New Yorkers set to lose unemployment benefits Sunday. Here’s what that means

Local News

File image of an unemployment benefits application. (Getty Images)

ROCHESTER, N.Y. (WROC) — Labor Day is around the corner and millions of Americans are set to lose unemployment benefits.

On September 5th, several federally funding programs that had expanded those benefits during the pandemic will expire in New York.

One program ending is the $300 weekly unemployment bonus that went to millions of people. During the pandemic, this additional money helped support many families with a little extra money each week. 

“They’ve managed to prevent very large numbers of Americans at the lower end of the income distribution from becoming absolutely destitute, they’re now able to pay rent, they’re now able to provide some modicum of support not only for themselves, but also their family members,” said Amit Batabyal, a Arthur J. Gosnell Professor of Economics at the Rochester Institute of Technology.

Batabyal said with these programs ending, he expects there to be a few impacts on the economy. For one, some people may return to work. 

“Some of these jobs for which employers can’t find enough takers will get occupied, by which I mean, you will have some of these jobs being filled by people who were previously unemployed and did not necessarily have to accept the first job that came their way,” Batabyal explained. 

But the economics professor said there could also be a negative impact on the economy once this money stops. 

“People who were spending money are going to be spending even less, because they’re spending even less, that’s going to have a negative impact on the economy, because some part of the economy is driven by Consumer spending, and of consumers simply don’t spend as much as before, then that as acts as a damper, as far as economic growth is concerned,” Batabyal said. 

Many have criticized the federal aid, saying it’s kept people from returning to work. Roughly two dozen states have already opted out of the benefits, before they expired. However, they haven’t seen a huge change in employment numbers. 

“The evidence that we’ve seen so far is that for the roughly 25 or 26 states that have ended benefits early, and I’m not talking about New York right now, other states in the union that have ended benefits early… yes, you have seen a slight uptick in employment. But that uptick is very small,” Batabyal said. 

“Even though there are benefits, you have large numbers of people who are still not a part of the labor force, even though the benefits have ended. And this basically, largely, I think, demolishes the story, that people are just not working, or even looking for work, because of the existence of these unemployment benefits, and if they were to go away, people would come by in the droves to join the labor force.”

So why aren’t people returning to work, with unemployment payments or not? Batabyal said there could be a few possible reasons: 

COVID-19

“One is fear about going back to the workplace and potentially catching COVID, even if you are vaccinated. And if you are not vaccinated, that is, of course, a legitimate fear that you might catch the disease. So you’re better off staying at home,” Batabyal said. 

Childcare 

“A lot of people are having trouble finding adequate childcare. So even though there are jobs available, they cannot both work. And with that money pay for adequate childcare, that’s not working out. So people are saying, you know, I’m going to wait it out for a little while longer, while I can find a higher paying job so that I can deal with childcare,” he explained. 

People are moving and changing careers 

“What the number of federal programs that have provided this unemployment insurance have done is expand the choice set of workers, particularly those of the lower end of the spectrum, they don’t have to run an except the first job, that’s minimum wage, which involves backbreaking work, for instance,” Batabyal said. 

President Joe Biden recently announced he doesn’t plan to extend the federal benefits any longer. but he encouraged states with high unemployment rates to continue some of the aid with federal stimulus dollars. 

With the pandemic and New York having the 4th highest unemployment rate in the country, experts say that may not be a bad idea. 

“If the Delta variant hasn’t peeked and we continue to see this mess for several more months…the governor should actually consider something like that using federal stimulus money to help people who are looking for jobs and don’t necessarily have to accept the lowest first thing that comes their way,” Batabyal said. 

As of July, New York’s unemployment rate stood at 7.6%. 

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