More than 7 million Americans will lose their benefits as a September deadline calls an end to federal pandemic unemployment aid programs with dim prospects for an extension due to the surging labor demands in the United States.

The benefits program was initially created to help Americans cope during the worst of the economic impact of the COVID-19 outbreak; however, the programs are due to end by September 6, even as leftist groups call for unreasonable extensions. In particular, there is reluctance from Capitol Hill, considering the record-high number of job openings and layoffs being at their record lows. Businesses also reported difficulties with hiring workers. 

In March 2020, the government established three more programs with the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act:

  • Pandemic Unemployment Assistance (PUA), which covers workers who are typically ineligible for regular state unemployment insurance benefits, such as freelancers and gig workers.
  • Pandemic Emergency Unemployment Compensation (PEUC), which provides additional coverage beyond the regular 26 weeks that most states provide.
  • Federal Pandemic Unemployment Compensation (FPUC), the $300 weekly boost over and above state benefits.

According to a Labor Department report, nearly nine million Americans received benefits under two programs as of July 24.

Over 7 million individuals to be cut off gov’t unemployment “benefits” after Labor Day

The Century Foundation, a left-leaning think tank also estimated that when all programs expire, over 7.5 million people will be cut off. Andrew Stettner, a senior fellow at the Century Foundation, said: “Cutting off benefits by Labor Day will leave 7.5 million workers without critical assistance they need to keep themselves financially stable until they can find a new job. Imposing such deep hardship on families and the economy, is an unforced economic policy error that can and should be avoided.”

However, there is a record 10.1 million job openings in June, and businesses have been reporting hiring difficulties, so lawmakers, both Republicans and Democrats, have expressed reluctance to extend the programs. Republicans, who said generous unemployment benefits were sidelining workers at a time when businesses are on a hiring spree, are expected to oppose renewal proposals put forward by Congress.

Senator Lindsey Graham of South Carolina urged the Biden administration in June to cancel federal pandemic aid programs ahead of schedule, telling the acting White House budget chief that the programs were creating disincentives for people to apply for, and take jobs.

“There’s a lot of jobs out there that are unfilled and will never be filled until you change the benefit structure,” Graham said.

To encourage the unemployed to get back on payrolls, some states have ended their participation in the benefits programs ahead of the scheduled expiry date.

President Biden himself hasn’t endorsed any extensions; however, press secretary Jen Psaki left the possibility open, saying in an August 6 briefing that a final decision regarding the matter is yet to be made.

The National Employment Law Project, a left-leaning advocacy group that supports expanded jobless benefits and greater labor protections, said that by cutting off the programs, the U.S. is exacerbating the inequity that already exists in the economy. The group and other experts estimate that over 7.5 million stand to lose all of their unemployment aid after Labor Day.

Jenna Gerry, senior staff attorney with the National Employment Law Project noted that the vast majority of benefit recipients will be totally cut off as greater child care responsibilities and other delta-related limitations could still narrow job options for those who are struggling to return to the labor force. “We don’t know what’s going to happen with schools. Just having an open job isn’t enough. We need the proper support to allow these workers the ability to get back to quality jobs,” she said.

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