The Covid Economy

Millions of Americans in 24 states are set to lose unemployment benefits as early as June 12


Millions of unemployed Americans across the country will lose jobless benefits in June and July as at least 24 Republican-led states move to end federal unemployment assistance before the current September 6, 2021 expiration date.

The benefits that would end early include not only the extra $300-per-week federal supplement, but also the programs for gig workers and others who do not normally qualify for aid (Pandemic Unemployment Assistance, or PUA) and for the long-term unemployed (Pandemic Emergency Unemployment Compensation, or PEUC) in most cases.

These are the new dates that the benefits will expire in different states:

A worker in Iowa, for example, would lose out on almost $4,000 in enhanced benefits — and possibly more if he or she is a gig worker who would not normally qualify for the state payments at all, or has been out of work longer than the 26 weeks typically covered by most states.

Some of the states ending benefits early are offering financial incentives for a limited number of people who find work. That includes Arizona, Montana, New Hampshire and Oklahoma.

Why end the payments early

Currently, all of the programs are set to last through September 6, 2021 as part of the American Rescue Plan and are funded by the federal government. But many Republican governors say that the enhanced benefits are keeping people from going back to work.

"Employers are telling me one of the big reasons they cannot recruit and retain some workers is because those employees are receiving more on unemployment than they would while working," Idaho Governor Brad Little (R) said in a statement. "My decision is based on a fundamental conservative principle — we do not want people on unemployment. We want people working."

But the move to cut federal unemployment benefits seems "tied to politics, not economics," the economic research team at JPMorgan Chase wrote in a research note this week. The benefits are likely causing some people to stay home, but overall are not a major factor in the unemployment rate.

Research throughout the pandemic also found that "major changes in pandemic unemployment compensation, first from $600 to $300 in September, and then from $0 to $300 in January, had little impact either way on job finding rates," writes Andrew Stettner, senior fellow at the Century Foundation.

Stettner writes that cutting the benefits early also fails to recognize that the money is typically spent by the workers, meaning it goes right back into the local economy and supports small businesses.

"Any benefits that the state's businesses might receive from some of these workers, in terms of faster ability to hire them in the short term, would be overwhelmed by the loss of unemployment debit card swipes hitting the cash registers of those same businesses," Stettner writes.

Correction: This article has been updated to clarify that the benefits in Utah end June 26.

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