The government is setting hard-hit Americans up for disaster by forcing them to pay back unemployment benefits

an unemployed worker holds a sign that says  I Am angry as hell Fix Unemployment Now,'
Odirus Charles holds a sign that reads, ‘ I Am angry as hell Fix Unemployment Now,’ as he joins others in a protest on May 22, 2020 in Miami Beach, Florida.

  • Americans have been forced to figure out how to pay their bills as unemployment insurance ends.
  • Now, states are demanding that people pay back their unemployment benefits.
  • It’s creating a situation where people are wondering how they’re supposed to live.
  • Eoin Higgins is a journalist in New England and a contributing opinion writer for Insider.
  • This is an opinion column. The thoughts expressed are those of the author.
  • See more stories on Insider’s business page.

Brandel Cook lost his job during the pandemic and had to go on unemployment. Now, the state of Missouri wants him to repay $4,500.

“They want me to repay $900 for the state benefits, that was $67 weekly [$75 pretax], and the Federal Pandemic Unemployment Compensation of $3,600, the $300 a week,” Cook told me in a recent interview.

Cook’s tale of woe is one of many. For months now, people have complained of unfair demands for repayment on their unemployment benefits as the country has tried to put the COVID pandemic behind it.

In February, TikTok user thatgirlkelsie_98 went viral for a video in which she expressed disbelief over a demand from the state to recoup $4,620 of the $10,000 they paid her in benefits. As she put it, “how is anybody ever supposed to fucking live” in a system that makes debt a way of life, even during a global pandemic?

It’s not just the human cost of the repayment demands that are causing instability and pain around the country. The US economy is poised to suffer lower consumer demand, a direct result of the unpredictability of the virus and the cash crunch from premature shutting down of unemployment benefits.

As the delta variant continues to surge across the nation and the government turns to more strict mandates to get the pandemic under control, many working Americans are left with uncertainty and worry over their financial situation. Telling them they have to pay back some of the benefits that kept them afloat during the pandemic is just making things worse. I’ve talked to people facing these repayment demands – here’s what they told me.

Less money, more problems

Many state unemployment systems use outdated technology and were overwhelmed by the sudden flood of unemployment claims made when the pandemic broke out. Now, months or a year later, these same flawed systems have gone back and flagged some of these payments as supposedly incorrect or that the application was accepted “in error.”

According to a July report from the federal Government Accountability Office, $12.9 billion worth of overpayments went out from the Treasury during the pandemic – just 2% of all unemployment funds sent out during that time. According to the same report, only a small fraction of that overpayment is attributable to fraud, a large majority was simple accounting or clerical error.

But instead of erring on the side of going after the actual fraudsters and reasoning “well that may have been too generous, but it was helpful for the economy,” the government is demanding that workers – many of them still in precarious financial positions – pay the money back.

Cook, who lives in the city of Neosho, Missouri, was working as a bartender at a local movie theater when COVID swept through the state. The pandemic put him out of a job, but state and federal unemployment got him through the worst of it. But on March 27, 2021, Missouri determined Cook was actually ineligible for the benefits he had received due to limited availability.

“In the Overpayment Determination, they said that this is the result of my Unintentional Error or Omission,” Cook said. “I honestly have no idea how this could have happened and I’m sure I filled out the weekly application form correctly.”

Cook added that he wasn’t contacted over the actual error, but he did receive a email at 2 a.m. telling him he had new correspondence from the unemployment office.

He has until September 23 to appeal.

But appeals take a while, as Jennifer Reyes, a restaurant worker in Ohio who is dealing with her state’s attempts to recoup unemployment benefits it paid her, found out. Reyes was only out of work briefly – from March 16 to May 26 of 2020 – but the benefits she was provided to survive were still essential. Now, she’s being told to pay it all back.

“They claimed I owed 100% of my UI back which is about $5,000,” she told me. “My job was actually shut down and I’m high risk.”

