If unemployment benefits during the coronavirus pandemic became the subject of a television show, it surely would get canceled.

That’s because the plot would keep repeating itself — and it would go something like this:

Millions of Americans are getting higher than usual unemployment benefits, a cut off date is approaching when they’ll stop receiving them, and lawmakers argue back and forth for a couple of weeks — or even months — about whether or not it makes sense to extend them.

And just when everyone loses hope and thinks there’s no chance pandemic-era unemployment benefits will get renewed, they do.


‘Paying people as much or more not to work as to work doesn’t make sense at this point.’

The story so far: Some 3.5 million Americans from 26 states have already stopped receiving an extra $300 a week in unemployment benefits before the Sept. 6 cut off date set in the American Rescue Plan.

That’s because the governors in these 26 states, which include Texas, Ohio and Florida, held that the extra benefits were keeping unemployed people from applying to new jobs as employers complain of labor shortages.

Approximately 9.25 million Americans in the other 24 states, which include New York, California and Illinois, are set to stop receiving the extra $300 next month and other federal unemployment benefits, according to analyst Andrew Stettner’s estimates.


Some 9.25 million Americans in 24 states, including New York, California and Illinois, will not receive the extra $300 next month.

“Like the end of eviction protections, the cut off in aid is coming before families are able to stabilize themselves and find a seat in the economic recovery,” Stettner, an unemployment expert at the Century Foundation, a liberal-leaning think-tank, told MarketWatch.

“The end of these benefits will put jobless individuals in harm’s way and will slow the pace of economic recovery as billions of consumer spending will be lost each week,” he added.

Unlikely to be extended again

What are the chances that the enhanced unemployment benefits are extended? “I would be a little bit surprised if there is action,” said Marc Goldwein, a senior vice president at the Committee for a Responsible Federal Budget, a nonpartisan nonprofit organization based in Washington.

Even President Joe Biden said in June that it “makes sense” for the $300 a week benefit to expire in September.

At the time, the pandemic seemed relatively contained in the U.S. as vaccination rates were steadily increasing.


President Joe Biden said in June that it ‘makes sense’ for the $300 a week benefit to expire in September

But lately, rates are slowing, which is especially concerning as COVID-19 cases are rising in light of the highly contagious delta variant, U.S. Centers for Disease Control director Dr. Rochelle Walensky said last week.

As a result, the CDC is now recommending people regardless of vaccination status wear face masks indoors in areas where there’s substantial and high transmission of COVID-19 as well as in K-12 schools. 

Stettner is encouraging lawmakers to consider that the delta variant could complicate the process of finding a job, especially if schools don’t fully reopen come September.

“These benefits should continue until employment comes closer to pre-pandemic levels and the public-health situation stabilizes,” he said.

But Goldwein disagrees.

“In general there are enough safe jobs out there for people that want them if they’re vaccinated,” he said. “So paying people as much or more not to work as to work doesn’t make sense at this point.”


The extra $300 a week in unemployment benefits is equal to what Americans on average made from their prior jobs

The extra $300 a week in unemployment benefits is equal to what Americans on average made from their prior jobs, meaning half of the Americans getting the money received more than they would from working.

At the same time, Goldwein said programs like Pandemic Unemployment Assistance, which enabled gig workers and self-employed workers to collect unemployment benefits, shouldn’t end in September.

Some 5.2 million Americans collected PUA benefits as of July 10, according to the Department of Labor.

The best path forward would be for states to put unspent stimulus money they received towards extending unemployment benefits at a level they deem is appropriate, he said. The Biden administration should encourage this just as it did with doling out $100 checks to people who get vaccinated.

The Department of Labor did not respond to MarketWatch’s request for comment on whether or not it would encourage states to extend unemployment benefits on their own.

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