WASHINGTON DC— American states that ended pandemic jobless benefits
early saw slight dips in unemployment rates but big declines in spending and
income, according to a study released Friday, in what could be a preview of the
effects nationwide when the programs end completely.
اضافة اعلان
First created by the CARES Act in March 2020 and extended several times
since, the emergency benefits increased weekly unemployment payments and
expanded them to freelance workers and the long-term unemployed.
But the federal aid has become controversial in recent months, as critics
say it encourages people not to return to work even as COVID-19
vaccines became
widely available and businesses struggle to fill open positions.
Officials in 26 states — mostly led by Republicans — have announced early
cuts to some or all of the programs, which are due to expire nationwide on
September 6.
Analyzing data from 18,648 people who had received unemployment payments,
the study found nearly 25 percent had jobs at the end of July in 19 of the
22 states that ended extra benefits in June.
That compares to about 22 percent in the 23 states that continued the
programs.
However, the employment gains did not make up for the decline in incomes and
spending that followed, according to the researchers from Columbia University,
Harvard University, University of Massachusetts Amherst, and University of
Toronto.
"We see a small ... rise in earnings of $14 per-week, making up around 5
percent of the shortfall from benefit decline," they wrote in the study
using data from financial services firm Earnin.
However, unemployment benefits fell by $278 a week and "the reduced
income was accompanied by a $145 per-week (20 percent) fall in spending."
Nationwide spending
drop?
As the aid ends nationwide, "We could see around $8 billion in reduced
spending during September and October. The spending losses are likely to
continue further as additional workers take time to enter the workforce,"
they wrote.
While the authors were not certain, they predicted about half a million new
jobs would be created in September and October, but the majority of the 4
million people who would lose benefits after the September expiration would
"take much longer to find jobs."
President Joe Biden's American Rescue Plan stimulus package passed in March
allocated $350 billion to state and local governments, and on Thursday his
administration said states could use that money to keep the expanded benefits
going beyond September, especially if rising infections from the Delta variant
of COVID-19 delay hiring.
Labor Department data released Friday gave a mixed verdict on the impact of
the benefit cuts on state-level unemployment rates, with joblessness declining
in only 17 states in July, nearly half of which had cut the benefits early.
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