- Around 7.5 million Americans lost their unemployment benefits over the weekend.
- The end of federal pandemic-era unemployment marks one of the biggest fiscal cliffs ever.
- Many workers say it’s too early as Delta rages, but federal and local governments aren’t stepping up.
- See more stories on Insider’s business page.
A least 7.5 million Americans lost all their federal unemployment benefits on Monday as Congress and President Joe Biden allowed key federal initiatives to end. That cut-off is one of the biggest shutdowns of federal benefits in the last 20 years.
Among the programs ending are Pandemic Unemployment Assistance (PUA), which expanded eligibility for benefits to gig workers and self-employed workers among others. Another is Pandemic Emergency Unemployment Compensation (PEUC), which provides benefits after workers have exhausted the weeks their state provides.
Finally, there’s Federal Pandemic Unemployment Compensation (FPUC), which gives workers that additional $300 weekly. As of the week ending August 14, there were 5,413,238 continued claims for PUA, and 3,800,000 for PEUC.
-Joseph Zeballos-Roig (@josephzeballos)
The benefits are ending at a perilous stretch of the pandemic. Cases and hospitalizations from the Delta variant are on the climb, potentially dissuading people from returning to work and heightening concerns among experts about a setback to the economic recovery.
The Biden administration had aimed to quell the pandemic by summer and move forward on its push to revamp American infrastructure with a pair of spending plans. But the emergence of the Delta variant has thrown that off. Hospitalizations among people 50 and under are reaching record highs, according to Julia Raifman, an associate professor at Boston University.
Many unemployed workers who have relied on the benefits as a much-needed lifeline over the last year are worried about their prospects amid the new coronavirus wave.
“Delta is spreading like wildfire,” Lois Prew, a 50-year-old in Massachusetts who had been working as a dishwasher prior to the pandemic, told Insider. She added that unemployment has a disproportionate impact on women, since many have had to leave the workforce to care for children or elders. “With Delta, some schools are going to hybrid learning or other schools are going back to virtual. Everything is just up in the air.”
For Amanda Rinehart, a mother in Pennsylvania, vaccinations are one barrier from returning to work. Her child is high-risk for COVID-19, she previously told Insider, and he’s too young to get vaccinated. That means she’ll continue to supervise his virtual learning – and stay home instead of at the job she loves.
Video: Unemployment Delays Hit Jobless Americans as Aid Expires (QuickTake)
Not every worker will lose all of their benefits right away. Around 10 million are estimated to continue receiving payments, but even they face sharp cuts when the additional $300 weekly supplement ends, the left-leaning People’s Policy Project projects.
“Instead of every two weeks at $1054, I’ll be at like $455, something in that area every two weeks,” Rashed Marshall, a 65-year-old former Uber driver and cancer survivor in Illinois, told Insider. He stopped working in March 2020, when his doctor told him to pause over his health. Now, his benefits will be slashed by about half. “That half is going to hurt.”
He added: “With that extra money, I’ve been able to live, not just survive, but just live just a little bit.” Marshall isn’t alone in that sentiment: The beefed-up benefits have allowed some Americans to change their lives for the better, whether that’s returning to school, or starting their own businesses.
Lawmakers in Congress aren’t likely to renew the programs anytime soon. Republicans are staunchly opposed to the beefed-up payments, arguing it’s keeping people from seeking out jobs.
But emerging research indicates it’s a smaller factor compared to the impact of school closures or lack of childcare. And some unemployed workers-turned-activists argue that the widespread adoption of benefits merits both an extension and permanent reform.
Now, though, the experiment with a strong safety net and a higher wage economy is coming to an end.
President Joe Biden said in early June it “makes sense” for the bulked-up federal payments to end in September after a robust jobs report; that comes just months after the president said the solution to the labor shortage was to “pay them more.”
The Biden administration recently encouraged states to tap into leftover stimulus money from the $1.9 trillion rescue plan to continue unemployment payments, but there’s no indication any will extend the benefits on their own. White House press secretary Jen Psaki said Biden wasn’t going to prod lawmakers to back an extension, citing the economic rebound.
“I’m very, very angry because this is an attempt, in my opinion, to force us all back to work in low paying jobs, like in hospitality and retail, where people are treated like garbage by customers and by the companies they work for, where their work schedules change at the very last minute,” Prew said. “It’s incredibly difficult for parents to find care at the last minute for their children.”