Federal Aid to the Unemployed to End, Appropriately, on Labor Day

By Yehudit Garmaise

    On Monday, several federal unemployment benefit programs will expire in New York and across the country, as per federal law. 

    When the COVID pandemic hit, and millions of Americans were not able to go to work, on March 27, 2020, President Donald Trump provided more federal funds than ever before when he signed into law the $2.2 trillion economic stimulus bill: the Coronavirus Aid, Relief, and Economic Security Act (The CARES Act), which after being twice-extended, will come to an end on Monday, which is Labor Day.

     On Monday, approximately 9 million people will significantly enhanced unemployment benefits, according to an estimate from The Century Foundation. Another 3 million Americans will see their weekly benefits reduced.

    The federal benefit programs that will expire are the Pandemic Unemployment Assistance, the Pandemic Emergency Unemployment Compensation, Extended Benefits, $300 Federal Pandemic Unemployment Compensation, and $100 Mixed Earner Unemployment Compensation.

    The benefits Americans were receiving raised weekly jobless benefits by $600 a week, and later, by $300 a week, increased the types of workers, such as self-employed, gig workers and part-timers, who were eligible for benefits, and extended the times in which Americans could collect unemployment. 

    Many families report feeling scared for their financial futures, but many other Americans have reported declining benefits that would have exceeded what they could have made on their own, thereby potentially discouraging them to continue working.

     In addition, many economists, who believe the enhanced federal financial aid to the unemployed should end now, argue that the benefits encourage Americans to stay home, rather than looking for work.

    In April 2020, the US suffered the worst and the most rapid economic downturn in history, when the national unemployment rate soared to 14.8%, which was the highest the rate had ever been since the US started recording it in 1948.

    Now, however, the unemployment rate has significantly decreased to 5.4%: causing many to wonder why the unemployed are not out looking for work.

   In addition, in June, the number of job openings in the US was a record 10 million, which exceeds the number of officially unemployed individuals. Many economists are wondering why those who are out of work are not rushing to apply for available jobs.

     “It’s hard to justify having a program that’s encouraging people not to work at the same time employers are struggling to keep their business [going],” said Rachel Greszler, a research fellow in economics, budget and entitlements at the Heritage Foundation, a right-leaning think tank.

    Although New York has not done so, approximately half of American states, primarily led by Republican governors, withdrew from most or all federal enhanced unemployment programs in June or July to encourage Americans to return to work.

     Unemployment insurance benefits will continue to be paid to eligible claimants, says the New York State Department of Labor website. 

     To continue to be considered eligible, a claimant must be both unemployed and be in the first 26 weeks, or 104 effective days of benefits, the website says.