In the wake of the COVID-19 pandemic, the federal government passed a series of stimulus and unemployment measures designed to help people deal with the economic turmoil that the pandemic immediately brought to the country. Those benefits - which comprise

• Author: William Asher
• Posted: 2024-07-31

This begs the question: What sort of impact will the expiration of these benefits have on the economy?

What expired?

On September 1, a series of pandemic-related unemployment benefits expired. These included:

• The "bonus" unemployment benefits payments provided Americans with an additional $300 per week in unemployment benefits.


• Expanded eligibility for unemployment payments that helped small business owners, independent workers, and gig contractors.

These payments went to millions of Americans. In theory, states could choose to extend these payments on their own. However, given the extremely high costs of these payments, that is unlikely, and no state has chosen to do so.

How will this affect the economy?

In some states - mostly red ones, governed by Republicans - these benefits already ended. The business community has been desperate for employees across the board, and many argued that the enhanced benefits were keeping people at home, rather than working. As such, many states already ended enhanced benefits in an effort to get people back to work. Studies have been mixed about the impact of these changes and whether or not ending those benefits actually did get people back to work.
On the other side of the argument, opponents of getting rid of these benefits have argued that doing so merely adds to the financial stress felt and that the benefits are not as much a factor in getting people back to work than other items, like child care, adequate transportation, and inadequate wages.
There have also been concerns that enhanced and expanded unemployment benefits are contributing to the relatively high rates of inflation that the United States has experienced. As such, some are hopeful that the reduction of these benefits will reduce the relatively high inflation that has been seen throughout the United States.
Greater questions remain about the ending of these benefits. For example, efforts to extend an eviction moratorium were struck down by the United States Supreme Court, and many social safety net programs are also ending. The end of these unemployment benefits has exacerbated concerns that those in America who are suffering the most will not be able to recover or succeed in the current economic conditions, with many fearing an eviction and foreclosure crisis not seen since the Great Recession.
Of course, there is one unknown, in particular, that is impacting this question: Is COVID truly on the way out? The rise of the Delta variant and relative plateau of vaccination efforts seems to imply that it is not.

What about the timing?

The purpose of these unemployment benefits was to keep people financially secure during the worst of the pandemic, which largely occurred in the Spring of 2020 and Winter of 2020-2021. After a brief lull in the Spring of 2021, the Delta Variant - which is highly contagious - has unquestionably taken a bite out of the economy. The August jobs report showed that the country was adding jobs back, with 225,000 more people working - but that report was a big disappointment. The rise of Delta was what was attributed to the jobs report disappointment.
This begs the question: Is this really the best time to allow these benefits to expire? Some progressive groups have pushed the Biden Administration, as well as Congress, to allow these benefits to continue, but those efforts never gained any serious legislative traction. And that brings us to where we are today: No enhanced benefits, and millions off of unemployment.
What comes next is a matter of opinion and debate. Many businesses - which have been clamoring for workers - are hoping that this will drive people back into the job market. Others have argued that the spread of the Delta variant makes the job market unsafe for many. Economic data over the next few weeks and months will be key to determine which approach is the right one.