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.
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.
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.
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.
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