Beginning this weekend, millions of Americans will lose extra unemployment assistance benefits. The federal programs that issued added benefits to jobless workers during the pandemic will expire later this week.
RELATED: 50% of States To End $300 Unemployment Benefits Early
Federal Unemployment Assistance Programs End This Week
During the start of the pandemic, the US Congress voted to provide additional unemployment assistance to millions of jobless Americans.
The coronavirus shut down businesses and retail outlets during its first few weeks. Additional jobless benefits helped manage the effects of a stalled economy.
As the pandemic has yet to indicate a realistic ending, Congress extended the unemployment assistance programs. In some cases, lawmakers expanded the eligibility to include more jobless Americans. They also raised the money given weekly.
8.8 Million Americans Will Lose Federal Unemployment Assistance
However, Congress now seems uninterested in extending jobless benefits. As a result, these programs will expire this weekend. Lawmakers are less likely to propose extensions at this point. Last few months, the US reported improvements in the economy. The job market is also reporting rising demand for workers.
According to estimates from progressive think tank The Century Foundation, around 8.8 million Americans will lose their benefits entirely. Meanwhile, another 3 million American workers will find their weekly aid reduced by $300 per week.
Consequently, unemployed workers will have to settle for an average of $321 jobless benefits a week. This is equivalent to about 38% of their pre-playoff wage, per Labor Department data.
Recurring Problem During American Recessions
Till von Wachter, an economics professor at UCLA and director of the California Policy Lab, thinks the cut might be too early. “We’re cutting benefits off when many, many individuals are still relying on them.
This is sort of a recurring problem in American recessions. We ask politicians to come up with benefit programs, and they set to end and start dates. They’re set in advance and have nothing to do with how the economy is,” he observed.
In this case, the White House supports the scheduled ending of the $300 additional jobless payments. Officials pointed out that the US job market adds an average of 832,000 new jobs every month since June.
From a high of 14.8% in April 2020, unemployment is not at a manageable level of 5.4%. This is evidence that the US economy is in recovery mode.
Biden Administrations Urges States With Funds To Continue Issuing Unemployment Assistance
However, the federal government continues to urge states with unspent pandemic funds to continue giving out jobless benefits. President Joe Biden’s administration called on state governments to continue helping certain unemployed groups.
This includes long-term unemployed workers such as independent contractors. These workers usually do not qualify for traditional and state unemployment benefits.
However, individual states have yet to indicate if they plan to comply. The Labor Department has no way of knowing if the state did so. Fund usage is not part of the department’s mandate and oversight, according to a Labor spokesperson.
Some States Already Ended Federal Unemployment Assistance
Around 26 states decided to terminate the extra federal jobless benefits way before their Labor Day cutoff. The mostly Republican states said that extra money kept workers from actively seeking jobs while the program was in effect.
This made it harder for the state’s economic programs to take off, as companies lacked enough workers.
In addition, officials said that generous benefits also attracted an increased number of criminals. Rachel Greszler, a research fellow at the rightist Heritage Foundation, said that federal unemployment made things worse.
“These groups went in after the funds using a number of fraudulent practices. Between massive fraud and worker shortages, expanded unemployment insurance benefits have arguably been the federal government’s most flawed, and damaging, an economic policy enacted in response to Covid-19,” she said.
Watch the CBS News video reporting that Americans will lose unemployment benefits after Labor Day:
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