In which states did unemployment claims increase last week?
After federal unemployment programs end, a new report from the Department of Labor showed increases in the number of claims the week before.
When federal pandemic-related unemployment programs ended on 6 September, nearly 9.3 million workers had claimed benefits the weeks before. The expiration of these programs impacts those who claim the benefits and approximately 26 million family and household members who also rely on the income, many of whom are children.
After August saw the slowest in job growth in recent months, many believe that benefits were cut too soon and believed it could hinder the economic recovery as millions of households see incomes plummet.
Alarming stat of the day— Morning Brew ☕️ (@MorningBrew) August 31, 2021
750,000 households in the US could be evicted by the end of 2021, Goldman Sachs wrote after the Supreme Court scrapped the CDC’s eviction moratorium.
Up to 3.5 million households collectively owe landlords as much as $17 billion.
These programs served their purpose throughout the pandemic. The US Census Bureau has released new data showing that the programs prevented “5.5 million individuals from falling into poverty.” When adding the impacts of the two stimulus checks sent in 2020, this number is boosted to 11.7 million.
NEWS: US poverty *fell* in 2020 due to massive federal aid (esp. stimulus checks & unemployment).— Heather Long (@byHeatherLong) September 14, 2021
The poverty rate that takes into account gov't aid declined to 9.1% -- the lowest on record.
(Data from US Census)https://t.co/VlTI9Mh2qP pic.twitter.com/6oavEIFzNT
What has been the response from economists over the choice to end benefits?
However, with the future of the economic recovery still unknown, the ending of benefits too soon could result in millions falling into poverty as their lifeline has been cut.
Nobel prize-winning economist Joseph Stiglitz reiterated this point in a recent interview with Democracy Now!. Stiglitz called the situation “disturbing” and spoke to how the US should have passed legislation to ensure the continuation of payments so long as the unemployment rate remained elevated. Stiglitz pointed out that in many states, the rate of those without work remains high and that the federal government “should have continued” the benefit payments.
Where were increases in claims seen?
On Thursday, 16 September, the Bureau of Labor Statistics reported the first increase in initial unemployment benefit claims in weeks. Last week, initial claims rose by 20,000 to 32,000.
Pandemic Unemployment Assistance (PUA)
The PUA program that allowed for the sending of benefits to workers in the gig economy saw increases in initial claims in seventeen states the week ending on 4 September. The new report shows that the state's that saw the greatest uptick in claims were:
- Massachusettes: 2,565
- New Mexico: 1, 132
- Virginia: 736
- Michigan: 547
- Oregon: 449
Pandemic Emergency Unemployment Compensation (PEUC)
For the week ending on 28 August, the PEUC program that allowed for the sending of a $300 topper in addition to state benefits saw increases in seventeen states as well. This figure represents most states where these benefits were still available, as the twenty-four states cut the benefit earlier this summer. The largest increases were seen in:
- New York: 56,633
- Pennsylvania: 10,490
- Virginia: 4,058
- New Jersey: 3,187
- Massachusettes: 1,148.
Will Congress extend these programs?
On 15 September, Representative Alexandria Ocasio-Cortez spoke about a new bill she and other members would be putting forward to extend these programs through February 2022. However, the Congresswomen did not sound optimistic about the bill's ability to get passed.
Democrats, including President Biden, have taken a wait-and-see approach to evaluate if an extension is needed. But after August showed the slowest job growth in recent months and the eviction moratorium being lifted, many in Congress believe that many who lost their benefits find themselves in an increasingly precarious and vulnerable situation.
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