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Lawmakers, economists and advocates are scrambling to expand a handful of key federal aid programs established at the start of the pandemic, many of which are expected to end just as the Delta variant has led to a further surge in the number of Covid case in the United States.
Already this week, following pressure from House Democrats, the CDC extended the federal moratorium on evictions until October 3 after it expired over the weekend. Now, other Congressional Democrats are asking the White House to extend the hiatus on federal student loan payments that expire in late September, the Washington Post reports.
Meanwhile, advocacy groups are also drawing attention to the extension of pandemic unemployment benefit programs which are due to expire on September 6, Labor Day.
Will unemployment benefits in the event of a pandemic be extended?
The CARES law of March 2020 established three new federal unemployment assistance programs: Pandemic Unemployment Assistance (PUA), which covers those who are not traditionally eligible for assistance, including freelancers and concert workers; Pandemic Unemployment Emergency Compensation (PEUC), which extends assistance to those who have exhausted their state’s benefit period, which averages around 26 weeks; and Federal Pandemic Unemployment Compensation (FPUC), a weekly boost of $ 600 that has been reduced to $ 300 per week to help people recoup more of their lost wages.
Now, “what advocates feared would happen with the last extension until Sept. 6 is happening now,” Jenna Jerry, senior attorney with the National Employment Law Project, told CNBC Make It. “We knew Covid wouldn’t be over. And it isn’t. With the increase in the delta variant and the return of mask warrants, we are backing down and ending aid when people continue to need them and rely on them. “
The public health crisis could “make people think twice about this threshold of benefits,” says Andrew Stettner, senior researcher at the Century Foundation.
However, “people are still hopeful for this extension, but to be honest there isn’t a lot of political momentum behind it right now.”
Stettner says it’s not clear that a sufficient number of lawmakers would support keeping unemployment benefits, as critics mainly focus on whether the weekly $ 300 boost is discouraging people from finding a new job.
Businesses in all sectors, especially in the leisure and hospitality industries, are struggling to fill a growing number of job vacancies. In response to weak job growth in April, the governors of 26 states announced plans to end pandemic unemployment programs in early June and July.
A handful of economic analyzes in recent weeks show that there has not been a strong correlation between state aid cuts and immediate improvements in job search activity, d hiring or employment.
The U.S. labor market created 943,000 better-than-expected jobs in July, according to the latest jobs report, but economists to warn this numbers do not consider state outages and therefore cannot determine the impact of state cancellation of pandemic unemployment benefits on hiring.
What happens if the benefits expire
Stettner says that while the focus remains on ending the $ 300 increase, allowing the PUA and PEUC programs to end would result in “cliff of unemployment ”for around 7.5 million people and their families after 6 September.
As of mid-July, about 9.4 million people were benefiting from one of these programs, or more than 72% of Americans receiving unemployment insurance overall.
By nature, people on PUA are not entitled to any other type of unemployment insurance, so these beneficiaries will not have another safety net to recover lost wages.
Some long-term unemployed claiming PEUC could switch to Extended Benefits, a federally-funded assistance program that kicks in “on” based on their state’s unemployment rate.
Benefits have been extended in other recessions
“We have already extended unemployment benefits,” Stettner said. “They are usually kept in place for several years after a payback, knowing that unemployment occurs quickly, but re-employment takes time.”
While he sees little political support for keeping the weekly benefit of $ 300, “that doesn’t mean we have to take it all out.”
Following the 2008 financial crisis, Congress created and extended Emergency Unemployment Benefit in December 2013, when 1.3 million people were cut off from unemployment assistance.
Even so, critics said the 2013 deadline was too early, based more on calendar dates than economic conditions for some of the most vulnerable workers. By the time Congress allowed aid to expire, the black unemployment rate was over 10% and the national rate was also high, Stettner said.
Looking at current conditions, the overall unemployment rate fell to 5.4% in July, according to the latest jobs report, but is higher for black workers (8.2%) and Hispanics (6 , 6%).
Lawmakers have set expiration dates and extended pandemic unemployment benefits several times since March 2020, leading some economists to advocate defining a phase-out period based on economic conditions, such as the unemployment rate, rather than a calendar date.
Groups call for unemployment insurance reform
Many workers’ advocacy groups, including Unemployed Action, ExtendPUA and Unemployed Workers United, have worked with policymakers to improve unemployment benefits throughout the pandemic with the ultimate goal of longer-term systemic reform, Jerry said.
Advocates say that the permanent expansion of the pool of workers eligible for unemployment assistance can improve a inequitable unemployment insurance system. Americans most likely to be supported by temporary PUA and PEUC programs today – the long-term unemployed, the self-employed, the self-employed, concert workers, part-time workers, and caregivers – are also disproportionately black, Hispanic, Asian, female, and low-income. employees.
“Unemployment insurance is an essential program,” says Jerry, “but it was created in the 1930s and exclusively excluded BIPOC workers. Over the years we have made progress towards reform, but the need for PUA, PEUC and FPUC shows how much further we need to go. “
To verify: Millions to lose pandemic unemployment in September – many have already been cut
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