Seven Million Americans May Lose Unemployment Aid After Labor Day

For many Americans, next week represents a looming monetary cliff with the potential to significantly impact their financial situations, as more than seven million Americans are set to lose their unemployment aid, as well as the weekly $300 federal supplement to the traditional benefits, immediately after Labor Day. This comes despite the increased challenges that the COVID-19 delta variant poses to the current economic recovery.

President Biden ruled out an extension of the programs before the delta variant surged, stating in July that it would “make sense” for them to end in September. However, if he decided to extend the unemployment benefits, Congress would need to pass legislation, which would likely face opposition from both Democrats and Republicans.

Senator Joe Manchin (D-W.Va.) stated that he is “done with extensions,” according to The Hill. “The economy is stronger now, the job market is stronger. Nine million jobs we can’t fill. We’re coming back.”

In July, the unemployment rate fell from 5.9 percent to 5.4 percent and the U.S. added 943,000 jobs. However, while the unemployment rate for white Americans fell to 4.8 percent in July, the Black unemployment rate dropped from 9.2 percent to a still-high 8.2 percent.

“Our long-term unemployed, our Black and Latinx workers continue to need these benefits because, due to systemic racism, they face longer periods of unemployment,” said Jenna Garry, senior staff attorney at the National Employment Law Project. “By cutting this off, we’re going to exacerbate the inequity that already exists within our economy.”

Of the more than seven million set to lose their benefits, 4.3 million are gig workers and contractors who receive Pandemic Unemployment Assistance, and 3.2 million are Americans receiving Pandemic Emergency Unemployment Compensation. Everyone receiving traditional unemployment benefits will lose the $300 weekly boost in payments.

It is uncertain how the delta variant will affect the U.S. economy over the next few months as activities move indoors, but it could take weeks to renew the pandemic unemployment programs.