Despite the end of pandemic-era unemployment benefits on Labor Day, the United States created just 194,000 new jobs in September — but Biden’s labor secretary insists the government will not reinstate benefits and the economy is on the mend.
However, the data indicate that the emergence of the Delta variety has hindered another month of economic improvement. In addition, September is the first month when the data includes the termination of federal unemployment benefits.
According to the September study, terminating those government incentives — which included an extra $300 per week and made gig workers eligible for checks for the first time — did not entice employees to return. This is consistent with studies indicating that the 26 states that chose to opt-out of federal benefits early had little to no effect on employment, but did suffer a financial blow as a consequence of doing so.
Labor Secretary Marty Walsh told Insider he has been addressing concerns about $300 keeping people out of work in the past four months. He pointed out that 26 states had already abolished it. He said that the government had found no evidence that terminating unemployment benefits increased labor force participation. The additional $300 didn’t have as much of an effect on individuals entering the workforce as everyone expected, Walsh said.
No COVID-19 Unemployment Benefits Extension For Now
When asked whether he would consider restoring the increased benefits, Walsh said the government does not need to for now.
“We’re heading in the right direction,” he said. “The unemployment benefit was there because in the beginning tens of millions of Americans were out of work overnight.”
With an extra $600 per week, the government initially entrenched the increased benefits in President Donald Trump’s CARES Act. Those benefits ended in July 2020. But in December 2020, they gave another $300 per week. President Joe Biden’s American Rescue Plan extended the extra $300 per week, with the benefits ending on Labor Day.
According to Walsh, there are still significant unemployment rates and a need to help individuals. At the start of his administration, the president submitted the American Rescue Plan. He stated that there had been no genuine way ahead. According to Walsh, the previous government lacked an economic recovery strategy and a plan to put Americans back to work. President Biden, according to Walsh, spelled out the strategy quite clearly.
Walsh noted a “very complicated” September employment report, according to Walsh. He went on to say that the president’s “economic initiatives are clearly working and putting us on a road to a robust recovery.” He also mentioned positive indicators, such as the unemployment rate dropping and wage growth continuing.
Millions of Americans Affected Over End of Benefits
Over 8 million individuals lost their benefits entirely when federal benefits ended on Labor Day. Delta wave seized the country and stifled economic recovery. However, experts cautioned that ending the initiatives was too early. Unemployed Americans were worried about what would happen next and have to put themselves in even more danger if they applied for in-person jobs.
Today’s unemployment report is a tragic reminder of the suffering caused by the Labor Day benefits cliff. We now have continuing claims data from the week ending 9/4, and it is clear that more than 8 million workers lost all UI benefits. Quick thread on the #s:
— Andrew Stettner (@pelhamprog) September 23, 2021
In August, Walsh and Treasury Secretary Janet Yellen sent a letter stating that unemployment will not continue beyond September 6. They explained that American Rescue Plan monies might cover the expense of helpingin areas where a more gradual wind down of income support for jobless people makes sense based on local economic circumstances.
However, no states responded, except for one. Washington said that maintaining weekly benefits would be too expensive, and that they would need federal action to continue. That action has yet to materialize after a month.