will they or should they be changed? do not know, but understanding tends to be the start.
There are more questions than answers, till the next time – to raising questions.