As noted by Maine Center for Economic Policy in a previous article, September 4 marks the end of new federal Unemployment Insurance (UI) programs enacted by Congress during the coronavirus pandemic. Both the federal Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation programs will end completely, and as many as 95,000 Mainers in those programs, including claimants and their dependents, will be ineligible for any further assistance. Regular state UI benefits will continue to be available to individuals who have not used their 26-week allowance, but the $300 per week additional benefit will cease, cutting their benefits approximately in half.
According to the latest claims data from the Maine Department of Labor, just over 7,000 individuals received state UI benefits in the week ending August 28. More than 22,000 individuals were enrolled in one of the two federal programs, for a total of more than 29,000 claims across all programs. According to the US Census Bureau’s Household Pulse Survey, those claims go to households containing an estimated 94,800 Mainers, including other adults and children.
The ending of unemployment benefits comes at a terrible time for Mainers who are out of work. Not only are tens of thousands of Mainers still unable to find work, but the surging Delta variant of COVID-19 has made returning to work more dangerous, especially for those Mainers with young children who cannot get vaccinated or individuals with compromised health. The numbers of both new daily reported cases of COVID-19 and Mainers hospitalized with the disease are at levels not seen since last winter.
It's also clear that ending benefits does nothing except increase hardship for those who lose this economic lifeline. A number of Republican governors chose to end the federal program and weekly supplement early, in June, and researchers have found no positive effects from those decisions. In fact, one recent study found that only a fraction of those losing UI benefits were able to find employment, and that on average, employment income made up only 5% of the loss in UI benefits. In other words, the end of the federal programs was an economic disaster for individuals and a drag on state economies.
While Congress has failed to fix this economic cliff, states do have the ability to soften the blow. The Biden Administration has confirmed that states can use money from the American Rescue Plan Act to pay supplemental benefits to UI recipients whose claims are about to expire — either on an ongoing basis, or as a one-time payment. While Maine allocated $80 million in ARPA funds to the Unemployment Insurance Trust Fund in July, the Mills Administration has shown no sign that it would make additional payments to Mainers who are unemployed. Instead, that money will reduce business taxes over the next three years.
Both federal and state governments have the ability to mitigate this impending financial blow and should act immediately to do so. Otherwise, tens of thousands of Mainers will face unnecessary hardship at a time of great uncertainty in the economic and public health environment.