After calling repeatedly, Jennifer got a link to appeal online, which is now being processed. She hopes it goes her way, but said it’s a “pain” and that she believes that’s on purpose.

“I think the state is just hoping enough people freak out about all the warnings about garnishments and just pay it back so the state can recoup some money,” Jennifer said. “It’s bullshit.”

An unfair demand

Unemployment insurance has been a constant political issue since the beginning of the pandemic. The life-saving financial aid helped keep people afloat as COVID spread around the country, but as the economy began to reopen, some employers and conservative politicians have called for doing away with the benefits in order to force Americans back to work.

“The extra unemployment benefits need to be immediately ended,” James Gop, owner of catering business Heirloom Fire, posted on Facebook in June. “Businesses are suffering badly.”

While Gop – a farm-to-table innovator who has appeared with Martha Stewart and on Netflix’s “The World’s Most Amazing Vacation Rentals” – and other business owners may find the idea of people continuing to utilize benefits abhorrent, the life-saving aid has helped keep the economy going, and the absence of the benefits has made their importance even more clear.

As Insider reported in August:

“The impact of cutting off those benefits was a 20% reduction in weekly spending for individuals – which comes to about $145 every week. And those jobless workers also saw a big hit to their wallets, losing $278 in weekly benefits, with weekly earnings only up $14.

All told, the researchers found that, for every dollar in benefits, spending went down by $0.52 (and each dollar lost only saw an accompanying $0.07 rise in new income). Across the states, that translated to a $270 million increase in earnings – but consumer spending fell by $2 billion.”

But the economic pain isn’t isolated to the cuts in benefits. Jobs numbers for August fell well short of expectations, raising concerns about the economy’s recovery as the delta variant rages around the country and a small, but statistically important, minority of Americans refuse vaccines.

Even as the pandemic continued to devastate regions of the country, the federal government’s Pandemic Unemployment Assistance, already cut from $600 to $300 a week, expired on September 5. Without aid, without job prospects, and with states demanding repayment for benefits already disbursed, workers are set up to be even worse off this year than they were at the height of the pandemic.

Reyes, the server in Ohio, told me that the drop in aid has had a noticeable effect on business at the restaurant she works at.

“Now that the enhanced unemployment is done we have had a significant drop in business,” Reyes said. “I mean, servers are making at least $100 less a shift than we normally do. And we no longer have waits on Fridays and a very short wait on Saturday. We are fully staffed, but people aren’t coming in.”

Rather than demand Americans repay the benefits that kept them whole during a once-in-a-lifetime crisis, states should be demanding the federal government ensure that the pandemic assistance that expired is restarted. The human cost of cutting the benefits off and forcing Americans to pay them back might not be enough to move the needle – but the economic cost might.

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US jobless claims drop to pandemic low of 310,000 as federal unemployment benefits expire

Unemployment filing coronavirus
Ashley Testerman helps John Jolley resolve his unemployment claim at an unemployment event in Tulsa, Oklahoma on July 15, 2020.

  • Weekly jobless claims fell to 310,000 last week, setting a fresh pandemic-era low.
  • Economists expected claims to slide to 335,000. The print marked a second straight weekly decline.
  • Continuing claims fell to 2.78 million for the week that ended August 28, landing just above estimates.
  • See more stories on Insider’s business page.

Filings for unemployment insurance fell last week as the government’s boost to UI payments expired nationwide.

Initial jobless claims totaled 310,000 last week, the Labor Department announced Thursday. Economists surveyed by Bloomberg expected filings to decline to 335,000. The print marks a second straight decline and places claims at a new pandemic-era low.

The previous week’s count was revised to 345,000 from 340,000.

Continuing claims, which count Americans receiving unemployment benefits, declined to 2.78 million for the week that ended August 28. That landed above the forecast of 2.73 million claims and marked a sixth straight pandemic low.

