Oregon Unemployed Full Time Worker at $43K Annual Wage Could Receive Up to 97% of Wages for 39 Weeks; GIG Worker at Same Wage Could Receive 64%.

Last week I did a post HERE that compared CARES act unemployment benefits to wages for minimum wage workers in the Portland metro area. My conclusion was that these workers would receive more in unemployment benefits than wages over a 39 week benefit period. 

I thought it would be interesting to see how unemployment benefits over that same 39 week period would compare for workers who earned an amount that would reach the maximum weekly base benefit of $538.  

Scenario 1.  Full Time Worker At Annual Wage ($42,345) That Produces Maximum Weekly Unemployment Benefit.

SUMMARY Over 39 Weeks a Full Time Worker Earning a Gross of $42,345 Annually Could Receive Unemployment Benefits that Equal 97% of the Gross Wages That They Would Have Earned Over a 39 Week Period. (See Table pasted below; details of calculations are shown below table). [NOTE: HUD Portland metro FY 2020 50% 3 person median income limit is $41,450]

Details

1. The base unemployment benefit is 1.25% of earnings with a maximum benefit of $538.
2. The maximum base benefit is reached when a full time year around worker has earned $43,040.  
3. Adding to that $538 a week ($20,982 over 39 weeks) is the $600 CARES act bonus for 17 weeks ($10,200).
4. So the total unemployment benefit is $31,182 over 39 weeks. 
5. This compares to the $32,280 that the worker would have earned for 39 weeks ($43,040 X .75% [39/52=75%] = $32,280.
6. Bottom line, the combined gross base and supplemental unemployment benefits replace 97% of gross wages that would have been earned over a 39 week period. 

Scenario 2.  Full Time GIG Worker At Annual Wage ($42,345) That Produces Maximum Weekly Unemployment Benefit.

SUMMARY Over 39 Weeks a Full Time GIG Worker Earning a Gross of $42,345 Annually Could Receive Unemployment Benefits that Equal 64% of the Gross Wages That They Would Have Earned Over a 39 Week Period. (See Table pasted below; details of calculation are shown below the table).[NOTE: HUD Portland metro FY 2020 50% 3 person median income limit is $41,450]

Details

1. The CARES act makes GIG workers eligible for a reduced level of base unemployment insurance even though they did not pay unemployment taxes.
2. The base unemployment benefit is 1.25% of earnings with a maximum benefit of $538. GIG workers are however ONLY eligible for HALF of the base benefit, or $269.
3. The maximum base benefit is reached when a full time year around worker has earned $43,040.  
4. Added to that $269 a week ($10,491 over 39 weeks )in base UI benefits for the GIG worker at this wage level is the the FULL $600 weekly CARES act unemployment bonus for 17 weeks ($10,200 for the 17 weeks).
5. So, the total unemployment benefit for the GIG worker is $20,691 over 39 weeks. 
6. This compares to the $32,280 that the worker would have earned for 39 weeks ($42,345 X .75% [39/52=75%] = $32,280
7. Bottom line, the combined gross base and supplemental unemployment benefits  of $20,691 replaces 64% of the gross wages that the GIG worker would have earned over a 39 week period ($32,280).

NOTE:

1. Workers don't choose whether to be unemployed, the employer does.
2. Unemployed workers may lose employer provided health care and other benefits.
3. Unemployment income doesn't count as earned income for the earned income tax credit
4. Changes in income may impact other eligibility and the amount of other benefit programs and also income tax obligations.

Originally created and posted on the Oregon Housing Blog.