Unemployed people fell by more than half after Labor Day fell

The number of Americans receiving unemployment benefits fell by more than half after the Labor Day “cliff” when federal aid ended for millions of people.

As of September 11, just over 5 million people were receiving unemployment assistance, a reduction of about 55% from the 11.3 million people who received benefits the week before, according to federal data released Thursday.

Pandemic-era programs that offered income support to the unemployed expired on Labor Day.

More from Personal Finance:
How Biden’s $ 3.5 trillion economic plan compares to the Great Society and the New Deal
Paid family leave could become law
These 8 money movements can help you make up for lost income

At that time, workers such as the self-employed, independent contractors and the long-term unemployed were no longer eligible for federal benefits under these programs, which had been available since March 2020.

The number of current beneficiaries is also expected to decline by millions more in the coming weeks. The 5 million beneficiaries underway as of 9/11 include an estimated 2 million people who, on paper, received federal assistance under stale programs – a dynamic that reflects processing delays and backdated claims, according to experts at the job.

Unemployed people who remain eligible for state allowances can continue to receive this aid. However, they receive $ 300 less per week due to the expiration of a federal benefit supplement.

Congress had extended federal benefit programs in December 2020 and again in March 2021, but chose not to do so a third time due to improving economy and labor market.

Twenty-six states withdrew from programs early in an attempt to get beneficiaries back to work. However, the available evidence suggests that the improved benefits did not keep large numbers of workers on the sidelines.

Economists believe other factors such as ongoing health risks and childcare responsibilities, especially amid the virus’ delta wave, play a bigger role in any worker shortage.

Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh had urged states with high unemployment rates to continue to provide aid to some unemployed people using other pandemic pots of funds allocated by the federal government. It doesn’t seem like they did, however.