By Megan Henney, FOX Business
The Biden administration said Thursday that extra unemployment benefits put in place to keep out-of-work Americans afloat during the coronavirus pandemic will end as planned next month, but encouraged states with high jobless rates to repurpose federal relief money in order to extend the aid.
The supplemental benefits – first established in March 2020 and renewed twice by Congress – are poised to expire on Sept. 6 under the $1.9 trillion relief plan that Democrats passed in March. Some 7.5 million workers are expected to lose their benefits, according to a recent report published by the left-leaning Century Foundation.
In a letter addressed to Democratic chairmen in the House and Senate, Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh said that President Biden still believes it’s “appropriate” for the three relief programs to end on Labor Day. But they stressed that some states with persistently high unemployment rates should consider continuing the relief programs using the $350 billion in state and local government aid allocated by the American Rescue Plan.
“Even as the economy continues to recover and robust job growth continues, there are some states where it may make sense for unemployed workers to continue receiving additional assistance for a longer period of time, allowing residents of those states more time to find a job in areas where unemployment remains high,” they wrote.
That could include blue states such as New Mexico, Connecticut, Nevada, New York and California, where the jobless rate is still above the national average of 5.4%, according to Labor Department data.
In addition to providing workers with an extra $300 a week on top of their regular state benefits, the programs offered aid to workers who were not typically eligible and extended state unemployment benefits once they had been exhausted.
But as the economy reopens, companies have complained about a lack of available workers: There are still some 5.5 million unemployed Americans, despite the staggering 9.2 million open jobs.
Already, 23 states – all but one of which is led by a Republican governor – have ended the unemployment programs, a move intended to help businesses that are struggling to hire workers. (Arkansas, Indiana and Maryland were ordered by state judges to reinstate the relief programs.)
Critics argue that other factors, such as a lack of child care, are the reason for lackluster hiring and have said that opting out of the relief program before it’s officially slated to end will hurt unemployed Americans, leaving them with no income as they search for a new job.
Despite the rapid spread of the highly contagious delta variant, which has prompted states to restore mask mandates and businesses to reverse return-to-work policies, there appears to be little momentum on Capitol Hill to extend the unemployment relief programs.
The average state unemployment benefit is about $330 per week. With the federal supplement, Americans are receiving about $630 in weekly unemployment benefits. (For comparison’s sake, that’s about $32,000 annually, or roughly double the nation’s minimum wage.)