There
is
heightened
anxiety,
even
within
the
White
House,
that
pulling
so many
people
off
government
support
so
abruptly
could
push
millions
of
people
into
poverty
and cut
off
access
to food
or
nutrition
for
people
caught
on the
wrong
side of
this
uneven
economy.
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There
is
heightened
anxiety,
even
within
the
White
House,
that
pulling
so many
people
off
government
support
so
abruptly
could
push
millions
of
people
into
poverty
and cut
off
access
to food
or
nutrition
for
people
caught
on the
wrong
side of
this
uneven
economy.
(ShuttetStock
Image) |
|
Millions
lose
jobless
benefits
as
federal
aid
expires,
families
and
economy
face
uncertain
path
By
Yeganeh
Torbati,
Andrew
Van Dam,
Alyssa
Fowersand
reuters.com
WASHINGTON
-
The
cessation
of this
jobless
aid,
first
put in
place by
Congress
nearly
18
months
ago,
could
upend
the
lives of
millions
of
Americans
still
struggling
to find
work at
a time
when the
pandemic’s
delta
variant
is
wreaking
fresh
havoc
across a
number
of
states.
It could
also
lead to
a sharp
pullback
in
spending,
particularly
in
certain
areas of
the
country,
impacting
a wide
range of
restaurants
and
other
businesses
that
rely on
consumer
dollars.
“I don’t
understand
how
anyone
in
Washington
cannot
know
normal
people,
their
friends,
families,
cousins
who are
going
through
this,”
said
Kathleen
Fox, a
producer
in New
York
whose
past
work has
been
recognized
with a
prestigious
Peabody
Award
but who
has
struggled
to find
work
after
the
pandemic
upended
her
industry.
“The
[Biden]
administration
has lost
interest
in this
cause
and
they’ve
moved on
to other
things.”
The
White
House
has
wrestled
with how
to deal
with
these
expiring
benefits,
an
internal
debate
that
exposes
the
fraught
political
and
economic
consequences
of
inaction.
President
Biden
said in
June
that it
“makes
sense”
for one
of the
programs,
which
boosted
unemployment
checks
by $300
each
week, to
lapse in
September,
but
senior
aides
have
also
called
on
states
to
reallocate
other
money in
a way
that
would
continue
offering
some
support.
No
states
appear
inclined
to take
action,
though,
leading
to this
week’s
sudden
cutoff.
Now
there is
heightened
anxiety,
even
within
the
White
House,
that
pulling
so many
people
off
government
support
so
abruptly
could
push
millions
of
people
into
poverty
and cut
off
access
to food
or
nutrition
for
people
caught
on the
wrong
side of
this
uneven
economy.
The
jobless
rate has
fallen
and the
stock
market
is near
record
levels,
but many
Americans
have
found
themselves
unable
to
recover
from the
pandemic’s
devastating
blow.
“I’m
predicting
a silent
type of
pain,”
said
Andrew
Stettner,
a senior
fellow
at the
Century
Foundation
think
tank and
an
expert
on
unemployment
insurance,
who has
estimated
that
some 7.5
million
people
will be
cut off
from aid
on the
programs’
expiration
date.
“If past
periods
have
been an
indicator,
many
will be
caught
in a
spiral
that
will
lead to
a
downward
quality
of
life.”
The
programs
initially
boosted
jobless
benefits
by $600
a week
before
Congress
lowered
the
amount
to $300
a week.
They
also
expanded
the pool
of
workers
eligible
for
government
aid and
increased
the
number
of weeks
workers
could
draw on
unemployment
insurance.
But this
assistance
has also
emerged
as a
divisive
flash
point in
a
political
debate
over
whether
government
assistance
discourages
people
from
returning
to work.
Republicans
and
numerous
business
groups
have
argued
the
extra
benefits
were
contributing
to a
labor
shortage
and
slowing
the
economic
recovery,
alleging
it had
become
too
lucrative
for
people
to stay
home
rather
than get
a job.
They
have
called
for
investigations
of fraud
in the
programs,
alleging
hundreds
of
billions
of
dollars
in
unemployment
aid may
have
been
stolen.
Many
Americans
who are
frightened
about
the
sudden
lack of
income
feel
they
have
been
unfairly
swept up
in a
bitter
political
debate.
“It just
feels
like
being
discarded,”
said
Fox, who
was set
to see
her new
projects
premiere
at major
festivals
in 2020
before
the
coronavirus
devastated
those
plans.
