Why the Unemployment Cliff Is ‘Economically Insane,’ According to This Workforce Expert

Photo to accompany story about unemployment.
Andrew Stettner is an unemployment researcher for progressive public policy firm The Century Foundation. He co-authored a report finding 12 million Americans will lose federal unemployment benefits on Dec. 26.
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Update: A new $900 billion stimulus and economic relief package extends federal unemployment benefits. The legislation also includes new stimulus payments and other benefits.

Millions of Americans lost critical unemployment benefits on Saturday, Dec. 26.

And it is “economically insane” that the U.S. has failed to extend this safety net, says unemployment researcher Andrew Stettner. For unemployed Americans, it is “beyond cruel,” he says.

Yet here we are.

Despite millions of Americans facing this unemployment cliff, additional Congressional aid is little more than a political debate at the moment. 

The political debate at least shows more people are talking about the situation than were a month ago, says Stettner, who recently co-authored a dire and widely read report outlining the impact of these expiring unemployment benefits for The Century Foundation, a progressive public policy firm.

“But there’s still a lot of partisanship that’s getting in the way,” he says. “People don’t want to go over this cliff, but they just can’t figure out how to drive the places they want to go.”

So where does that leave the millions of people who remain unemployed, who won’t be helped by politicians’ good intentions and ongoing negotiations?

Unemployed workers should start with their state unemployment office, says Stettner, who worked on the Recovery Act in 2009 in response to the Great Recession and who for 20 years has specialized in workforce protections and social insurance programs. 

From there — and for workers not eligible for regular state unemployment benefits — federal unemployment programs enacted as part of the CARES Act in March have provided additional help. But these federal programs are set to expire this month. For Americans who rely on these benefits, it’s time to make a plan to prepare for when they stop.

With no additional aid, many unemployed Americans will go from something to nothing on Dec. 26. For these Americans, Stettner says it’s time to start thinking about survival jobs, while acknowledging the difficulty and health risks of what that looks like in the peak of a pandemic and recession.

Here are some more insights from our interview with Stettner on the current unemployment situation, edited for length and clarity:

NextAdvisor: What’s one thing you’d like people to know about Americans who have had to navigate unemployment this year, and who in many cases are facing this cliff with no relief in sight?

ANDREW STETTNER: People are out of work through no fault of their own. This is like an act of God situation where they’ve lost their job. Many people cannot get back in any shape or form to the kind of work that they are trained to do, because of the pandemic. This is work that’s valued in our society: personal services, hospitality, travel, live entertainment. 

We’ll come back. We’ll have the ability to live in the way that we are accustomed to living. But people need to have some ability to subsist until we get to that stage. It’s beyond cruel. It’s economically insane to not help people who are productive, contributing members of society, to subsist so what they can do well is viable.

What did you hope would happen following the release of your report last month?

There was attention focused, finally, on the end game of these benefits. So that was a positive development. But it just seems like it should be a no-brainer. The economy has not recovered fully … the pandemic is making it more complicated, in terms of additional people being furloughed or trying to find a job. And this environment is becoming more complicated.

What exactly starts happening on Dec. 26 that may not be fully apparent to people?

People are going to go zero in terms of having any income. So people are going to be losing their homes, eviction prevention protections are going to go away, not being able to buy the medicine that they need, having to sell their car, their goods. These are not just suppositions on my part. It’s what we’re hearing.

What is the risk of doing nothing or doing too little right now?

What we’re going to have is a longer recovery. That was a mistake we made in the last financial crisis [following the Great Recession]. We put some money in the stimulus bills … and then didn’t follow it up. And then it took years to get to a recovery. 

We can’t only inject resources when we’re at the bottom of the crisis. People and the economy need aid to get back to the full growth that we want to be at. Full growth is what we need to have broadly shared prosperity, to have our businesses hiring at all cylinders. That’s what we need to have. And we’re making that time longer to deprive the economy of stimulus. 

How is the pandemic and the current unemployment we’re seeing today different than what we experienced during the Great Recession?

The pain has not been equally shared at all. With this recession I think it’s more concentrated than we have typically seen in a recession. And it’s affecting service work. Service work has been generally more recession-proof than it is now.

Is it too easy to chalk it up to broken politics that we’re at such a standstill with more help for unemployed Americans? Is there anything else at play that explains where we are?

Those who are unemployed are less politically powerful. They are people of color and women, and I think that is complicating this. It’s not your blue-collar factory worker, construction worker that everybody has in their district and who Republicans see as their constituents. That’s making it harder, because of who’s affected. And that’s a shame. 

Have we learned anything from past recessions and times of high unemployment that informs where we are today?

Sympathy for the unemployed goes away quickly. We’ve had all this enormous aid that was pushed out to workers in the spring and summer. It was very generous — unemployment on steroids. But by the end of the summer that sympathy was gone. And that was similar to the Great Recession, [when] we had the big Recovery Act, but then people were fighting tooth and nail to get any further assistance. So the sympathy is a short fuse. 

What does 2021 look like? What will you be looking at to assess how things are going?

It’s unknown. I think it’s difficult, it’s very difficult. It’s self-inflicted injury economically, because we know that the better times are here, but until then we’re just shooting ourselves in the foot. We’re making this harder. 

In five or 10 or 15 years, what do you want to look back on and have learned from where we are today?

We can’t let this be the whim of Congress. We can’t let the system be so weak. That it will be a wake-up call to fix this system so it’s there for the workers of tomorrow, not by the whim of Congress but more of a structural system that can respond to these types of emergencies.