The latest claims data covers the last week before enhanced unemployment benefits lapsed. The federal government had been supplementing states’ UI payments with a $300-per-week benefit since the American Rescue Plan was approved in March. That boost expired on September 6, leaving about 7.5 million jobless Americans with less support as virus cases soared higher.

The pullback in UI support comes as claims sit at historically elevated levels. Jobless claims are still well above their pre-pandemic trend of 200,000, and continuing claims need to drop by another million to return to their past average.

The cutoff didn’t affect every state at once. Twenty-six state governments had already pared back the supplement prematurely, with many arguing the move would push more Americans into the workforce. Yet research suggests the early pullback in UI support harmed local economies more than it helped. Analysis from The Wall Street Journal found “roughly similar job growth” in states that did and did not end benefits early. And Homebase researchers found that employment actually fell in states that slashed UI ahead of schedule.

The Biden administration has said that states can continue to provide boosted UI payments on their own with leftover funding from the American Rescue Plan. Yet no state has committed to taking such action, Insider’s Juliana Kaplan and Joseph Zeballos-Roig reported, and it’s unlikely Democrats can pass another salvo of enhanced UI.

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Today is the last day that many unemployed workers can claim federal benefits – and states probably won’t be renewing them

Unemployment protest
  • Saturday, September 4 is the last day many jobless people can claim federal unemployment benefits.
  • At least 7.5 million people are going to lose a steady source of income at a perilous stage in the pandemic.
  • Congress and President Biden have shown no interest in renewing the benefits.
  • See more stories on Insider’s business page.

Federal unemployment benefits expire on September 6, but many unemployed Americans will be claiming them for the last time today.

That’s because the expiration comes on Monday, making it so many workers can’t claim benefits for the week following September 6. Instead, as Insider previously reported, they can only claim benefits for the prior week – and many states end their claim weeks on Saturday or Sunday.

It’s not just the additional $300 weekly distribution that jobless workers are set to lose. Also expiring are two different pandemic-era programs that expanded both who’s eligible for benefits and how long they can receive them.

That means that newly eligible unemployed gig workers and freelancers will completely lose their benefits, as well as those who were still receiving benefits after exhausting their states’ allocation.

Those groups of people will be deprived of a steady source of income as the Delta variant sparks a surge of infections and hospitalizations in many parts of the country. The development is renewing concerns among many economists that the new pandemic wave could set back the recovery.

“I feel like they should not end any benefits until at least there is a vaccine for all ages of the people in America,” Amanda Rinehart, an unemployed mother in Pennsylvania, previously told Insider. Her child is at high risk for COVID-19 and too young to receive a vaccine, meaning Rinehart will have to continue to stay at home to oversee virtual learning.

Most Democrats aren’t interested in renewing the federal aid, which many economists credit with propping up the economy and workers through perilous stretches of the pandemic. Early rumblings from progressive lawmakers like Rep. Alexandria Ocasio-Cortez – who opened the door on pushing for an extension – have subsided. Republicans are staunchly opposed to the bulked-up benefits, arguing the generous aid is dissuading people from seeking new jobs.

In an August letter, Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh confirmed that federal benefits would end on September 6. However, the letter also said that states could use leftover funds from the American Rescue Plan to extend benefits on their own. Further guidance from the Department of Labor obtained by Insider said states could issue one-time or period payments to impacted workers.

But no states have committed to extending benefits. California has issued one-time stimulus payments to a majority of its residents, partially subsidized by Biden’s first stimulus package.

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US jobless claims slide to fresh pandemic-era low of 340,000

job fair marshalls
  • Filings for unemployment benefits slid to 340,000 last week, setting yet another pandemic-era low.
  • Economists surveyed by Bloomberg expected claims to total 345,000.
  • Continuing claims fell to 2.75 million for the week that ended August 21, coming in slightly below estimates.
  • See more stories on Insider’s business page.

The number of Americans filing for unemployment insurance fell last week, reversing the previous period’s climb and reaching a new pandemic low.

