Ending Pandemic Unemployment Could Cost 3 Million Jobs

SK Ashby
Written by SK Ashby

As part of the CARES act passed by Congress earlier this year, unemployed Americans can claim enhanced unemployment benefits of up to $600 per week, but that program is set to expire at the end of next month.

Letting the program expire while over a million people are still losing their jobs each week would have significant consequences, but I've never seen it put into context like this.

The Congressional Budget Office (CBO) estimates that the extra unemployment benefits are supporting up to 3 million jobs as Americans actually have some money to spend at businesses that are still open. Letting the program to expire could be equivalent to another recession by itself.

“I think most people think that when the $600 gets cut off that if they’re not unemployed, it’s not going to affect them. But when 30 million people are no longer getting $600 extra dollars, that’s going to have a multiplier effect on the whole economy,” [National Employment Law Project policy analyst Michele Evermore] says. [...]

“Letting this extra $600 in unemployment insurance benefit expire at the end of July would by itself cause more job loss than was seen in either of the recessions of the early 1990s or early 2000s,” writes Josh Bivens, director of research for the Economic Policy Institute.

Will Republicans in Congress let this happen?

I actually don't think they will, but that is their position as currently stated.

The White House says the extra benefits are too much of a disincentive to go back to work. Senator Lindsey Graham (R-SC) said the extra benefits would only be extended "over our dead bodies" which is very appropriate -- or perhaps inappropriate -- for our current situation. Reopening the economy has literally created dead bodies.

Republicans have been counting on reopening the economy to save them from more socialism but, ironically, their own reckless disregard for public health and safety has made it more likely that we'll need some more socialism.

The White House said extending unemployment benefits is not necessary because the economy will be Great Again any day now while, at the same time, Trump holds mask-free rallies and tells people the virus is "going away" making it more likely that it won't go away.

CNBC reports that the extra unemployment benefits may actually end one week earlier than expected because the last day of the month falls on a Friday but states process on Saturdays; meaning the last payments would be processed about a week before the program officially ends.