Now, she
applies
for
around
three
jobs per
day,
including
ones
where
she
would
make far
less
money
than in
her last
full-time
position
at an
advertising
agency,
all to
no
avail.
If she
is
unable
to find
a job
after
losing
her
benefits,
she
faces
the
prospect
of being
forced
to sell
her
apartment.
“The
stress
of
everything
has just
caused
me a lot
of
emotional
distress
that I
didn’t
have
before,”
she
said.
Over the
summer,
26
states
announced
they
would
end
these
benefits
early,
providing
a
glimpse
of what
millions
of other
Americans
will now
face.
Since
then,
economists
have
studied
data on
job
gains
and
spending
to see
how
local
economies
have
reacted
to the
withdrawal
of
benefits
amid a
pandemic,
and to
determine
whether
the
extra
aid was
holding
back job
growth.
Their
conclusions
are
ominous:
one
study
found
that for
every
eight
workers
who lost
benefits,
just one
managed
to find
a new
job, and
found a
dramatic
reduction
in
spending,
suggesting
the
people
who lost
benefits
were
left in
a
precarious
financial
situation.
The
cutoff
marks
the end
of a
colossal
spigot
of
stimulus
funds.
About
$680
billion
in
emergency
unemployment
benefits
have
been
distributed
since
March
2020,
making
it one
of the
biggest
coroanvirus-era
assistance
programs,
just
behind
the
Paycheck
Protection
Program
($835
billion),
according
to the
nonpartisan
Committee
for a
Responsible
Federal
Budget.
The
emergency
jobless
aid was
first
approved
in the
spring
of 2020
when the
economy
appeared
to be in
free-fall
and
close to
1
million
Americans
were
losing
their
jobs
each
day. It
was
designed
to be
temporary
because
of its
cost and
because
lawmakers
assumed
the
pandemic
wouldn’t
last
long.
When
they
designed
the aid
package
last
year,
lawmakers
created
a new
type of
unemployment
aid
called
Pandemic
Unemployment
Assistance,
which
covers
workers
who
normally
wouldn’t
qualify
for
unemployment
insurance,
such as
gig
workers,
caretakers
and the
self-employed.
Those
workers
tend to
be
younger
and
lower-income
than
those
who
received
benefits
from
standard
unemployment
insurance,
according
to a
recent
JPMorgan
Chase
study of
banking
transactions.
The
expiration
of that
program
this
week
means
these
workers
— who
make up
about 40
percent
of all
UI
claims
during
the
pandemic
— will
no
longer
be
eligible
for any
unemployment
insurance
programs.
“I worry
that
we’re
pinning
heavy
hopes on
the
economic
upside
of
turning
off
these
benefits
when
these
benefits
weren’t
the
primary
factor
holding
people
back
from
returning
to work,
and
they’re
also
providing
an
important
boost to
spending,”
said
Fiona
Greig,
co-president
of the
JPMorgan
Chase
Institute.
Recent
research
by
academic
scholars
found
that in
states
that cut
benefits
early,
every
dollar
lost in
benefits
was
offset
by about
7 cents
in
increased
earnings.
That
means
the
Labor
Day
weekend
cuts
could
cause
“something
like $8
billion
in
reduced
spending
during
September
and
October,”
said
Arindrajit
Dube, an
economist
at the
University
of
Massachusetts
at
Amherst
and one
of the
researchers
who
analyzed
the
effect
of the
early
benefits
cutoffs.
Michael
Strain,
director
of
economic
policy
studies
at the
American
Enterprise
Institute,
cautioned
that
more
months
of data
are
needed
to make
firm
conclusions
about
the
effect
of the
programs
on the
labor
market.
He said
he would
have
preferred
for the
jobless
aid to
phase
out over
several
months
rather
than
come to
an
abrupt
end, but
that
overall
it is
time for
the
unemployment
benefits
to
“normalize.”
“The
unemployment
rate is
falling,
not
rising,”
Strain
said.
“Workers
clearly
are on
the
whole
going to
go out
and get
jobs.”
It is
still
unclear
whether
businesses
struggling
with
labor
shortages
will
find it
easier
to hire
workers
in the
coming
weeks,
even as
the
benefits
end.
