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With Federal Aid Expiring, Millions Of Americans Will Lose Jobless Benefits


It is Labor Day, but millions of Americans have no labor to celebrate. Two government protections that were rolled out last year are also gone. The $300 weekly unemployment boost stops today. Nearly 9 million people were collecting that. And a federal eviction moratorium has already expired. We're going to talk about the implications of all this for struggling families with Kristin Myers. She's the editor in chief for the personal finance website The Balance. Kristin, thanks for being here.

KRISTIN MYERS: Thanks for having me.

MARTIN: Can you tell us more about the folks who have been relying on these benefits that end this week?

MYERS: Absolutely. So, one of those programs that you just mentioned that is expiring today is the Pandemic Unemployment Assistance. That's the PUA program. Now, that's for those gig and contract workers, those part-time workers. And these are folks that typically, you know, under normal circumstances, wouldn't be eligible for unemployment benefits. And throughout the pandemic, as we've seen, you know, Uber drivers, Lyft drivers, et cetera, lose their jobs - these are folks that have been able to get unemployment benefits throughout the pandemic. So there are a huge group of people that are going to be impacted when their benefits go away altogether.

And then we're also going to see this really disproportionately impacting some of those workers that were already disproportionately impacted throughout the pandemic. That's the low-income workers, that's Black workers, overwhelmingly, that have been really impacted by this crisis. So there is a huge fear here that this really could send a lot of folks back into poverty. And I just want to also mention that there's going to be a disproportionate impact as well on certain states, those with really high unemployment rates. And so I'm thinking of Nevada, California and New York particularly.

MARTIN: So, I mean, about two dozen states actually ended the federal jobless aid earlier this summer because they were trying to get people back into the workforce. They thought that would do it. In their mind, the federal benefits were enticing people to just opt out of working. But this didn't really happen, right? So what happens now to these people who are no longer going to be receiving this aid? Do they immediately go back to work?

MYERS: Right. Well, they tried. And as you mentioned, it didn't really work. You know, they've done a lot of research on this lately, and they found that in those states that did end those benefits early, there was a very small uptick in workers going back to work. But really, honestly, in those states, it did not force workers to go back to work at all. And so what we're going to see here, if this does happen on a national scale, you are not going to see a lot of those workers essentially regain the labor force. What you're going to see are folks essentially lose benefits and lose their ability to pay rent, pay mortgage, pay for groceries, pay for other items that they might need, especially as some of those benefits just completely go away. Remember that $300 enhancement, weekly enhancement, is also going away. So this isn't going to just impact folks not receive - who are receiving tons of funds. This is going to receive (ph) folks that are also getting a little bit of a boost. So a lot of folks here are going to be impacted, and it doesn't seem as if some of the gains that could be made are offsetting some of the losses.

MARTIN: So what does this mean for the broader economy and consumer spending in particular?

MYERS: You know, it's a really good question, I think, because we do forget that sometimes this does have a much broader impact. So let's just look at this even on a more local level, right? We're going to see a loss, some estimates say, and they do vary, but a loss of total household income, they say, could be about 4.2 billion each week, at least at first. That's going to be removed from the total household income. So that's $4.2 billion less that's going to be injected into these local economies.

So, again, for those states with high unemployment rates where a lot of folks are receiving some of these unemployment benefits - in a state like Nevada, for example, Nevada is going to receive a huge hit to their local economy. And then, of course, this is just going to ripple at scale across the entire country. As folks have less money, they're not going to be spending it.

MARTIN: Kristin, is there any evidence that all this has put pressure on employers to boost wages? You know, we hear these reports that people are just reassessing whether or not it's worth it to return to a minimum wage job.

MYERS: That's a really great point and a great question because we have heard - is this labor market - and it's a little bit of an interesting scenario where we do have millions of people that are out of work, but we do hear from jobs. We do hear from employers saying that they do need workers. And they have gone out. Just anecdotally, even from folks that I've spoken with - that have said that they are increasing wages to really entice workers back to the office. But the point is well taken. For some of these low-income workers, what we are hearing is that they are not willing to perhaps put their lives on their line, especially if they're a frontline worker, for incredibly low pay. And so we are seeing right now that companies are having to give bonuses, for example, to get folks to come back to work. They are having to boost salaries to get people to come back to work or at least trying to lure some workers away from some companies to their jobs.

MARTIN: And we should just point out, these unemployment benefits were put in place to help people because of the pandemic. And the pandemic is not over, right?

MYERS: Not over at all. And we don't yet know how the delta variant and other potential variants are going to weigh on the labor market going forward, if it's going to force delays to the work - delays to the return to office and perhaps other lockdowns.

MARTIN: Kristin Myers, editor in chief of The Balance, we appreciate you this morning. Thank you.

MYERS: Thanks so much. Transcript provided by NPR, Copyright NPR.