Come September, 20 million Americans will lose their unemployment insurance benefits that were given to them under the American Rescue Plan Act.
While many millions of Americans who lived in red, GOP-run states were already cut off from their enhanced unemployment over the summer as lawmakers feigned concern about people not wanting to return to work because they were comfortably living on the government dole, in Democrat-led states, the enhanced federal unemployment insurance is still running. But in just a matter of months, that unemployment insurance will end. And the effects will be disastrous.
By now, some 26 states have cut unemployment benefits, saying that they were doing so to ensure that workers needed to be incentivized to re-enter the workforce, and that the extra UI they were getting was stopping them from doing so.
Though factually dubious, the claims that the extra $300 per week that people were getting while unemployed during the pandemic (which is, in case you forgot, still ongoing) from the federal government, that was not coming out of state budgets at all, led to an onslaught of governors ending the benefit to people who needed the help most. Those same states also cut the Pandemic Unemployment Assistance program (PUA) which helped self-employed individuals or gig workers to receive unemployment insurance when they were not eligible for it before, as well as the Pandemic Emergency Unemployment Compensation program, unemployment insurance meant to help the long-term unemployed.
And in fact, previous writing from Fatherly noted that despite the best efforts of the GOP, kicking people off of unemployment did nothing but harm them. “[Kicking people off of UI did not translate] into most of these individuals having jobs in the first 2-3 weeks following expiration. However, there is evidence that the reduced UI benefits increased self-reported hardship in paying for regular expenses,” UMass Amherst’s Arindrajit Dube said.
In other words, people didn’t quickly find jobs when they got kicked off of unemployment, and instead, simply struggled to make do where the $300 was helping them get by. Come September, many more millions of American workers may be in the same boat. With 46,000 kids without parents, and eviction risks rising, the lack of help could be terrible.
Ultimately, the reality is that there are still high rates of unemployment, that for parents who have children, the problem of finding safe, adequate child care has not been resolved, and that for many people, the risks of work as a pandemic still rages on is a tough calculation to make. A June jobs report did show that, while jobs are growing across the country, the unemployment rate still ticked up to 5.9 percent.
And those who are struggling to find work look different across racial lines, per Brookings. In June, Black workers had the highest unemployment rate at 9.2 percent, whereas Latino and Hispanic workers were experiencing unemployment at 7.4 percent. Asian-American and White workers had a 5.8 percent and 5.2 percent unemployment rate, respectively.
The number of people who are not in the labor force, but want a job, is still at 6.4 million people, per June numbers. With 20 million people set to lose their unemployment insurance entirely, or at least have it drastically cut, by September, that number could very likely grow.
And as long as transportation issues, child care problems, concerns about the danger of bringing COVID-19 home to persist, and as long as low-wage jobs flood the market, many people may struggle to find work that makes sense for them and their families.
In the meantime, working people, those who can’t be working people, and those who want to be working people but can’t find work, will likely suffer.