3.5 million workers are at risk of losing their unemployment benefits as Republican governors cut pandemic aid

People line up outside a temporary unemployment office established by the Kentucky Labor Cabinet at the State Capitol Annex in Frankfort, Kentucky, U.S. June 17, 2020. REUTERS/Bryan Woolston
Thousands line up outside unemployment office in Frankfort, Kentucky. Reuters
  • Over 20 GOP-led states are opting to end their participation in federal unemployment benefits early.
  • It means an additional $300 in weekly benefits would end, as will programs expanding eligibility.
  • At least 3.5 million workers will be impacted by the early pause, according to one estimate.
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As more GOP governors withdraw their states from federal unemployment benefits, millions of workers are poised to feel the blow of government aid ending early.

Following April’s dismal jobs report – and anecdotes that workers were opting to remain on UI benefits rather than return to work – at least 22 states have moved to cut off beefed-up benefits over the summer.

That will cause at least 3.5 million people to lose jobless aid early, according to a projection from Andrew Stettner at the liberal-leaning Century Foundation.

Texas is the largest state to end its participation. Gov. Greg Abbott announced on Monday that federal unemployment benefits will end effective June 26. That announcement alone will cut off about 1.3 million workers from receiving roughly $8.8 billion in aid, according to The Century Foundation.

“According to the Texas Workforce Commission, the number of job openings in Texas is almost identical to the number of Texans who are receiving unemployment benefits,” Abbott said in a statement. The state’s unemployment rate in March 2021 was 6.9%, nearly double the unemployment rate from February 2020.

There are currently a few different types of federal unemployment benefits. Perhaps the best-known is the additional $300 a week the government adds onto state payouts. But millions are relying on programs like Pandemic Unemployment Assistance (PUA), which temporarily expanded who’s eligible for unemployment benefits and brought gig workers into the fold. The end of federal unemployment benefits would cut off their income completely.

Stettner estimates that 1.5 million of the impacted workers are enrolled in PUA. Another 1.3 million are in another federal program set up to channel aid to long-term unemployed people. Then 850,000 people are receiving state benefits, meaning they will only lose the $300 federal supplement.

Some politicians and advocates have argued that the Labor Department is obligated to continue paying out PUA under the CARES Act. Sen. Bernie Sanders wrote a letter to Labor Secretary Marty Walsh urging the Biden administration to step in and ensure PUA is distributed. But there’s been no movement from Biden or the Labor Department yet. The Department of Labor did not immediately respond to Insider’s request for comment.

If workers in states ending unemployment benefits return to work, they may see a pay cut, especially those on minimum wage. There are currently seven states who have not lifted pay since the $7.25 federal minimum was enacted in 2009. Six of those states are ending federal unemployment benefits early.