Unemployment Benefits Over for 7.5 Million Workers

An unprecedented 7.5 million workers lost sorely needed income overnight.

In an ironic celebration of Labor Day, the Biden administration has allowed the federal unemployment insurance benefits prompted by the pandemic to expire.

The move takes away sorely needed income from a staggering 7.5 million workers, per an analysis by the progressive Century Foundation. Self-employed and gig workers who aren’t eligible for any other unemployment compensation and workers who exhausted (or received paltry) state unemployment aid are now officially on their own.

Millions more would be losing their benefits if they didn’t live in states with Republican governors who had previously opted out of federal benefits in the name of curing “labor shortages,” but the end of these programs still represents the single greatest unemployment insurance cliff in history.

The Century Foundation also reports that black workers whose unemployment rate is 9.2 percent (much higher than the overall rate of 5.2 percent) will be particularly harmed by the cutoff. And the caregivers, predominantly women, who left the workforce to take care of their kids and tend to family members with COVID, are losing the only government aid they are eligible to receive.

The unceremonious end to these programs comes at a disastrous time. There were 160 percent more people hospitalized yesterday than there were on Labor Day 2020. A record-high number of people under 50, over 26,000, were admitted to American hospitals last week. Forty-seven percent of Americans are not fully vaccinated, a figure that does not even include kids under 12 who are not yet eligible for any of the COVID-19 vaccines.

After nearly eight months full of surprisingly bold policy proposals, the Biden administration has allowed a basic lifeline to disappear at a time when American workers still need the help. After all, it’s not as easy as getting a job.

There are factors like the difficulty of securing child care and the fear of contracting COVID-19 in unsafe working environments. The available evidence suggests that unemployment benefits weren’t what was keeping people out of the workforce. Some reporting has suggested that over a million people on unemployment were unable to get work because of a pandemic-related obstacle, and people are still losing work due to COVID by the hundreds of thousands. The aid is still necessary.

Labor Department data show that those states that ended benefits early had job growth similar to, or slightly slower than, those that did not. The most extensive study to date found that the wages from new jobs in those states likely amounted to just five percent of the income lost by ending the federal benefits.

In the meantime, millions of workers will continue to fall through the cracks. Cutting benefits means taking substantial sums of money out of workers pockets, money that they can no longer spend and that will no longer contribute to the nation’s economic recovery. It’s the kind of move that seems fiscally responsible on its face, but it’s actually just the latest in a long line of policies that are counterproductive to the goal of economic recovery.