Fourth stimulus checks are unlikely to come. Moreover, other benefits that were approved during the pandemic are also set to expire soon. One such benefit is the extended unemployment coronavirus stimulus checks that are set to expire this weekend.
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Why Won't Unemployment Coronavirus Stimulus Checks Be Renewed?
After about 18 months of federal unemployment relief, this benefit will officially end on September 6. The federal unemployment benefits were added in March last year after state governments started the coronavirus-induced lockdowns.
Congress extended the unemployment benefits twice since last year, as well as increased the number of people eligible for the unemployment benefits. Now, lawmakers are unlikely to extend the benefits again as the unemployment numbers continue to drop.
The jobs data reveals that the U.S. economy has added an average 832,000 new jobs per month for the last three months. Also, the unemployment rate has dropped to 5.4%.
The Biden administration, however, has requested the states with high unemployment rates to continue with the extended benefits to some specific groups, using the funds allocated to the states by the American Rescue Plan. These groups include independent contractors, who don’t usually qualify for state benefits, and the long-term unemployed.
As of now, it isn’t known if the states will comply with the request. In contrast, many states have already ended additional benefits earlier this summer (even before the official Labor Day cutoff). These states include Nebraska, North Dakota, Missouri, Mississippi, West Virginia, Iowa, Idaho, Alaska, and Wyoming.
Many of these states argue that the extended unemployment benefits were discouraging people from looking for work. A recent study, however, suggests otherwise.
This study claims that in states that ended federal benefits early, about 7 in 8 jobless people receiving benefits didn’t found a job by early August. Moreover, the study found that withdrawing benefits early resulted in $2 billion less spending going into the economy.
Millions To Feel The Impact
All the three extended benefits will be expiring this weekend, including FPUC (Federal Pandemic Unemployment Compensation), PUA (Pandemic Unemployment Assistance), and PEUC (Pandemic Emergency Unemployment Compensation).
It is estimated that the end of extended unemployment benefits will affect more than 11 million people, including 8.8 million Americans who will lose the benefits entirely, and about 3 million who will witness a drop in their benefits by $300 a week, according to The Century Foundation.
After this week, these unemployment benefits will return to the pre-pandemic level, and will go only to those who are eligible. From next week, the average person would receive about $321 a week, or about 38% of their pre-layoff wage, the Labor Department estimates.
Extended unemployment benefits may be expiring, but there are other benefits that have been extended, such as the child tax credit (CTC) and rent relief. The value of food stamps would also be increased from next month.
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