Weekly jobless claims totaled an unadjusted 340,000 last week, the Labor Department said Thursday. The median estimate from economists surveyed by Bloomberg saw claims sliding to a pandemic low of 345,000. The reading places claims at the lowest level since March 2020 and marks the second decline in three weeks.

The previous week’s total was revised to 354,000 from 353,000.

Continuing claims, which track Americans receiving unemployment benefits, slid to 2.75 million for the week that ended August 21, according to the report. That came in below the median forecast of 2.81 million claims. It also marked the fifth straight pandemic low for continuing claims.

The latest claims data covers the second-to-last week before the federal boost to unemployment benefits lapses. The government’s $300-per-week supplement will end on September 6 for the 24 states that haven’t cut the benefit early. While states prematurely ending the boost have argued the move would push more Americans into the workforce, several studies have since suggested the early cutoffs hurt local economies and did little to accelerate hiring.

The cancelation will also come while claims remain historically elevated. Weekly counts are still well above the pre-pandemic average of 200,000, and continuing claims need to fall by another million before meeting the pre-crisis norm.

In other labor-market news, hiring in the country’s private sector badly missed expectations in August. Private payrolls rose by 374,000 last month, ADP said in its monthly employment report. While the print marks a small uptick from July payroll growth, it fell well short of the 613,000-payroll forecast.

Hiring was likely dented by the surge in Delta cases and reinstatement of some mask-wearing rules. Daily case counts ended August at the highest point since January, when the virus’s winter resurgence was in full swing. The rebound in cases also cut into Americans’ hopes for the recovery, which likely slowed the recovery further.

“The Delta variant of COVID-19 appears to have dented the job market recovery,” Mark Zandi, chief economist of Moody’s Analytics, said in the ADP report. “Job growth remains inextricably tied to the path of the pandemic.”

Still, forecasts for the government’s nonfarm payrolls report remain promising. Economists expect the Friday jobs data to show 750,000 jobs added, and for the unemployment rate to slide to 5.2% from 5.4%. July’s jobs report trounced forecasts after ADP’s missed expectations, leaving a positive surprise in the cards for Friday morning.

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3 reasons it’s ‘too soon’ to cut off expanded unemployment, according to Brookings

Unemployment protest
Unemployed people at a rally last year in Philadelphia, Pennsylvania.

  • It’s “too soon” for the US to cut boosted unemployment benefits, the Brookings Institute said Wednesday.
  • The aid is set to lapse for 7.5 million Americans early next month, and Congress is unlikely to extend it.
  • The think tank says letting it expire would widen inequality and slow the recovery without fixing the safety net.
  • See more stories on Insider’s business page.

Letting federal unemployment benefits expire in September will do far more harm to the US than good, the Brookings Institute said Wednesday.

Critical support for some 7.5 million unemployed Americans currently hangs in the balance, according to estimates from the left-leaning Century Foundation. A handful of federal programs that boost unemployment insurance are set to expire on September 6, cutting off aid that’s been in place since the CARES Act was approved in March 2020.

President Joe Biden has already punted the issue to Congress, and lawmakers are unlikely to renew the programs over the next two weeks. Rep. Alexandria Ocasio-Cortez told Insider’s Joseph Zeballos-Roig this week that progressives are “looking into” an extension, but she said it won’t happen before Labor Day and the Senate and White House seem reluctant to extend.

Letting it lapse is a mistake, and its consequences will ripple throughout the economy, Annelies Goger, a fellow at Brookings’ Metropolitan Policy Program, wrote. It’s “too soon” for the federal programs to lapse, and arguments in support of a September expiration are short-sighted, she added.

She laid out three reasons why, in her words, it’s just too soon to end it.

1. It just isn’t the reason for the labor shortage

Geiger dismissed the criticism that the UI boost exacerbated the nationwide labor shortage.

