Yellen Writes Letter To Congress Officially Ending Enhanced Unemployment

Mandatory Credit: Photo by STEPHANIE LECOCQ/EPA-EFE/Shutterstock (12209626ao)United States Secretary of the Treasury Janet Yellen during a family picture at the end of a meeting of Eurogroup Finance Ministers, at the European Council in Brussels, Belgium, 12 July 2021.
STEPHANIE LECOCQ/EPA-EFE/Shutterstock / STEPHANIE LECOCQ/EPA-EFE/Shutterstock

Since last year, state unemployment benefits have been supplemented by an extra $300 per week, totaling an extra $1,200 a month, by federal money through the stimulus relief bill.

See: Are Unemployment Benefits Causing Labor Shortage? Take Our Poll
Find: Food Stamp Benefits Get Historic Boost With Program’s Largest Permanent Increase

The extra federal boost was an area of contention for the last few months. Although Yellen in her letter to Congress stated the official end of the benefit to be this coming Sept. 6, over half of the country’s governors decided to end receipt of the benefit for their states months ago. They claimed that small business owners were having difficulty filling open vacancies in their stores and blamed the continued federal supplement as the reason.

Gov. Kay Ivey (R-Ala.) ended the federal assistance back in June, citing that the state had the lowest unemployment rate in the Southeast and employers were finding it increasingly difficult to find workers to fill available jobs, even though job openings were abundant. Gov. Abbott (R-Tx.) ended them in May, claiming that there were more job openings than there were people with unemployment insurance. He also added that 18% of the unemployment claims filed have proven to be fraudulent.

Make Your Money Work for You

The end to the program is now officially here, as Yellen penned: “We write on behalf of President Biden with an update on the steps our Departments are taking in advance of the expiration of emergency unemployment insurance (UI) programs on September 6, 2021.”

Yellen noted the progress the economy has made in bouncing back, but also cited Delta variant concerns as restricting full rebound in some states where the virus is still not well under control.

See: Stimulus Update: New Bill Proposes Expansion of Worker Benefits on the Heels of Child Tax Credits and COVID Relief Checks
Find: How To Go Back To Work And Still Keep Unemployment Benefits

Importantly, she highlighted that the American Rescue Plan allocated $350 billion to state and local governments to support communities’ continuing response to the pandemic and address its economic impacts. She stressed that this money can be useful in states where the unemployment benefits are ceasing and extra help is still needed. These funds can be used to cover the cost of providing assistance to the unemployed beyond Sept. 6, Yellen noted.

This means that although governors were not happy about the federal assistance their employees were receiving in prior months, should they have overshot their states’ economic rebound, federal money will still be there to assist if in need.

Make Your Money Work for You

More From GOBankingRates

About the Author

Georgina Tzanetos is a former financial advisor who studied post-industrial capitalist structures at New York University. She has eight years of experience with concentrations in asset management, portfolio management, private client banking, and investment research. Georgina has written for Investopedia and WallStreetMojo. 

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.