- Four states are cutting off stimulus jobless aid on Saturday.
- The cuts in Mississippi, Missouri, Alaska, and Iowa yanks aid from 340,000 workers.
- The Biden administration is very unlikely to step in and prevent the unemployment aid losses.
- See more stories on Insider’s business page.
For nearly 340,000 workers on Saturday, a steady flow of federal assistance will abruptly end.
Mississippi, Missouri, Alaska, and Iowa are the first four Republican-led states to scrap their federal unemployment insurance programs. They include the $300 federal supplement to unemployment checks, along with a pair of federal programs that expanded government assistance to gig-workers, freelancers, and the long-term unemployed during the COVID-19 pandemic.
No extra federal assistance will be going out the door in those states after this weekend. That means the level of wage replacement with regular unemployment aid will not amount to half of workers’ past income, per data from Andrew Stettner, a senior fellow and jobless policy expert at the left-leaning Century Foundation.
Some 22 million US jobs were lost last year because of the pandemic, many of them low-wage positions.
Twenty-five GOP-led states are pulling the plug on unemployment insurance programs over the summer, imperiling aid for nearly four million people, according to Stettner. Republican governors argue that the federal aid is keeping people from re-entering the workforce, slowing the economic recovery.
“It has become clear to me that we cannot have a full economic recovery until we get the thousands of available jobs in our state filled,” Mississippi Gov. Tate Reeves said last month.
The unemployment aid was extended until early September under President Joe Biden’s coronavirus relief law enacted three months ago. But many employers and Republicans stepped up their complaints about worker shortages, particularly in the leisure and hospitality sector, though those sectors added jobs in the past two months.
Biden appears to have demonstrated some sensitivity to the criticisms. The president said last week that it “makes sense” for federal unemployment aid to expire on Labor Day. Then White House press secretary Jen Psaki said Republican governors have “every right” to cancel the administration’s jobless aid programs.
Sen. Bernie Sanders, along with some economic experts, argue that the government has a legal obligation to step in and distribute aid to at least gig workers through the Pandemic Unemployment Assistance program. But the Labor Department – which administers the program – has concluded it is unable to do much about it.
Some Democrats in Congress have been fiercely critical of the GOP moves.
“No one should face financial ruin for living in states run by Republicans,” Sen. Ron Wyden of Oregon said in a statement last month. He told Politico recently he was eyeing a new bill to address the situation, though such a plan faces an uphill climb in the evenly-divided Senate.