There is simply “little evidence that higher pandemic UI benefits have been a major source of employers’ problems in finding workers, or that those difficulties are widespread,” she wrote. Likewise, she said little evidence supports the argument that cutting it early increased employment.

Conservative lawmakers have railed against the aid for months, saying it disincentivized Americans from taking jobs and fueled lackluster hiring in the spring. The argument also led 26 states – all but one led by Republican governors – to prematurely cut the federal supplement.

The move was marketed as a way to push Americans into the workforce, but recent data suggests it had negative effects. Researchers found the cutoff led to a 20% drop in individuals’ spending, and total spending dropped by $2 billion in states ending the benefit early. At the same time, just 4.4% more workers in early-out states had jobs compared to peers in states keeping the boost intact.

2. The safety net isn’t fixed yet

Letting the benefit expire in September would also leave several problems with the UI program unfixed, according to Goger. Each state runs its own UI system, leaving the safety net “riddled with inequities, cumbersome processes, and outdated technologies.”

For one, several kinds of workers were left out from traditional UI. Domestic and agricultural workers weren’t able to benefit, and gig workers have only been included as a pandemic-era exception. The programs also exclude people who just started paid employment, reduced their work hours, or faced disruptions that cut into their ability to work, Goger said.

Differences between states’ programs also harm workers, hurting racial minorities and the long-term unemployed the most. The country’s poorest are frequently trapped in joblessness without adequate support, Goger said.

Reverting to pre-pandemic UI systems next month would doom the programs to suffer the same problems they’ve had for decades, Goger said, while replacing the state programs with a single federal system could allow for more equitable and efficient unemployment insurance.

(3) It will make inequality worse and hurt the economy

Doing nothing on UI would also worsen inequities throughout the economy, she added.

The benefit helped some of the hardest-hit Americans stay afloat, but most are still far from fully recovered. The labor shortage suggests swaths of workers are changing careers, and removing the UI safety net amid that shakeup could throw millions into economic disarray. Keeping the program intact would ensure those transitions can safely take place, especially when the Delta wave is slowing the pace of recovery, Goger said.

She wrote that the “broader ecosystems of safety net programs, services, data, and prevention strategies are critical infrastructure for a well-functioning, more inclusive economy,” and that ought to be the point of unemployment insurance. The job is unfinished.

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US jobless claims climb for first time in 5 weeks, to 353,000

Unemployment line
People line up outside Kentucky Career Center prior to its opening to find assistance with their unemployment claims in Frankfort, Kentucky, U.S. June 18, 2020.

  • US jobless claims jumped to 353,000 last week, just above pandemic lows but the first increase in five weeks.
  • Economists had expected claims to rise slightly to 350,000.
  • Continuing claims fell to 2.86 million, but fell short of the 2.76 million claims estimate.
  • See more stories on Insider’s business page.

Filings for unemployment insurance jumped from pandemic-era lows last week as the country crept closer to the expiration of federal UI aid.

Weekly jobless claims reached an unadjusted 353,000 last week, the Labor Department announced Thursday morning. That compares to a median estimate of 350,000 claims from economists surveyed by Bloomberg.

The print interrupts four straight weeks of declines. The previous week’s count was revised to 349,000 from 348,000 and still marks the lowest reading since the pandemic drove claims higher.

Continuing claims, which count Americans actively receiving unemployment benefits, fell to 2.86 million for the week that ended August 14. That missed the median estimate of 2.76 million claims. Continuing claims set a pandemic low that week and have generally declined more consistently than weekly claims.

While claims sit far lower than they did just months ago, they remain nearly twice their pre-pandemic levels. Weekly counts have been among the most closely watched indicators of the labor market’s recovery, despite their volatile nature.

The latest reading also comes mere weeks before the federal boost to UI lapses. A handful of programs created by Congress have augmented weekly benefits payouts since the pandemic began early last year, but they’re set to expire in September. The Biden administration reiterated earlier this month it would let the programs expire, and Democrats are unlikely to extend the benefit further.

