Jobless Benefit Cuts Cause Lost Earnings, Spending In US States: Study
Muhammad Irfan Published August 20, 2021 | 11:29 PM
American states that ended pandemic jobless benefits early saw slight dips in unemployment rates but big declines in spending and income, according to a study released Friday, in what could be a preview of the effects nationwide when the programs end completely
Washington, (APP - UrduPoint / Pakistan Point News - 20th Aug, 2021 ) :American states that ended pandemic jobless benefits early saw slight dips in unemployment rates but big declines in spending and income, according to a study released Friday, in what could be a preview of the effects nationwide when the programs end completely.
First created by the CARES Act in March 2020 and extended several times since, the emergency benefits increased weekly unemployment payments and expanded them to freelance workers and the long-term unemployed.
But the Federal aid has become controversial in recent months, as critics say they encourages people not to return to work even as Covid-19 vaccines were introduced and businesses struggled to fill open positions.
Officials in 26 states -- mostly led by Republicans -- have announced early cuts to some or all of the programs, which are due to expire nationwide on September 6.
In states where benefits ended early, nearly 25 percent of people surveyed had jobs as of the end of July, compared to about 22 percent in states that continued the programs, according to the study that analyzed data on 18,648 jobless people in the 22 states that ended extra benefits in June.
However, the job gains did not make up for the decline in incomes and spending that followed, according to the researchers from Columbia University, Harvard University, University of Massachusetts Amherst and University of Toronto.
"We see a small... rise in earnings of $14 per-week, making up around five percent of the shortfall from benefit decline," they wrote in the study using data from financial services firm Earnin.
However, "The reduced income was accompanied by a $145 per-week (20 percent) fall in spending." As the aid ends nationwide, "We could see around $8 billion in reduced spending during September and October. The spending losses are likely to continue further as additional workers take time to enter the workforce," they wrote.
While the authors were not certain, they predicted about half a million new jobs would be created in September and October after the benefits end nationally, but the majority of the four million people who would lose benefits after the September expiration would "take much longer to find jobs."President Joe Biden's American Rescue Plan stimulus package passed in March allocated $350 billion to state and local governments, and on Thursday his administration said states could use that money to keep the expanded benefits going beyond September, especially if rising infections from the Delta variant of Covid-19 delay hiring.
Labor Department data released Friday gave a mixed verdict on the impact of the benefit cuts on state-level unemployment rates, with joblessness declining in 17 states, only some of which had cut the benefits early.
Related Topics
Recent Stories
President for all-weather road infrastructure in Gilgit-Baltistan
Religious affairs minister visits Saudi Arabia to review Hajj arrangements
Risk Associates certifies Meezan Bank as Pakistan's first PCI 3DS standard compl ..
Excise dept collects Rs7.5 million taxes during campaign
NUST, PU win Pak universities debating championship
Pakistan Meteorological Department (PMD) indicates chances of rain at few places
Pakistan qualifies for Central Asian Volleyball League final
Murtaza Wahab inaugurates 15th Satryoon Sang Crafts Exhibition
KWB alerts residents of impending water shortage due to development works
Governor Punjab to take up farmers' problems, wheat procurement with Chief Minis ..
Pakistan, China resolve to further deepen bilateral ties thru high level exchang ..
CDA chief calls for active supervision of Traffic Police at Bharakahu bypass for ..
More Stories From World
-
Ireland to recognise Palestinian statehood 'this month': minister
2 hours ago -
State of emergency set for France's New Caledonia after deadly riots
2 hours ago -
Sri Lanka says 16 citizens killed fighting in Ukraine war
2 hours ago -
Quality of Life Program Head discusses investment opportunities in Italy
3 hours ago -
Kuwaiti govt sworn in
3 hours ago -
5.3-magnitude quake hits Tonga Islands
3 hours ago
-
Vice Foreign Minister Eng. Waleed Elkhereiji receives newly appointed Chinese Ambassador
4 hours ago -
Swiss court jails Gambian ex-minister for crimes against humanity
4 hours ago -
Two dead, hundreds injured as riots sweep New Caledonia
4 hours ago -
Two dead, hundreds injured as riots sweep New Caledonia
4 hours ago -
Hezbollah says struck Israel after field commander's killing
4 hours ago -
Qatar eyes more long-term gas supply deals this year
4 hours ago