What Happens Once Unemployment Benefits End?

OPINION: Experts say ending the benefits will do more harm than good to the economy and the jobless.

By Amy Guethlein

More than 7 million jobless Americans lost their unemployment benefits on Labor Day, which brings hesitancy as COVID-19 still poses a threat. The abrupt ending of these benefits could have a devastating effect on the jobless as well as the economy as a whole. It could change the lives of those who are still struggling to find work amid the pandemic as the new delta-variant adds more pressure.

And yet, Senator Ted Cruz responded on Twitter by saying, “um, get a job?”

If only it were that easy.

The expiration of the benefits sends worries across the country about waves of poverty rippling and people becoming unable to pay for food, gasoline, and bills. Andrew Stettner, a senior fellow at The Century Foundation who has studied unemployment insurance, echoes these anxieties and states,“if past periods have been an indicator, many will be caught in a spiral that will lead to a downward quality of life.” Twenty-six states opted to end the extra $300 federal benefit before the cut-off date in waves between June and August. Its governors stated the benefits were discouraging out-of-work Americans from looking for jobs.

However, economists and analysts cite pandemic-related factors, not the enhanced benefits, as the main cause of individuals not returning to the workforce as initially predicted. Factors such as low wages and finding child care play a large role in many remaining unemployed. Economic research during the pandemic found that the expanded benefits in the pandemic unemployment compensation had little effect on an increase in hiring, according to a study done by Yale. This study contradicts critics that insist these benefits would incentivize the unemployed to put off returning to work.

Many economists worry this drop of benefits will make millions financially suffer as well as sabotage the economy. Given the inconsistency of the COVID-19 pandemic, many Americans have family care issues or safety concerns and are afraid of going back to work and contracting the virus. This new variant also has many people wary about traveling, shopping, or eating out, which hurts both the economy and those businesses trying to find workers. With the unemployment benefits ending, consumer spending will drop, according to Wendy Edelberg, an economist at The Brookings Institution. Certain industries, such as restaurants, hotels, and retailers, have due to the new strain- making job hunting even more difficult.

As of now, the White House has no plans on extending the unemployment benefits, stating they were always meant to be temporary. However, Congress did approve $350 billion of pandemic funds in the American Relief Plan for states to use to continue the unemployment financial relief. A letter authored by Secretary of Treasury Janet L. Yellen along with Secretary of the Department of Labor Martin J. Walsh says this extra support will benefit “states where it may make sense for unemployed workers to continue receiving additional assistance for a longer period of time,“as people continue their job search.

While the pandemic assistance has ended, Americans can still apply for regular unemployment benefits. Eligibility varies from state to state, but anyone can apply if they’ve been furloughed or laid off. The Department of Labor extended eligibility back in February to include those who feel unsafe working amidst coronavirus conditions.

For another perspective on this issue, read Sean Lanigan’s Commentary: “What About The Art Of Working?”