Twenty-six states announced plans to prematurely slash the benefit, with many arguing the move would push more jobless Americans into the workforce.

Yet a new study suggests the early cuts did more harm than good. Researchers at University of Massachusetts Amherst, Harvard University, Columbia University, and University of Toronto found the reduction of benefits drove a 20% drop in recipients’ weekly spending and did little to improve hiring, with only 4.4% more workers in early-out states taking jobs compared to peers in states that kept benefits.

“Clearly, if it had been the case that more people losing benefits were easily able to transition into paid work, you wouldn’t see that sort of reduction and sharp reduction in spending, but that’s what you saw,” Arindrajit Dube, an economics professor at UMass Amherst and of the paper’s authors, told Insider’s Juliana Kaplan.

The Brookings Institute joined some Democrats and millions of unemployed Americans on Wednesday in arguing for an extention of the federal support. There is little evidence the boosted benefits are behind the labor shortage, Annelies Goger, a fellow at Brookings’ Metropolitan Policy Program, said in a report. The premature cutoff also stands to worsen economic inequality at a time when the recession’s fallout is already extremely uneven, she added.

“This return to ‘normalcy’ will penalize many of the workers who the pandemic impacted most severely,” Goger said.

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Biden won’t extend $300 boost to weekly unemployment benefits past September

Joe Biden
President Joe Biden.

  • Janet Yellen and Marty Walsh confirmed Biden’ won’t extend federal unemployment benefits past September.
  • They wrote in a letter that Biden still supports states using stimulus funds to help the unemployed.
  • 26 states, all but one governed by Republicans, moved to end the unemployment boost early.
  • See more stories on Insider’s business page.

As part of his American Rescue Plan, President Joe Biden extended $300 weekly unemployment benefits through September 6. Top officials in his administration confirmed on Thursday that he won’t be extending the benefits any further.

Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh wrote a letter to the chairs of the House and Senate finance committees with an update on where unemployment benefits stand. They wrote that although the weekly benefits have been a “critical lifeline” for millions of unemployed Americans, a further extension of the benefits – which some Democrats have been pushing for – is off the table.

“The temporary $300 boost in benefits will expire on September 6th, as planned,” Yellen and Walsh wrote. “As President Biden has said, the boost was always intended to be temporary and it is appropriate for that benefit boost to expire.”

However, the officials noted that even as the economy is recovering from the pandemic and payrolls are being added to the labor market, unemployed people may still require financial assistance, and the Delta variant could bring economic setback, as well.

That’s why they said the Labor and Treasury Departments will take the following steps to help those are unemployed:

  1. The Treasury is reaffirming that states can use what they received from the $350 billion in stimulus aid to provide additional support for unemployed people beyond the expiration of the benefits;
  2. Labor will communicate with states on how they can best use their “existing UI (unemployment insurance) infrastructure” to support state-funded benefits using stimulus funds;
  3. And Labor is announcing $47 million in new grants to support reemployment services for all Americans.

Yellen and Marsh also wrote the pandemic has exposed “serious problems” in the UI system that requires reform, which is why Biden is asking Congress to consider long-term reform of UI in Senate Democrats’ $3.5 trillion reconciliation bill.

“The President has already laid out his principles for such reform: he believes a 21st century UI system should prevent fraud, promote equitable access, ensure timeliness of benefits, provide adequate support to the unemployed, and automatically expand benefits in a recession,” they wrote.

After a weak April jobs report, 25 GOP-led states – and one governed by a Democrat, Louisiana – moved to end unemployment benefits early for their residents because they believed the benefits disincentivized work. According to an analysis from the left-leaning People’s Policy Project, over 20 million Americans will lose their benefits when the September expiration rolls around.

Insider’s Joseph Zeballos-Roig and Juliana Kaplan reported that the Delta variant has people begging for more benefits, given that the variant could jeopardize the return to work. But even before Yellen and Walsh’s announcement, moderate Democrat Joe Manchin of West Virginia told Insider he would not support a further extension of the benefits in a reconciliation bill, suggesting a slim likelihood of it passing through Congress.

