Commonwealth’s Financial Resilience Project: COVID Stories, Rapid Insights closely tracks the financial lives of low- and moderate-income households over the course of several months. Our project follows 56 households from 24 states across the US to gain rapid insights in near real-time on how people living on low to moderate incomes (LMI) are navigating the crisis. Read more about the study here.

This week, tens of millions of Americans are set to stop receiving the weekly $600 supplemental unemployment benefit, a temporary provision of the CARES Act, that has been a lifeline to households for the last four months. Unless an extension is urgently approved by Congress, families hit hard by the economic impact of COVID-19 will once again find themselves plunged into uncertainty and volatility. 

Our latest brief, A Tsunami of Volatility: The Impact of the Design and Implementation of CARES Act Supplemental Unemployment Benefits on Lower-Income Households, part of our in-depth research on financial lives during a pandemic, shares a complex picture of the impact of these benefits on lower-income families. While some households increased their income, or simply managed to stay afloat, one significant—and little discussed—outcome was more uncertainty and volatility, caused by the design and implementation of these benefits. 

The dollar amount of these benefits has dominated the debate in Congress and in the media. While some have argued about the incentive effects of these benefits, others, including a recent survey of academic macroeconomists, have said that keeping the payments at $600, or even increasing them, until the economy improves would have positive benefits to households and the economy. As Congress debates an extension, there is an opportunity for both the public sector and private sector financial services institutions to ensure these benefits, no matter the amount, have a more positive impact on lower-income households—and ultimately decrease the volatility households are experiencing.

Read the brief to learn how the implementation of these benefits have impacted households’ financial security, and what this means for the design of the next round of benefits. We also share key recommendations for what federal and state governments, as well as financial services institutions, can do right now, with little additional effort, to support these households.

For media inquiries, please contact Jackie Jusko at jjusko@buildcommonwealth.org or by phone at 216-374-0945.