For millions of Americans, this Labor Day represents a perilous, looming deadline — enhanced federal unemployment benefits, including the $300 weekly boost to state aid, are set to expire on Monday, Sept. 6, leaving many Americans struggling to find work to wonder what comes next.
Starting Monday, an estimated 8.9 million people will lose all unemployment benefits.
According to estimates from The Century Foundation, about 2.7 million Americans are losing the $300 enhanced federal weekly unemployment aid (but will still receive statewide benefits), while more 8 million people will be left without any unemployment benefits at all.
The end of the enhanced benefits, enacted in March 2020 under then-President Donald Trump to aid Americans amid the COVID-19 pandemic and extended twice, could have a devastating impact for the millions of Americans still struggling to find work as the highly contagious delta variant of the virus rages.
“This will be a double whammy of hardship,” Jamie Contreras, secretary-treasurer of the Service Employees International Union (SEIU), which represents almost 2 million workers, told The Associated Press. “We’re not anywhere near done. People still need help.”
“For millions of people nothing has changed from a year and a half ago,” Contreras added.
In the last few months, two dozen states — the vast majority of them led by Republican governors — have opted out of federal benefits, slamming them as incentives for people to not want to return to work.
Biden administration officials have repeatedly said there is no evidence that the expanded federal unemployment benefits had any impact on keeping Americans out of the workforce.
“Overall the economy is moving forward and recovering,” Labor Secretary Marty Walsh recently said. “I think the American economy and the American worker are in a better position going into Labor Day 2021 than they were on Labor Day 2020.”
While several other programs are still in effect, including the expanded Child Tax Credit and rental assistance, millions of Americans face a greatly reduced social safety net.
However, a White House spokesperson said there were no plans to reevaluate the end of the unemployment benefits.
“Twenty-two-trillion-dollar economies work in no small part on momentum and we have strong momentum going in the right direction on behalf of the American workforce,” Jared Bernstein, a member of the White House Council of Economic Advisers, said.
Officials maintain that other elements of the safety net, like the Child Tax Credit and the Supplemental Nutrition Assistance Program (SNAP) — which Biden permanently boosted earlier this summer — are enough to smooth things over.
Some of those who benefitted from the programs do not share the same optimism.
“It’s really scaring me,” said Mary Taboniar, a housekeeper at the Hilton Hawaiian Village resort in Honolulu and a single mother of two. “How can I pay rent if I don’t have unemployment and my job isn’t back?”
For more than a year, Taboniar depended entirely on boosted unemployment benefits and a network of local food banks to feed her family. Even this summer as the vaccine rollout took hold and tourists began to travel again, her work was slow to return, peaking at 11 days in August — about half her pre-pandemic workload.
Taboniar told the AP that she is planning to apply for the newly expanded SNAP assistance program, better known as food stamps, but doubts that will be enough to make up the difference: “I’m just grasping for anything.”
Andrew Stettler, a senior fellow with the Century Foundation, says the end of the expanded unemployment benefits is coming too early, and believes that the Biden administration should have tied the end of the the protections to specific economic recovery metrics rather than set an arbitrary deadline.
“This does seem to be the wrong policy decision based on where we are,” Stettler told the AP.
Stettler suggests three consecutive months with nationwide unemployment below 5% as a reasonable benchmark to trigger the end of the unemployment benefits.
The unemployment rate fell to a relatively healthy 5.2%, according to August’s jobs numbers released Friday, falling from 5.4% the month prior.
But Stettler said that millions of people potentially “will have a more difficult time regaining the foothold in the middle class that they lost.”
The COVID-19 response has been sweeping in its size and scope, some $5 trillion in federal expenditures since the virus outbreak in 2020, an unprecedented undertaking.
President Joe Biden and the Democrats who control Congress are at a crossroads, allowing the aid to expire as they focus instead on his more sweeping “build back better” package of infrastructure and other spending.
The $3.5 trillion proposal would rebuild many of the safety net programs, but it faces hurdles in the closely divided Congress.
Congressional Republicans had supported some of the initial COVID-19 relief, but voted in lockstep against Biden’s $1.9 trillion recovery package, the American Rescue Plan, earlier this year, slamming it as unnecessary. Many argued against extending another round of unemployment aid, and Republicans vow to oppose Biden’s $3.5 trillion budget package, known as the Build Back Better act, which lawmakers are expected to consider later this month.
The $3.5 trillion bill would provide funding for free education programs, paid family leave and child care benefits, as well as efforts to combat climate change. It does not need Republican support if passed through the Senate's budget reconciliation process – the same way Democrats passed Biden's $1.9 trillion American Rescue Plan.
There are still multiple avenues of support available, although in some cases the actual delivery of that support has been problematic.
States with higher levels of unemployment can use the $350 billion worth of aid they received from the relief package to expand their own jobless payments, as noted by an Aug. 19 letter by Walsh and Treasury Secretary Janet Yellen.
Federal rental assistance funds remain available, though the money has been slow to get out the door, leaving the White House and lawmakers pushing state and local officials to disperse funds more quickly to both landlords and tenants.
Morgan Stanley estimated last week that the economy will grow at an annual pace of 2.9% in the third quarter, down sharply from its prior forecast of 6.5%. That decline largely reflects a pullback in federal aid spending and supply chain bottlenecks.
The sudden lapse of a crucial element of the pandemic safety net has fueled calls for a re-evaluation of the entire unemployment benefits system. Sen. Ron Wyden, D-Ore., the chairman of the Finance Committee, said in an interview it’s crucial that Congress modernizes the unemployment insurance system as part of the package.
“It’s heartbreaking to know it didn’t have to be this way,” Wyden said, proposing having jobless benefits more linked to economic conditions, so they won’t expire in times of need.
“We got to take the unemployment system into the 21st century,” Wyden said.
The Associated Press contributed to this report.