“I’m done with extensions,” he said. “The economy is coming back.”

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Fox News’ Laura Ingraham suggests cutting off federal unemployment benefits to push people back to work: ‘Hunger is a pretty powerful thing’

Lauren Ingraham Jon Taffer
Fox News host Lauren Ingraham and “Bar Rescue” host Jon Taffer.

  • Fox News host Lauren Ingraham had a suggestion to push people back to work.
  • “What if we just cut off the unemployment?” she said, adding, “Hunger is a pretty powerful thing.”
  • Three separate analyses indicate that cutting off unemployment benefits didn’t lead to substantial job growth.
  • See more stories on Insider’s business page.

Fox News host Lauren Ingraham had a suggestion on her program Thursday evening to bolster employment growth.

“What if we just cut off the unemployment?” she said, adding, “Hunger is a pretty powerful thing.”

She veered between acknowledging the hardship some people face and encouraging them to find a job. “I’m talking about people who can work, and refuse to work,” she said.

Bar Rescue host Jon Taffer responded: “They only feed a military dog at night, because a hungry dog is an obedient dog. Well, if we are not causing people to be hungry to work, then we’re providing them with all the meals they need sitting at home.”

However, 26 mostly GOP-led states have already cut off federal unemployment benefits in a bid to press people back to work. The results of that step may not be having the intended results.

Three different analyses from UKG, Homebase, and Indeed indicated that cutting off jobless benefits didn’t lead to a substantial increase in employment or job growth.

The Homebase analysis also indicated employment grew faster in states that kept the jobless benefits compared to those that ended them early.

Two components of the shortages, per a recent Morgan Stanley note, include school closures and a mismatch between the industries that are hiring and the workers seeking jobs.

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Sen. Joe Manchin signals he won’t back renewal of federal jobless aid for gig workers and long-term unemployed past Labor Day

Sen. Joe Manchin face
Sen. Joe Manchin (D-W.Va) on Capitol Hill.

  • Sen. Joe Manchin indicated he would not back a renewal of federal aid programs for gig workers and long-term unemployed.
  • “I’m done with extensions,” he told Insider. “The economy is coming back.”
  • His opposition would effectively kill the extension of those programs set to expire on Labor Day.
  • See more stories on Insider’s business page.

Sen. Joe Manchin of West Virginia indicated on Saturday he would not back including an extension of federal aid for gig workers and long-term unemployed Americans past Labor Day in a Democrat-only package.

“I’m done with extensions,” he told Insider. “The economy is coming back.”

Manchin went on: “Look guys, read your own print. Read your own print. The economy is stronger now, the job market is stronger. Nine million jobs we can’t fill. We’re coming back.”

The West Virginia senator’s opposition would effectively kill the renewal of those federal aid programs, given all 50 Senate Democrats need to back the party-line bill for it to clear the upper chamber. Democrats are drafting the initial bill, which will pass through the reconciliation process requiring only a simple majority vote sometime this fall.

Nearly 9.4 million people are currently receiving benefits through a pair of pandemic-era federal initiatives: Pandemic Unemployment Assistance (PUA), which expanded benefit eligibility to gig workers. Then Pandemic Extended Unemployment Compensation (PEUC) extended how long recipients could collect benefits for. Jobless people also qualify for a $300 federal weekly unemployment supplement.

The measures were extended in President Joe Biden’s stimulus law, but those will end on Sept. 6. A recent report from Andrew Stettner at the left-leaning Century Foundation projected that 7.5 million people would lose all their jobless aid if Congress didn’t step in.

The number of unemployment claims has steadily fallen as the economy regained jobs and people returned to work. New jobless claims slid to 385,000 last week in a fresh sign that the economy is recovering from the devastation of the pandemic. The latest jobs report on Friday showed the US added 943,000 jobs in July.

