UNEMPLOYMENT CLIFF: Ending UI Benefits Could Not Come At Worse Time

After Labor Day, roughly 7.5 million people will lose key pandemic-era unemployment benefits established by the March 2020 CARES Act. Dr. Rakeen Mabud, chief economist at Groundwork, reacted to the impending unemployment cliff with the following statement: 

“Amid increasing uncertainty in the trajectory of the pandemic, Monday’s unemployment cliff could not come at a worse time. Millions will suffer as they lose this critical source of income and the loss of spending will suppress job growth, setting us back yet again in our efforts for an inclusive and equitable recovery.” 

Email press@groundworkcollaborative.org to speak with Dr. Mabud about the expiring unemployment programs and the potential damage that lies ahead.

ADDITIONAL BACKGROUND ON UNEMPLOYMENT INSURANCE (UI)

• Ending UI benefits early did not bring more people back to work. New research found that states ending benefits early didn’t meaningfully boost employment and instead led workers to decrease spending to compensate, hurting local economies. 
• UI benefits have served as an economic lifeline for millions of workers and families. The emergency boosts to UI during the pandemic — $600 a week until July 31 of last year and now $300 — have been especially critical since UI benefits in many states only cover a fraction of worker’s lost wages.
• Policies that protect workers from being forced into jobs with poverty-level wages are good for our economy, full stop. Strong social safety net measures like UI make our labor market stronger, build worker power, and are essential to an equitable and just recovery.  
• Enhanced UI benefits disproportionately support Black and brown workers who have historically been left behind in recoveries. As Lindsay Owens told Forbes last week, “the historic inequities in the labor market will be laid even more bare” after Monday’s benefits cutoff.
• UI benefits boost consumer spending and generate growth that reverberates throughout the economy. Enhanced UI benefits are an essential part of a healthy recovery that centers workers and local communities and should continue until we are on stronger economic footing.

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About Groundwork Collaborative
The Groundwork Collaborative’s mission is to advance an economic vision for strong, broadly shared prosperity and true opportunity for all. Learn more at groundworkcollaborative.org and follow us on Twitter @Groundwork.