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POLICY INSIGHT
BEYOND THE NUMBERS

Rescue Act Extends Unemployment Benefit Programs That Help Millions of Unemployed Workers and Their Families

The American Rescue Plan Act extends, through September 6, critical unemployment benefit provisions that help unemployed people pay their bills and care for their families.

The Act extends provisions of the December relief package that were scheduled to expire this month. These measures include continuing the $300-per-week federal supplement to weekly benefits, providing enough additional weeks of federally funded benefits to ensure that jobless workers will continue to receive benefits while the nation is still struggling with COVID-19 and its economic fallout, and continuing the Pandemic Unemployment Assistance (PUA) program, which expands benefit eligibility to a broader group of jobless workers. The legislation also extends full federal funding of Extended Benefits if high unemployment in a state triggers the program.

The extension to September 6 is significant, but because Congress will be on August recess as we approach the deadline, lawmakers will need to decide earlier in the summer whether economic conditions warrant an additional extension of benefits. In his original American Rescue Plan, President Biden was clear that jobless benefits should remain in place as long as economic conditions warrant — and the jobs recovery has a long way to go.

Employers added 379,000 jobs to their payrolls in February, but that leaves a large deficit of 9.5 million jobs compared with February of 2020. While the unemployment rate edged down to 6.2 percent, the labor market remains weaker than the headline jobs numbers suggest.

In the week ending March 6, over 1 million people filed an initial claim for unemployment assistance through the regular state unemployment insurance program or PUA. That was the 51st straight week in which initial claims in these programs topped 1 million. For the week ending February 20, 69 percent of the 18 million continued claims for all unemployment benefit programs were for PUA or Pandemic Emergency Unemployment Compensation (PEUC) — programs that the American Rescue Plan Act extends through September 6.

A disproportionate number of job losses since last February are in industries that pay low wages and, since last spring’s steep job losses, workers of color and those without a bachelor’s degree have experienced a far slower jobs recovery than white workers and college graduates. The lowest-paying industries accounted for 31 percent of all jobs in February of 2020, but 55 percent of the jobs lost since then, CBPP analysis finds. Many of these jobs are in leisure and hospitality and other industries that will not revive quickly until COVID-19 is under control. Unemployment assistance is vital to relieving hardship for the workers who have lost jobs in these industries.

The CARES Act of March 2020 broadened coverage, increased benefit levels, and extended the number of weeks of unemployment assistance available, relieving hardship and keeping the recession from being even worse. But the duration of these provisions wasn’t tied to economic conditions. Policymakers let the federal supplement to jobless benefits lapse for months after its expiration at the end of July 2020. They again created uncertainty among jobless workers when they waited to address the pending expiration of PUA and PEUC at the end of December.

The American Rescue Plan Act has been signed into law quickly enough to avoid such a disruption this month, but unemployment, particularly among workers of color and workers without college degrees, will likely remain elevated in the fall. Policymakers should be prepared to act again before September 6 to keep needed unemployment assistance available and to prevent a benefit lapse that would harm families and disrupt states’ ability to administer unemployment programs.

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