Unemployment recipients fell by greater than half after Labor Day cliff

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People can get information when they attend a job fair on September 9, 2021 at SoFi Stadium in Inglewood, California.

PATRICK T. FALLON | AFP | Getty Images

The number of Americans receiving unemployment benefits has fallen by more than half after the Labor Day “cliff” when federal aid to millions of people ended.

On Sept. 11, just over 5 million people received unemployment benefits – a cut of about 55% from the 11.3 million who received benefits the week before, according to federal data released Thursday.

Pandemic-era programs that provided income support to the unemployed expired on Labor Day.

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At that point, workers such as the self-employed, self-employed and long-term unemployed were no longer eligible for government benefits through these programs, which had been available since March 2020.

In the coming weeks, the number of current recipients is likely to decrease by a further million. The 5 million current recipients as of September 11 include around 2 million people who have received federal aid on paper through expired programs – a dynamic that, according to labor experts, reflects processing delays and retroactive applications.

Unemployed people who are still entitled to state benefits can continue to receive these benefits. However, you will get $ 300 less per week as a federal performance allowance expires.

In December 2020 and again in March 2021, the Congress had extended the federal performance programs, but decided not to do this a third time due to an improvement in the economy and the labor market.

Twenty-six states withdrew prematurely from the programs in an attempt to get the recipients back to work. However, the evidence available suggests that improved benefits did not result in large numbers of workers staying on the sidelines.

Economists believe other factors, such as persistent health risks and childcare obligations, especially amid the virus delta wave, play a bigger role in a labor shortage.

Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh had urged states with high unemployment rates to continue to provide assistance to some unemployed by using other pots of federally allocated pandemic funds. However, it doesn’t appear that they did.

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