The Economy Could Suffer from States Ending Pandemic Unemployment Benefits Early
As the economic recovery picks up steam, new claims for state unemployment benefits have fallen to the lowest level since the start of the pandemic. And, citing a severe shortage of workers, half of the nation’s governors have decided to end extra federal jobless benefits early — well before they’re due to expire in early September.
But cutting off those extra benefits — which amount to about $10 billion per week — is a big mistake that could hurt the economy just as it’s getting back on its feet, said Dan Alpert, a senior fellow in macroeconomics and finance at Cornell Law School.
“If we terminate those benefits earlier, as many Republicans have suggested, what we’re going to be doing is bringing forward a contraction in spending,” Alpert said in an interview with NPR’s Steve Inskeep on Morning Edition. “And that’s really going to be a problem … not just for the households, but for the local economies as well.”
