Unemployment Benefits to End, 7.5 Million Affected

Unemployment Benefits to End, 7.5 Million Affected

(RepublicanDaily.org) – Back in March 2020, then-President Donald Trump signed the CARES Act into law, providing different types of financial relief for those unemployed due to the COVID-19 pandemic. Some benefits have received extensions, but time is running out for millions of beneficiaries.

7.5 Million Fewer People on UI Benefits From Labor Day

According to The Century Foundation, unemployment insurance (UI) benefits arising from the CARES Act will expire for around 7.5 million Americans on Labor Day (September 6). Many people receiving ordinary unemployment insurance will no longer receive the $300 supplement the law provided.

Experts call this single cutoff date a “benefits cliff,” as it will change living circumstances for so many people at once. The shock will reportedly hit people of color and working mothers the hardest. Congress could act to reverse this situation. However, the Biden administration has indicated it wants to stick to the original September 6 deadline.

What Does That Mean?

Policymakers came up with the Labor Day deadline before the surge of the COVID-19 Delta variant. That latest virus strain has slowed America’s emergence from the pandemic, and unemployment figures reflect this. Jobless claims rose this week for the first time in five weeks, though the overall figure remains close to its lowest point since the onset of the pandemic.

However, another economic issue has people wondering whether this loss of benefits might be a good thing. The nation is currently in the grip of a labor shortage. There were over 10 million job openings at the end of June, and businesses across the US have reported difficulties finding workers. When this situation first arose, analysts were blaming the generous benefits people were receiving while unemployed. They speculated the free money was reducing the general appetite for work.

There’s some evidence to support this idea, too. Earlier in the year, 25 states with GOP governors decided to cut the $300 weekly benefits supplement. Now, the emerging evidence suggests these states have made a healthier recovery relative to their pre-pandemic employment levels than their Democratic-led counterparts.

Of course, employment figures aren’t everything. Many Americans will end up falling through the cracks after Labor Day, unable to support themselves because of the pandemic, and no longer entitled to assistance from the government. It looks like Congress will need to figure out how exactly to move forward in a way that benefits both employers and the unemployed.

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