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- Enhanced federal unemployment benefits are ending on Sept. 6, although 26 states already scaled back those benefits earlier this year.
- It will be the largest cutoff of unemployment benefits in history, affecting around 7.5 million workers, according to a report by The Century Foundation.
- August was a disappointing month for job growth, with the economy adding just 235,000 positions, the Labor Department reported Friday. Economists polled by Bloomberg predicted 725,000 new hires for August, while a separate Reuters survey had economists predicting 728,000.
A “devastating” unemployment cliff has stripped away extra federal benefits for 7.5 million Americans, according to a report by progressive public policy firm The Century Foundation.
That’s because expanded federal unemployment benefits provided by the American Rescue Plan earlier this year ended on Sept. 6 — if they weren’t already canceled in your state.
In June and July, 26 states opted out of expanded federal benefits programs early, citing concerns that jobless benefits deter people from returning to work — a claim that many, including Andrew Stettner, an unemployment researcher who authored the report, have disputed.
“We’re not finding any evidence of that, but it’s a narrative out there,” says Stettner. “We’ve made a lot of progress on people getting jobs, but we’re not all the way there. There’s very little safety net remaining.”
There’s no indication these enhanced benefits will be replaced or extended now that they have expired. If you’re currently unemployed or have experienced a decrease in income, here’s what you should know about the programs ending and what to do once they’re over.
Enhanced unemployment benefits end on Sept. 6, but the last payable week of benefits may be the week ending Sept. 4 or 5, depending on the state.
What You Need to Know About Expiring Unemployment Benefits
There are three major programs that ended on Sept. 6 in states that did not already cancel them:
- Pandemic Unemployment Compensation (PUC): $300 per week federal supplement that has been paid in addition to full state benefits
- Pandemic Unemployment Assistance (PUA): Benefits for workers not usually eligible for unemployment insurance, such as self-employed workers, freelancers, and other gig workers
- Pandemic Emergency Unemployment Compensation (PEUC): Assistance for those who are still unemployed after exhausting their state benefits
These programs have delivered nearly $800 billion in assistance during the COVID-19 pandemic, and Sept. 6 was the largest cutoff of unemployment benefits in history, according to The Century Foundation Report.
At the same time, the resurgent Delta variant threatens to keep workplaces and businesses closed, complicating the job market even further. The latest jobs report showed the economy added 235,000 positions in August, significantly lower than economists anticipated. August had the fewest job gains since January, but the unemployment rate dropped in line with estimates by economists polled by Reuters, from 5.4% to 5.2%.
“It’s definitely impacting job seekers and their willingness to jump into jobs that are going to put them at risk of infection, and it’s affecting the economy,” says Stettner. “Conferences are being canceled; live events are being canceled.”
Those most affected by the cutoff are solely or mostly relying on federal unemployment benefits for income. That includes the long-term unemployed who have already surpassed the standard number of weeks allotted for state benefits and people who lost work due to COVID-19 who are not usually eligible for unemployment insurance, such as gig workers and caregivers.
Within those two categories, Black and Latinx workers in frontline businesses, women, and other caregivers will get hit even harder, Stettner says. “The data shows they have been the least likely to be able to stock up on the stimulus and child tax credit or have emergency savings, so they’re the ones that are going to be affected a lot,” Stettner says. “And we know there’s a lot of discrimination out there, so it’s harder for them to find jobs.”
How to Prepare For When Extra Unemployment Benefits End
If you’re relying on expanded unemployment aid, don’t count on more relief coming. Instead, focus on what you can do now to better your financial situation and develop a plan moving forward.
Stay Informed on Your State’s Unemployment Programs
States will continue to run their traditional unemployment programs with varying rules, weekly benefit amounts, and timelines. Make it a priority to keep track of your benefits and closely monitor your state’s unemployment site for updates.
If you can’t make progress with your state unemployment office, you can try contacting your state representative or senator. Connecting with other unemployed workers in your state, often in the form of Facebook groups, can also be an effective way to stay informed about your state unemployment benefits.
Start Looking for a Survival Job
If you’re struggling to find a job in your field, try looking for a temporary “survival” job to start earning some income. This can be anything, from something you’ve done in the past to babysitting or dog walking, while you look for a new job that lines up with your long-term career goals. If you’re not sure where to start, check for local and Internet resources that you have not yet tapped.
