NEW YORK: Millions of unemployed Americans lost their unemployment benefits on Monday, leaving only an economic aid program for those still being hit financially by the one-and-a-half-year-old coronavirus pandemic.
Two important events ended on Monday. Unemployed assistance was provided to the self-employed and gig workers and others provided benefits to those who have been unemployed for more than six months. In addition, the Biden administration’s $300 weekly supplemental unemployment benefit also expired on Monday.
It is estimated that approximately 8.9 million Americans will lose all or some of these benefits.
While the White House has encouraged states to pay out $300 weekly benefits using money from stimulus bills, no state has chosen to do so. Several states opted out of the federal program early after some businesses complained they didn’t get to hire enough people. Data has shown minimal economic benefits from early discontinuing aid in those states.
JPMorgan economists Peter McCrory and Daniel Silver found zero correlation between job growth and state decisions to drop federal unemployment aid, at least for now. Kyle Combs, an economist at Columbia University, found only minimal gains.
The amount the federal government has injected into jobless benefits since the pandemic began is nothing short of astronomical. According to the Nonpartisan Committee for a Responsible Federal Budget, roughly $650 billion kept millions of Americans who lost their jobs through no fault of their own in their apartments, paid for food and gasoline, and lost their jobs. Bills maintained. The banking industry has largely attributed some defaults on loans in the last 18 months to the government’s relief efforts.
Andrew Stetner of the Century Foundation said in a report that the end of pandemic unemployment benefits would be a sudden blow to millions of Americans who would not find jobs in time for this arbitrary aid.
These programs end when the US economy has recovered from the pandemic, but with a substantial lag in recovery. The Labor Department says there are still 5.7 million fewer jobs than before the pandemic.
These gains are also eroding quickly compared to the previous crisis, the Great Recession. In that recession, jobless benefits in various forms were extended from the start of the recession in 2008-2009 all the way through to 2013. When those benefits eventually ended, only 1.3 million people were still receiving aid.
Americans still struggling financially in the pandemic will receive a small patchwork of social assistance programs at the state level and through the federal government.
The White House last month approved a 25% increase in food stamp assistance, also known as SNAP benefits. This increase will continue indefinitely for the 42.7 million Americans who receive those payments.
While the federal eviction moratorium has expired, nearly a dozen states controlled by Democrats have extended their moratoriums, including California, New York, Washington, Illinois and Minnesota. The New York eviction moratorium was extended to January 15.
The Biden administration insisted on restarting federal student loan repayments by January. which were to be resumed this month.
Those unemployed under six months old will still be able to receive their benefits, but the amount will drop to the level that each state pays. According to the Center on Budget and Policy Priorities, the average weekly check is about $387, but varies greatly by state.
But neither of these programs will have the flexibility or direct impact because unemployment benefits are being paid directly to unemployed Americans, wrote economists McCrory and Silver at JPMorgan. They say that loss of benefits can lead to job losses that could potentially offset any job gains made as the economy improves.
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AP Economic Writers Chris Ragber and Paul Wiseman contributed to this Washington report.
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