Will more return to work when unemployment benefits end? Early data shows maybe not

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ROCHESTER, N.Y. (WROC) — Federal unemployment benefits are set to expire in just a couple of weeks and more than a million jobless workers are set to lose income support, or see their aid reduced by $300 a week. 

The payments, under the American Rescue Plan, are set to end in many states on Monday, Sept 6. Over the course of the pandemic, the money has helped support thousands of families. 

“The data from last year show that the number of children in poverty especially was dramatically decreased,” Joe DaBoll-Lavoie, a Professor of Economics at Nazareth College said. “So, it did what it was supposed to do, which was help people in a very difficult time.”

New York still is providing these unemployment payments, but more than 20 states have already opted out of them. Their hope is to encourage people to get back into the workforce. However, according to early data, that’s not necessarily happening. 

UKG, a payroll and time management firm, found shifts among hourly workers in those 20-some states grew at about half the rate as states that continued the benefits. 

“I think what a lot of people are seeing is that they’re realizing labor markets are really complicated. people’s lives are complicated,” DaBoll-Lavoie said. 

According to the data, in states that have ended the benefits, shifts grew 2.2% from May through July. But, they grew 4.1% in states that kept the federal aid in place. 

Experts say this could show that people aren’t returning to work at high rates due to their own personal lives and less because of employment payments. 

“It’s hard to go back to work if you’re juggling childcare, or eldercare, or your own illness recovery,” DaBoll-Lavoie said. “The other impact is that people don’t stay put, or they may be migrating, they may be retiring, or we’re seeing older workers are deciding… I’ve had enough.”

DaBoll-Lavoie also believes some people could have decided they want to be paid better for their work. 

“When you look at some of the numbers that we see in the news, what is it… 48% of low wage workers were making more money on being on benefits than they were at their job,” DaBoll-Lavoie said. “And what that sadly says is there are way too many Americans with lousy paying jobs.”

While it’s unclear what the result would be of these payments ending in New York, DaBoll-Lavoie said New Yorkers may see different outcomes in different areas of the state. 

“If you drill into the numbers, it’s a tale of two states. Unemployment numbers upstate… look at like Erie County or Monroe County,” DaBoll-Lavoie said. “It’s around 5.3, 5.4%. But if you drill into the New York City, and the big counties down there, unemployment is still terribly high.” 

Nationally, almost six million lost jobs have yet to return. Yet, experts are hopeful as the U.S. economy continues to improve. In July, the national unemployment rate fell to 5.4% from 5.9%. 

New York State has a current employment rate of 7.6 percent, making it the state with the 4th highest unemployment rate in the country.

Just last week, the Biden Administration said while they don’t plan on extending these unemployment benefits, individual states can continue them if they choose. States can use pandemic funds that Congress previously allocated to state and local governments as part of the American Rescue Plan. 

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