Unemployment Benefits Have Expired - What Does That Mean For Your Business?
The $300 per week federal unemployment benefits have expired as of September 6, 2021. What does that mean for your business?
The $300 per week federal unemployment benefits have expired as of September 6, 2021. As of June 2021, close to 9 million people across the country were still unemployed. With the expiration, 7 million people lost their unemployment benefits completely and 3 million lost their $300, so what does this mean for your business and the overall economy?
Employers and businesses across the U.S. argued that the unemployment benefits were a leading factor in the labor shortages that we have been experiencing over the last year. It is no secret that the economy has taken a hit since the beginning of the pandemic, and without adequate workers, people have feared how long it will take to pick back up.
In June and July, 26 states ended their unemployment benefits early with the hope that it would bolster the labor market. Since then, experts have performed research to assess if the aid was, in fact, impacting the labor force and how the economy would respond to the withdrawal of benefits.
The Department of Labor (DOL) data shows that the extra aid did not have a significant impact on job growth. In fact, nonfarm payrolls only rose 1.33% in July from April in the states that ended benefits vs. 1.37% in the states that did not end the benefits.
Many economists warn that it might be too premature to tell what sort of effects the expiration of unemployment benefits might have on the market. Other factors have kept people from returning to work that must be accounted for such as, school closures, childcare, fear of COVID-19, and health-related reasons, or they want to switch industries altogether. To learn more about why employees are not returning to work, watch our coffee break webinar here.
With the entire nation ending unemployment benefits in September, we will gain a much greater and more granular picture of how this will impact the economy in the months ahead. If you have any additional questions, please don’t hesitate to reach out to our team here.