Millions to lose jobless aid as claims fall
WASHINGTON >> Millions of jobless Americans who have depended on federal unemployment aid as a financial lifeline are about to lose those benefits just as the delta variant of the coronavirus poses a renewed threat to the economy and the job market.
Two programs — one that provides jobless aid to self-employed and gig workers, the other to people who’ve been unemployed for more than six months — will expire Monday. As a result, 8.9 million people will lose those weekly benefit payments, according to an estimate by Oxford Economics.
An additional 2.1 million people will lose a $300-aweek federal supplemental unemployment payment, which also expires Monday. These recipients will, however, continue to receive state unemployment benefits.
The cutoffs come as employers have been steadily hiring and laying off fewer workers. The number of people applying for jobless aid dropped 14,000 last week to 340,000, the Labor Department said Thursday, to the lowest level since the pandemic struck in March of last year.
Still, the number of people who will lose financial support starting next week is much higher than during previous cutoffs of expanded unemployment aid. After the Great Recession in 2008-2009, for example, when jobless aid was extended to 99 weeks, that extension lasted through 2013. When that benefits program finally ended, just 1.3 million people were still receiving aid.
The current expanded jobless aid programs were created in the financial rescue legislation that was enacted after the pandemic erupted and was extended by President Joe Biden last March. Lawmakers generally expected that by September, with more Americans vaccinated and employers stepping up hiring, the pandemic would fade and the economy would fully recover.
While the economy is rebounding, economists worry that the delta variant may slow hiring and growth. When the government releases the August jobs report Friday, some analysts expect it to show a slowdown in hiring.
Next week’s cutoff of unemployment checks for millions will abruptly erase a vital source of income for many.
Twenty-five states have already ended the $300 weekly supplement and nearly all of those have also stopped the two emergency federal programs, ending payments for about 3.5 million people, Oxford Economics estimates. Those early cutoffs occurred after some businesses complained in the spring and summer that they couldn’t find enough people to hire.