According to most economists, various factors make it more difficult for businesses to fill jobs at current pay levels. Many unemployed people are afraid of contracting COVID-19 if they work in service businesses like restaurants or hotels.

The abrupt termination of pandemic unemployment benefits on a large scale after this week could have long-term consequences for both the recipients and the economy.

Over the previous year and a half, unemployment benefits have helped millions of laid-off employees avoid financial ruin. However, that lifeline will be cut after this week when federally financed emergency unemployment programs expire. An estimated 7.5 million people will lose their benefits. Millions more will have their weekly paychecks reduced by $300, The New York Times reported.

The government canceled a $600 weekly supplement that workers had received since the beginning of last summer’s crisis while other programs remained in place. Benefits for millions of workers were briefly suspended in December, but Congress quickly restored them. Unfortunately, this time, it does not appear that a similar rescue is possible. President Biden has urged states with high unemployment rates to extend benefits using current federal funding, but few appear to be willing to do so.

Although the economy is recovering, experts are concerned that the delta variation may slow hiring and growth. As a result, some analysts anticipate a slowdown in hiring when the government issues the August jobs report on Friday, according to AP.

Chenon Hussey of West Bend, Wisconsin, said, “We were a thriving middle-class family 18 months ago,” when the federal payments expire “we’re going to fall off the map.”

Hussey, 42, a part-time county employee, is attempting to revive a small motivational speaking career that was devastated by the pandemic. During the health crisis, her husband, a master welder, has been laid off three times.

“I have no idea what I’m going to do once these benefits stop,” Ms. Rinehart said.

When the pandemic broke out, Rinehart, 33, was an assistant general manager at a hotel in Allentown, Pennsylvania.

Rinehart, a single mother, has been afraid to return her son, now 8, to school because he has asthma and other health issues that make him particularly susceptible to the CCP (Chinese Communist Party) virus (COVID-19). He is too young to be vaccinated or left alone, and she has not been able to find a job that allows her to work from home.

“They should not cut these benefits off until there is a vaccine for all the little humans of all ages, because there are parents like me that have children that are high risk for COVID,” she said.

According to Oxford Economics, twenty-five states have already canceled the $300 weekly supplement, and nearly all of them have also terminated the two emergency federal programs, affecting approximately 3.5 million people. Except for Louisiana, nearly all of the 25 states are run by Republican governors, who claim that the $300 per week in supplementary federal aid is discouraging unemployed people from seeking work.

Yet research has found the early cutoffs of federal jobless aid resulted in only a small increase in hiring. In states that preserved the federal benefit programs, 22% receiving benefits in April had found job by the end of July, according to a study by Kyle Coombs, an economist at Columbia University, and Arindrajit Dube, an economist at the University of Massachusetts, Amherst. In places where aid was cut off, the figure was about 26%, a slight increase.

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