More than 2 million workers could see their jobless benefits slashed or eliminated altogether next month as more states opt out of federal unemployment programs. Some of the hardest hit will be out-of-work Black Americans.
“The states are giving them 30 days to find a job,” Andrew Stettner, an unemployment insurance expert and senior fellow at the Century Foundation, told Yahoo Money. “Most of those workers won’t find a job within those 30 days. Most of them are going to have zero in unemployment benefits.”
Those workers stand to collectively lose $10.9 billion, averaging out to potentially thousands of dollars per worker, money that also won’t flow into those states’ economies, according to an analysis by the Century Foundation.
Eighteen states so far plan to cancel the pandemic-era jobless programs. Alaska and West Virginia were the latest states to opt out on Friday, a move gaining steam among Republican governors following last week's disappointing jobs report.
“More than 50 local employers have posted recruitments, and the response has been very positive. Employer demand for workers is outpacing job applicants,” Alaska Department of Labor and Workforce Development Commissioner Dr. Tamika L. Ledbetter said in a statement on Friday. “For those seeking employment, the time is now.”
‘The ones that will have the hardest time finding a job’
Starting in mid or late June, jobless workers in those 18 states will lose the extra $300 in weekly unemployment benefits, but maintain their regular benefits. Contractors, gig workers, and others will lose access to the Pandemic Unemployment Assistance (PUA) program, meaning they won’t get any benefits at all.
Those programs are set to expire on September 6 nationwide.
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The cut-off in benefits will disproportionately hurt people of color, according to Stettner. Two-thirds of unemployment insurance recipients in Mississippi are Black, while around half in South Carolina and Alabama are. The percentage of Black Americans relying on unemployment in those three states is at least three times higher than the national average of 18%.
“We know in the southern states, people of color — Black workers in particular — are the majority of people on benefits,” Stettner said. “They're the ones that will have the hardest time finding a job because of discrimination and also they're the ones who were hit by COVID the hardest.”
‘Use federal money to encourage people to work’
Arizona and Montana are the only states so far of the 18 to offer a one-time return-to-work payment of $2,000 and $1,200, respectively, using money from the American Rescue Plan. In Montana, only those who complete four weeks of work would get the payment, while Arizonians must complete at least 10 weeks at their new job.
“The increase and extension of the supplemental unemployment benefits, once well-intended, is now having the wrong impact,” Arizona Governor Doug Ducey said in a video statement on Thursday. “In Arizona, we’re going to use federal money to encourage people to work… instead of paying people not to work.”
Lawmakers, including Sens. Ron Wyden (D-OR) and Bernie Sanders (I-VT), are urging the labor secretary to find a way to pay benefits to PUA recipients, with Sanders noting that it's a “congressionally-mandated requirement,” in a letter on Thursday.
“I urge you to commit to holding states accountable for their role in administering PUA benefits,” Sanders wrote. “Workers who lack access to childcare, have lost employer-sponsored health insurance, and fear for their health and safety as we work to get every American vaccinated are entitled to these benefits.”
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova
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