The end of federal unemployment benefits has left many unsure and scared

The end of federal unemployment benefits has left many unsure and scared

A woman queues outside a temporary unemployment office in Frankfort, Kentucky, in June.

Brian Woolston | Reuters

unemployment benefits in the event of a pandemic

The federal government is extending the safety net for the unemployed to a historic degree last year, as the United States went through the deepest economic recession in its history. The CARES law, passed in March 2020, increased weekly unemployment benefits to $ 600 per week (and later, to $ 300 per week), offering assistance to workers who were generally not eligible for traditional unemployment benefits. ‘State, such as the self-employed, concert workers and part-timers, and increased the length of time that people could collect aid.

Congress extended the programs twice, last December and again in March, but chose not to do so a third time.

That means about 9 million people are expected to lose these benefits by Labor Day, according to an estimate from the Century Foundation. About 3 million more would see their weekly benefits drop.

The family is afraid of what will happen next.

“This is going to leave some people in a bad position,” Sylvia Allegretto, an economist at the University of California at Berkeley and co-chair of the Center on Wage and Employment Dynamics, said of this weekend’s unemployment cliff.

He said: “The economy, for many reasons, has not fully recovered and that is unfortunate, but we are seeing a huge increase in Covid across the country, it won’t be for some time. ”

The delta version put pressure on an already uneven economic recovery. The United States created 235,000 jobs in August, a sharp slowdown from nearly a million in June and July.

Discouraged from working?

Of course, some economists believe the programs should end now, arguing that increased federal benefits are an incentive to stay home rather than look for work. White House officials also recently indicated that federal benefits are expected to end as scheduled in most states.

There was a record 10 million job opportunities in June, which is more than the number of officially unemployed people. This dynamic has led some economists to wonder why jobless people don’t rush to take available jobs.

“It’s hard to justify a program that encourages people not to work while employers struggle to keep their businesses afloat. [going]said Rachel Grezler, economics, budgeting and rights researcher at the Heritage Foundation, a right-wing think tank.

Nearly half of U.S. states, led mostly by Republican governors, withdrew from most or all federal programs in June or July to encourage people to return to the workforce.

“I think that [a] Bad decision, ”said Aaron Davison, an unemployed 28-year-old Orlando resident. “I was grateful for my work.”

Florida ended its federal supplement of $ 300 per week for benefits in June; The rest of the program ends at the end of this week.

Davison, who was a turnstile attendant at Universal Studios Florida theme park, uses unemployment benefits to help his parents, who he lives with and who cannot work due to medical issues. Although he has been actively applying for several weeks, he has yet to receive anything.

Without a job or unemployment benefits, he hopes he can count on the money raised on the GoFundMe page to help him make ends meet.

“[An] The expansion could have saved families from financial ruin, ”Davison said.

Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh urged states with high unemployment rates to continue providing assistance to concert workers and the long-term unemployed using federal funds allocated by the US bailout .

Although there appears to be little to no plan to do so. The US Treasury Department declined to comment. A spokeswoman said the US Department of Labor does not follow state decisions because it does not monitor the use of those federal funds.

Some economists fear that cutting benefits too soon, as people struggle to find jobs, will further slow the economic recovery.

For example, the unemployed were more likely to find jobs in states that ended federal benefits in June, according to a recent article by researchers at Columbia University, Harvard University, University of Massachusetts Amherst and the University of Massachusetts. . from Toronto.

But about 7 out of 8 benefit recipients in those states were still not redeployed by early August, cutting household spending by around $ 2 billion.

Tammy Dotson, 52, had to cut spending after South Carolina officials withdrew federal benefits in June. Dotson, who set up rental homes before the pandemic, is going through a tough time in business, which he personally attributes to work-related fears related to Covid.

“We are struggling to pay our bills,” said Dotson, who was self-employed. “what to say about that [people] Who can’t go back to work, or is something stopping them so they can’t look for work? ” He asked.

factors beyond profit

Factors other than increasing unemployment benefits may play a significant role in preventing many Americans from returning to work, according to labor economists. Some, for example, have reassessed their job flexibility and career after being out of work for months.

Danielle Miss, 30, a former travel agent in Philadelphia, doesn’t want to return to her 9 to 5 job. She plans to rely on self-employment, including home sitting, pet sitting, selling clothes and vacation planning, to pay bills when unemployment benefits run out.

If she can’t earn enough money to cover her expenses this way, she can even drive for Instacart, she said.

“I think I have enough backup to be okay,” she said.

Danielle Miss, 30, decided she didn’t want to return to her traditional day job in the aftermath of the pandemic.

danielle madame

Others may still be on the alert due to persistent public health risks, barriers to childcare, and inadequate wages or benefits, According to To Fiona Gregg, Co-Chair of the JPMorgan Chase Institute.

Chenen Hussey, 42, received unemployment benefits after the pandemic forced her to stop working for her small motivational speaking business in West Bend, Wisconsin. A few months ago, she found part-time work as a mental health counselor for a county government, but her hours are not constant from week to week.

Hussey and her husband are survived by four children, a 6-year-old and three teenage daughters, one of them with an intellectual disability. They fear that they will have to move their child with special needs to a group home if they cannot continue to pay for intensive care out of pocket.

After federal unemployment insurance benefits expire, Chenone Hussey, gone, and her husband worry about supporting their families, including a child with special needs.

engrave the photograph

“We don’t know what we’re going to do,” said Hussey, who co-founded the Wisconsin Unemployment Action Group during the pandemic.

Her husband, a master welder, also lost his job during the pandemic but was able to pull out of state unemployment. Yet their weekly check will drop by $ 300 when benefits expire at the end of this week. According to Hussey, he is applying for jobs, but has yet to find anything suitable.

“Every job he’s applied for has seen his pay cut by $ 20 an hour,” Hussey said. “It’s not worth the shot.

“It would cost our family a lot more than it benefited. ”

Disclosure: NBCUniversal is the parent company of Universal Studios and CNBC.



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