Just in time for Labor Day, 120,000 jobless Washingtonians will lose their unemployment benefits as a federal pandemic program expires — and state officials still aren’t stepping up with funds to soften the loss.
Saturday marks the last day for two emergency federal benefit programs that targeted people who’d lost jobs in the pandemic but didn’t qualify for regular state unemployment benefits.
Saturday’s “benefit cliff,” as some have called it, will mainly affect people who have exhausted their 26 weeks of state unemployment or whose former job category, such as contractors or self-employed, isn’t covered by state benefits.
All told, roughly 120,000 people now getting those federal benefits will see their final payment starting next week, according to an estimate by the state Employment Security Department (ESD). The federal benefits, authorized in last March’s America Rescue Plan Act (ARPA) and administered by ESD, have been the only income for many claimants.
Also expiring is a separate $300-a-week pandemic benefit that Congress reauthorized in March for all recipients of federal and state unemployment.
Federal funds have accounted for the lion’s share of unemployment benefits during the pandemic, including $129 million of the $161 million in total benefits paid out last week by ESD. They’ve also been a lifeline for workers who say they still haven’t been able to find jobs or have been kept out of the workforce by factors such as lack of child care or health concerns amid rising COVID-19 cases.
“Losing the $300 a week is just not going to be helpful,” said Seattle resident Philip Dawdy, 58, a longtime political lobbyist who hasn’t been able to find any new lobbying work since the pandemic started and will now have to make do with a regular unemployment benefit of $577 a week. “I mean, I’m [already] three and a half months behind on my rent,” he says.
Last month, Gov. Jay Inslee rejected calls by some worker advocacy groups to replace expiring federal benefits with some of the state’s federal pandemic funds, much as Inslee did when pandemic benefits lapsed in December. In April, state lawmakers put around $1 billion of the state’s federal pandemic money into a reserve fund.
Inslee’s office said last month that the state’s remaining pandemic funds could only cover a few weeks of the expiring federal benefits and that the state would instead help unemployed workers by assisting them in returning to work.
On Thursday, Inslee spokesperson Tara Lee reaffirmed that position. “We have limited ARPA funds left and the implementation cost and infrastructure is [a] barrier,” she said. “Our attention is focused on supporting Washingtonians with reemployment and increasing vaccination to ensure our economic recovery continues.”
She did, however, say that state officials were discussing related policy initiatives “to support Washingtonians, as we have throughout the pandemic,” but declined to share details. “We are having ongoing conversations about the best ways to do that, but nothing new confirmed,” Lee said in an email Thursday.
That uncertainty won’t sit well with some labor groups, which argue that federal pandemic benefits are expiring as jobless workers were already facing a rise in COVID-19 cases and the end of the state eviction moratorium on Sept. 30.
It’s “difficult to understand why the state isn’t stepping in here to provide some basic assistance to people in need,” said Sage Wilson, spokesperson for the labor-affiliated worker advocacy group, Working Washington.
Such assistance is all the more justified, Wilson has said, given that the state was willing to commit substantial funds to give employers a break on unemployment taxes that were otherwise set to jump to cover extra benefits paid out for pandemic-related layoffs.
But state lawmakers in both parties remain reluctant to push for a state-funded extension of the benefits.
Democrats have tended to share Inslee’s concerns over limited funding, and have insisted that it’s up to Congress, not states, to extend benefits. Republicans have expressed concerns over the benefits’ effects on the state’s economy, which is in the midst of a labor shortage.
“There was going to be an ‘edge’ at some point,” said State House Republican Leader J.T. Wilcox. “So, when it is, is the question, not whether or not there’s going to be some kind of an edge. And we’re looking at really serious economic disruptions and shortages.”
Economists disagree over the effects of federal unemployment benefits on the labor shortage. According to a recent analysis by The Wall Street Journal, job growth in states that ended federal unemployment benefits earlier this year hasn’t been significantly better than in states where the pandemic benefit were still being offered.
It’s not clear whether any other states are stepping in to replace federal unemployment benefits. This week CNBC reported that it had asked all 50 states whether they were replacing federal benefits; the 20 that responded said they were not.
ESD officials say that federal pandemic benefits will continue to be paid after the Sept. 4 deadline in some instances, such as for workers whose claims have been held up for review. More details can be found on the ESD website.
The end of federal benefits comes as the Washington economy continues to show signs of both labor shortages and stronger job growth.
Washingtonians filed 5,073 new, or “initial”, claims for unemployment benefits last week, a 5.3% decline from the prior week, ESD reported Thursday. The state’s 4-week moving average for new claims was 5,345, which is up less than a percent from the prior week’s 4-week moving average, and only modestly higher than the 4-week average for the same period in 2019.