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Over 7 Million Americans Set to Lose Unemployment Benefits After Labor Day

August 18, 2021 –  Millions of Americans are set to lose enhanced unemployment benefits on September 7th despite the raging Delta variant and what some argue is an uncertain U.S. economic recovery.  President Biden previously ruled out extending these benefits in July, but last week his White House Press Secretary, Jen Psaki, stated, “a final decision has not been made.”  An extension of these benefits would be most welcome news for millions of traditional employees, gig workers and contractors who are set to lose their pandemic benefits, including the $300 weekly federal supplement to traditional state jobless benefits.  Employers, however, who cannot find staff, may have a different opinion!

If President Biden decides he wants to extend these benefits beyond September 7th, he will need congressional approval, which will be difficult in the current political climate.

What’s at stake?

Experts estimate that 7.5 million Americans  will  lose their unemployment aid after Labor Day, which includes over four million gig workers and contractors currently receiving  Pandemic Unemployment Assistance and another three-plus million currently receiving Pandemic Emergency Unemployment Compensation, which provides up to 53 weeks of aid for those who have exceeded state allowances.  Finally, those individuals still collecting traditional unemployment will lose their additional $300 weekly federal payments.

With the U.S. adding 943,000 jobs in July and the unemployment rate dropping last month to below 5.5%, some experts argue that an extension of these benefits is not needed and that their mere existence is why there are currently over 9 million unfilled jobs in the U.S.  However, with the uncertain financial impact the Delta variant will have on the U.S. recovery, some fear that failure to extend benefits will cripple the economy.  Others, including Federal Reserve Chairman, Jerome Powell, have gone on record in his belief  the U.S. economy is strong and more than capable of withstanding another setback resulting from a Delta surge.

Regardless of what side you are on, one thing is for sure, we can all expect this issue to dominate the news cycle in the coming weeks. 

Brody and Associates regularly advises management on complying with the latest state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.