Reach out to your local unemployment office to see if they can help you find opportunities in your area or begin your search online at CareerOneStop, a job search website sponsored by the Department of Labor. You can also check out available jobs in your area through other online platforms such as LinkedIn, Indeed, and Snagajob, among others.
If you’re worried about reliable transportation or don’t have any, you may be able to take advantage of Lyft’s Jobs Access Program, depending on where you live. It offers free rides to individuals for job interviews, employment training programs, and the first few weeks of work.
Revisit Your Finances
You may have already trimmed your budget down during the pandemic, but now is a good time to make it even leaner. Re-evaluate your spending, plan for how you’ll meet your basic needs once the benefits expire, and try to cut back any non-essentials until your income is more stable. As you’re able, put away as much money as you can into your savings. These changes may seem unnecessary, but they can make a significant difference in your budget if you’re facing lost income.
You can also reach out to your credit card issuers and lenders to see if you qualify for any pandemic-related relief or forbearance programs. If you have an emergency fund, prepare to use it over the next few weeks or months until you have a more steady income. If you don’t have an emergency fund but have a 401(k), you may be able to tap into it penalty-free via loans or even special hardship withdrawals through Sept. 31. If you aren’t eligible, consider withdrawing from your 401(k) only as a last resort.
Lean on Other COVID-19 Relief Programs
Whether you’re newly unemployed or dealing with long-term job loss, there is other COVID-19 aid that you can lean on right now.
For example, if you’re struggling to pay rent, speak to your landlord to see if you can work out a repayment plan as soon as possible. There may also be rental assistance programs in your city or state that you qualify for, and some states are still offering utility assistance. To find rent relief programs in your area, check out these databases:
- National Low Income Housing Coalition (NLIHC) database
- U.S. Department of Treasury database
- Consumer Finance Protection Bureau database
Struggling homeowners can ask their mortgage lenders about COVID-19 forbearance, which has a Sept. 30 deadline to apply. Student payments and interest are on pause until Jan. 31, so if you have student loans, don’t make any payments on your loans and save what you can.
Food assistance programs like SNAP and TANF can also help supplement your spending on necessities. If you’re struggling with the cost of child care, you may be able to get help through local and state programs.
You can also take advantage of Child Tax Credit payments if you qualify, which give families up to $3,600 per eligible child in monthly installments through the rest of the year, and the rest next year once they file their 2021 tax return. If you qualify, these are six smart ways to use your Child Tax Credit payments, according to experts.
Ask for Help
Know that it’s OK to ask for help if you’re struggling financially. Your circle of friends, family, or work colleagues may be able to temporarily help you out if you talk to them about your situation.
Maybe they can loan you some money for you to get by or help you find some income. You can also seek assistance from organizations in your community, such as local food banks, charities, and nonprofit centers.
Your mental health is just as important as your financial health, so give yourself some breathing room if you’re feeling any guilt or shame related to your finances during the pandemic.
What Happened in States That Cut Off Jobless Benefits Early?
Roughly half of U.S. states halted federal unemployment aid earlier this summer, aiming to incentivize more people to get back to work. At that time, the U.S. economy began seeing new signs of life and the job market was in full recovery mode, even though many businesses — especially in retail and dining — were still struggling to fill jobs. That was before COVID-19 cases began to surge again due to the Delta variant, which has brought new uncertainty to the economy and job market.
Several recent studies suggest that removing enhanced unemployment benefits had little meaningful impact on job-finding of unemployed workers. In fact, the research shows that most people living in states that cut off benefits early haven’t rushed back to work.
Labor Department data released in August shows job growth was similar between states that cut enhanced jobless benefits and states that kept the benefits. “Even in states that have cut off benefits early, businesses still can’t find workers. Something else is going on,” Stettner says.
In a July Census Bureau data study, Arindrajit Dube, a University of Massachusetts economist, found that adults receiving extra unemployment benefits fell by 2.2% in the states that ended their programs early. But employment didn’t increase among that group; adults with a job fell by 1.4% over the same period. Meanwhile, employment rose by 0.2% in states that didn’t end unemployment insurance at that time.
An earlier study in 2020 by Yale researchers concluded that the initial $600 extra in federal aid per week at the start of the pandemic didn’t stop people from finding work.
As for what the future holds once these extra benefits end, Stettner says it’s unclear but “there’s been no serious effort to extend the benefits.” He wants to see “more aggressive action from the Biden administration” now and in the future to help Americans who continue to experience unemployment.
“We can’t forget these people,” he says.