Argosy
Cruises,
a
company
offering
boat
tours in
the
Seattle
area,
had a
pre-pandemic
head
count of
around
250
people,
before
it was
forced
to lay
off 85
percent
of its
staff in
August
2020,
said
chief
operating
officer
Molly
Schlobohm.
The
company
gradually
relaunched
in
April,
and
hiring
has been
“incredibly
challenging,”
she
said,
despite
wage
increases
and
signing
bonuses.
But even
as the
cut in
benefits
looms
over the
state’s
jobless,
Argosy
has seen
no
recent
change
in
application
numbers,
Schlobohm
said.
“I don’t
really
think
that the
extended
unemployment
benefits
are the
sole
reason
for the
labor
shortage,”
she
said.
“I’m
seeing
and
hearing
from
candidates
and
employees
that
affordable,
quality
child
care is
more of
an
issue,”
she
said,
along
with
affordable
housing
in the
Seattle
area.
Lisa
Lunsford,
co-founder
of an
automotive
manufacturing
firm in
Livonia,
Mich.,
said her
company
has
around
20
immediate
job
openings,
and has
received
a steady
stream
of
applications
for
those
jobs
since
July,
with no
noticeable
uptick
in
recent
weeks as
the
benefits
cliff
approached.
“I don’t
think
it’s
just
that
simple.
There
are so
many
things
that are
going
on,”
Lunsford
said.
Some
people
are
still
afraid
to come
into the
workplace,
for
instance,
and the
company
has
tried to
be
flexible
in
creating
work
arrangements
that
meet
their
needs,
she
said.
Last
month,
the
Biden
administration
gave
states a
potential
path to
helping
people
who were
about to
lose
benefits:
they
could
use
funds
provided
to
states
in a
March
stimulus
law, the
American
Rescue
Plan
Act, to
fill in
for some
of the
lost
aid.
The
Washington
Post
asked
officials
in 24
states
and D.
C. — the
jurisdictions
that had
continued
the
federal
benefits
as long
as
possible
—
whether
they
plan to
extend
the
benefits
using
the ARPA
funds.
Of those
who
responded,
nearly
all said
they had
no such
plans,
or
indicated
that a
decision
to do so
rested
with
their
state
legislatures.
“This
gives
states
express
‘permission’
to use
the
funds we
already
have,
but
there
are too
many
unaddressed
issues
for many
to
continue
to offer
pandemic
unemployment
assistance
beyond
the week
of Sept.
6,” said
Mike
Faulk, a
spokesman
for
Washington
state
Gov. Jay
Inslee
(D), in
an email
on Aug.
25.
“There’s
not much
ARPA
left and
a high
cost to
maintain
weekly
benefits.”
A
spokesman
for the
U.S.
Department
of
Labor,
Egan
Reich,
said
states
do not
need to
tell the
administration
if they
want to
disburse
ARPA
funds to
unemployed
workers,
so the
agency
does not
have a
list of
states
that may
be doing
so.
Workers
still
depending
on the
benefits
described
numerous
obstacles
to
finding
work,
including
industries
that had
not
fully
staffed
back up
to
pre-pandemic
levels
and fear
of
contracting
the
delta
variant.
Lauren
Bailey,
of
Silver
Spring,
Md., was
earning
money as
an Uber
driver
when the
pandemic
hit. She
has
underlying
health
problems,
so she
stopped
driving
in March
2020 and
applied
for
unemployment
benefits,
and was
able to
cover
her
costs as
long as
they
were in
place.
When the
federal
benefits
expire,
she will
be
ineligible
for
state
aid
because
gig
workers
do not
traditionally
qualify.
Bailey,
51, has
a
bachelor’s
degree
from
Smith
College
and a
master’s
degree
from
Howard
University.
She is a
Black
woman —
a
demographic
that
faced an
unemployment
rate of
8.6
percent
in
August,
significantly
higher
than the
comparable
national
rate of
5.1
percent.
She has
been
applying
for
positions
in
social
media
management,
in
marketing
or as a
virtual
assistant,
and has
had
interviews
every
month,
though
they
have yet
to
result
in a
job. She
is fully
vaccinated,
but
fears a
breakthrough
infection
and
would
prefer
to work
from
home.
“I’m not
afraid
of
death,”
Bailey
said.
“I’m
more
afraid
of long
covid,”
she
added,
referring
to the
prospect
of weeks
or even
months
of
lingering
illness
after
being
infected
by the
virus.
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