'Largest cutoff' of jobless benefits looms next week for millions of Americans

·Reporter
·5 min read

Unemployment benefits have kept the Applebys afloat after Brianne — a bus aide – and her husband — a school bus driver — lost their jobs last year. That life line ends on Labor Day when the pandemic-era unemployment programs officially end — with no extension in sight.

Both had been reluctant to take in-person jobs this year because Brianne has asthma, making her more vulnerable to complications if she gets the coronavirus. But as the expiration looms, they may have no choice, even as cases in their hometown of Rochester, N.Y., rise.

“Going back out in this world just to go get groceries is scary,” Appleby, who is vaccinated, told Yahoo Money. “I'm disappointed that our government has consistently determined that our lives mean significantly less than the running of the economy.”

Women walk past by a
Women walk past by a "Now Hiring" sign outside a store on August 16, 2021 in Arlington, Virginia. (Photo by OLIVIER DOULIERY/AFP via Getty Images)

The Applebys are two of at least 7.5 million jobless workers who will be left with no benefits when the unemployment programs end, according to an analysis by the Century Foundation. The actual number may be as high as 9.1 million, according to Andrew Stettner, an unemployment insurance expert and senior fellow at The Century Foundation.

“The largest cutoff of benefits that we've ever seen,” he told Yahoo Money, noting that spending will shrink by $5 billion each week with the expiration. “Historically there’s never been an ending of benefits so abruptly.”

Approximately 4.2 million workers will lose the Pandemic Unemployment Assistance — benefits for workers who usually don’t qualify for regular unemployment insurance. Another 3.3 million workers on the Pandemic Emergency Unemployment Compensation (PEUC) that extends the duration of unemployment benefits will also lose benefits. The additional $300 of weekly benefits, paid for by the federal government, will also run out this weekend.

Already 4 million unemployed workers lost some or all of their benefits in June and July after 26 states opted out of federal programs early.

NEW YORK, NEW YORK - JUNE 04: People walk by a Help Wanted sign in the Queens borough of New York City on June 04, 2021 in New York City. The U.S. economy added 559,000 jobs in May, bringing the unemployment rate down to 5.8 percent from 6.1 percent. Despite the positive economic news, millions of Americans are still looking for work or are in need of financial, food, and housing assistance. (Photo by Spencer Platt/Getty Images)
People walk by a Help Wanted sign in the Queens borough of New York City on June 04, 2021 in New York City. The U.S. economy added 559,000 jobs in May, bringing the unemployment rate down to 5.8 percent from 6.1 percent. Despite the positive economic news, millions of Americans are still looking for work or are in need of financial, food, and housing assistance. (Photo by Spencer Platt/Getty Images)

The pandemic unemployment benefits have been extended three times during the pandemic — the last time in March — and have delivered a total of more than $800 billion to families. But there’s no appetite now in Congress to grant another extension.

“There was an idea that by September, things would be relatively back to normal, that people would feel comfortable going to work themselves and employers would be very eager to hire them,” Stettner said. “The Delta variant complicates the whole situation.”

While job openings reached a record high of over 10 million in June, employers may not be rushing to fill some of those postings due to the uncertainty caused by the rise of the Delta variant, according to Stettner. The Labor Department reported on Friday that leisure and hospitality — which added 2.1 million jobs from February to July — was flat in August.

That could make it harder for those losing benefits to find a job immediately. Only 1 in 8 workers who lost some or all of their jobless benefits in the 19 states that ended the programs prematurely in June found a new job by August 6, according to research by a team of economists who analyzed banking data of more than 18,000 low-income workers.

“We're both trying to find work,” Appleby said. “It's just been a lot of the same low-income jobs where you have to put a lot of physical energy behind it. I'm disabled so these kinds of jobs are actually super difficult for me.”

Brianne Appleby and her husband will lose their unemployment benefits when the federal programs expire on September 6. (Photo courtesy of: Brianne Appleby)
Brianne Appleby and her husband will lose their unemployment benefits when the federal programs expire on September 6. (Photo courtesy of: Brianne Appleby)

While the jobs recovery has accelerated in the summer months, the number of people still relying on temporary unemployment programs is historically high compared with previous recoveries from recessions.

For instance, 1.3 million workers were on Emergency Unemployment Compensation before it expired in December 2013 following the Great Recession. Similarly, 830,000 workers were on the Temporary Extended Unemployment Compensation when it was phased out in December 2003 after the dot-com bust.

Other relief programs are also ending.

“Everything is ending. The eviction moratorium is over. Some of the payments for health insurance are ending,” Stettner said. “A lot of things are coming to an end at a similar time.”

Appleby worries about how she and her husband will cover their $900 rent after their benefits end. She managed to pay some debt during the pandemic, but the benefits weren’t enough for her to build up savings.

“We don't have this overflowing bank of money,” Appleby said. “What I have in the bank is rather small, it's just enough to make sure that like if I need to go to the hospital or our cats get sick I can cover the bills.”

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Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova