Federal unemployment benefits end: is it possible to request an extension?
More than 9 million people will see their incomes plummet as federal pandemic unemployment programs have ended. Are any states offering extensions?
In May and June, more than half of states, all but one led by Republicans, chose to end unemployment benefits early, citing labor shortages.
However, in the states that opted to terminate the Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs early, few indicators show the move led to an increase in employment.
Additionally, some states that maintained the benefits saw greater increases in employment when compared to states of similar size that cut benefits.
Take Georgia and North Carolina, for example, which both states have a population of around 10.5 million. According to the Wall Street Journal, while Georgia chose to end benefits in June, North Carolina didn’t the state experienced a job growth rate of 3.2 percent compared to the 2.8 percent increase seen in Georgia.
As of mid-August, around 9 million people claimed federal unemployment benefits through the PUA and PEUC programs. All states cap the number of weeks benefits can be claimed, so the PEUC program was established to provide additional benefit coverage after state limits had been expended.
These programs have now ended, leaving many wondering if extensions are possible in their states.
More from AS English:
Are any states offering extensions?
There seems to be little interest on Capitol Hill to extend the programs at the federal level.
The Biden administration has encouraged states experiencing high levels of unemployment to use emergency funds from the American Rescue Plan to provide benefits to those still out of work.
Why aren't extensions being offered?
States have their own reasons for not offering extensions.
Some states like Arkansas have stated that they will not extend unemployment benefits as they have seen decreases in the unemployment rate. Sitting at 4.5 percent, the state would be remiss in recognizing that while lower than the national average, the rate is still a full percentage point higher than the figure recorded in August 2019.
In Oregon, representatives from the Oregon Employment Department told CNBC that they would be unable to provide an extension as the funds from the American Rescue Plan have already been earmarked for other priorities.
How will the ending of federal programs impact the economic recovery?
The US economy is built upon high levels of consumer spending. When people spend money, the economy does well. When spending slows, the economy slows right there with it.
The most recent Household Pulse Survey conducted between 4 and 16 August by the US Census Bureau found that nearly a quarter of renters reported that they were “Not at all confident” or only “Slightly confident,” that they would be able to pay next months rent.
Around 11 percent of households -- 1 in 10 -- making under $25,000 a year were not confident in their ability to pay rent next month.
To support Americans on the verge of eviction, the Biden administration established a more targeted eviction moratorium to impact families. Rather than a general moratorium, the new order enacted banned evictions in “specific areas of the country where cases are rapidly increasing, which likely would be exacerbated by mass evictions.”
However, a few days later, the Supreme Court ruled the moratorium unconstitutional, leaving millions of households vulnerable. The three more liberal justices dissented with the remaining six votings on the side of the Alabama Realtors Association to overturn the ban on evictions. This decision came as more than 9 million Americans were scheduled to lose their unemployment benefits which for many were the difference between keeping a roof over their heads or being kicked to the curb.
In the majority ruling, the justices stated that “Despite the CDC’s determination that landlords should bear a significant financial cost of the pandemic, many landlords have modest means,” and that the moratorium infringed upon their fundamental rights as property owners.
However, after the 2008 Financial Crisis left millions of homes abandoned, Wall Street, those responsible for the financial collapse, began buying up rental properties. As of 2015, researchers at Harvard had found that financial institutions owned more than a quarter, a fact that was left out of the justice’s majority opinion.
For those “small” landlords, Congress appropriated $46 billion in rental assistance for states to support landlords and tenants. Notably, by late August, little of this money has been distributed.
The government's failure to distribute these funds is not the fault of tenants. The inaction represents a policy failure, for which some of the most vulnerable children and families will pay the price when they are evicted from their homes.
This is not the first time the PUA and PEUC programs have expired.
The CARES Act, which was passed in March 2020 just as the pandemic began, allowed for a $600 topper to be sent in addition to state benefits through July 2020. When these additional payments ended, personal income levels dropped from around $20.3 billion to $19.7 billion.
The Bureau of Economic Analysis recently released the personal income and consumer spending data for July.
July was the first month the first payment of the Child Tax Credit was made, and many assumed that it might lead to an increase in personal income, similar to the spike seen after the sending of the third stimulus check in March 2021. While personal income did increase 1.1 percent, disposable income, what households actually have to spend, decreased 3.5 percent.
Now, with the August jobs report showing a slowdown in hiring and federal unemployment programs ending, personal income -- disposable and not -- is sure to be impacted.
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