But concern is mounting among experts that the surging Delta variant of COVID-19 may harm the recovery. Jason Furman, formerly a top economist to Barack Obama, said in a recent interview that he supported extending the programs past Sept. 6 and “grandfathering” current recipients.

“I would also seriously consider extending the programs and possibly making them contingent on caseload and hospitalization numbers,” Furman, now a Harvard professor, said.

Other Democrats favor extending those programs, like Senate Finance Committee Chair Ron Wyden of Oregon. “We’re gonna put out all the stops,” he told Insider on Friday. “We’re gonna work on filling the immediate gaps of gig workers and others.”

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How unemployed Americans scored a big last-minute win in Biden’s infrastructure bill, cutting a $50 billion measure that could have stripped their benefits

Biden infrastructure bipartisan Senate group at White House
President Joe Biden at the White House with a bipartisan group of senators.

  • A bipartisan Senate gang dropped a $50 billion measure to generate money from slashing fraud in unemployment.
  • Experts had raised concerns that jobless people would be booted from safety net programs as a result.
  • One says paying for infrastructure by repurposing unemployment aid is “funny money” that can’t be done.
  • See more stories on Insider’s business page.

Unemployed Americans notched a major last-minute win in President Joe Biden’s $1 trillion infrastructure bill.

During the tumultuous negotiations, a bipartisan gang of 10 Senate Democrats and Republicans had initially eyed netting $50 billion in revenue from shoring up the “integrity” of unemployment insurance and cutting down on fraud.

Some experts and advocates raised doubts that fraud even cost that much – and that fraud measures could worsen the lives of jobless Americans already struggling with ailing UI systems. But that provision is no longer in the bill that was released on Sunday evening after weeks of discussions, possibly due to a budgetary snag.

“At the end, there’s a lot of back and forth on what would be in and what would be out,” Sen. Lisa Murkowski of Alaska, one of the GOP negotiators, told Insider. “That’s one of the things that, as they say, was left on the cutting room floor.”

Sen. Mark Warner of Virginia, a Democratic negotiator, said it was omitted because it seemed likely that it wouldn’t show up as a major source of federal funding in a budget score from the nonpartisan Congressional Budget Office, particularly if states kept the money. Republicans want the bill to be fully paid for and not grow the deficit.

“There was some scoring problem if you have a kind of incentive for the state to be able to keep some,” he told Insider.

Some experts argued as much.

“I wouldn’t be surprised if they went to CBO, and CBO said the provision was actually going to cost money or raise them close to nothing,” Marc Goldwein, head of policy at the nonpartisan Committee for a Responsible Federal Budget, told Insider.

“I was a little skeptical that putting more money into that would lead to additional savings,” Andrew Stettner, an unemployment expert at the left-leaning Century Foundation, said in an interview, referring to stepping up program integrity measures.

Experts argue that the pay-fors centered on UI wouldn’t even be possible, or raise anywhere close to the money that senators claimed. For his part, Goldwein called it “gibberish,” and said that the proposal to pay for parts of the package with repurposed unemployment insurance was “complete funny money, and it’s totally made up.”

For the bill, lawmakers are attempting to reappropriate $53 billion from states that ended their enhanced unemployment insurance programs this summer. Still, the experts said that federal money can’t be pulled from one bucket and put into another for something else.

“There’s nothing they’re doing in this action that’s reducing the deficit in any way by using this money for the infrastructure bill,” Stettner said. “It’s $53 billion that’s not going to be spent.”

Some unemployed Americans who lost their benefits prematurely told Insider that the proposed repurposing particularly stings, since it’s aid money that could have kept them afloat while cases from the Delta variant surge.

“We were basically thrown under the bus,” Natasha Binggeli, an unemployed worker in South Carolina, wrote in a message to Insider.

She added: “It feels like a knife through the heart from all political parties.”

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