Unless Congress acts quickly, the expiration of temporary federal expansions to the Unemployment Insurance (UI) system will push almost 86,000 Mainers off an economic cliff in early September, according to new analysis by Maine Center for Economic Policy. The federal Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation programs are set to expire September 4, and while regular state Unemployment Compensation will be available, most Mainers currently receiving unemployment payments are on the federal programs because their available state benefits have been exhausted.
According to the Maine Department of Labor, over 32,000 individuals received UI benefits in the week ending July 24. Based on recent trends, that number will decline somewhat by September; MECEP projects under 27,000 claims will be paid out in the week ending September 6. Based on data from the US Census Bureau’s Household Pulse Survey, those claims will go to households of 85,900 Mainers — which include almost 21,000 children.
Not all UI claimants will lose their benefits completely. Those enrolled in the regular state program will still be able to claim if their 26 weeks of claims for the year haven’t been exceeded. Based on recent trends, approximately one fifth of claimants and their dependents will be entitled to state benefits for some period after the September 4 cutoff. While it’s unknown for how long these claims will continue, many Mainers may be close to exhausting their annual maximum.
Although the labor market continues to recover from the coronavirus pandemic, it has yet to bounce back fully. Total employment in almost every state is still significantly below pre-pandemic levels, and workers with low wages remain hardest-hit — the very workers who have the least savings and are most reliant on unemployment benefits to see them through a period of joblessness. Moreover, while several states preemptively cut off federal unemployment benefits, early evidence suggests this did nothing to boost employment rates and only increased hardship.
The end of federal benefits will hit certain Mainers especially hard. Maine DOL data for May shows that workers in the food and accommodation sector were most likely to receive benefits, as well as workers in construction, retail, transportation, and warehousing. Women are more likely to receive benefits than men, while Black and American Indian Mainers are more than twice as likely to receive UI claims compared to white Mainers. These demographic trends underscore both the disproportionate impact the COVID-19 recession had on industries which hire more women and people of color, and the employment barriers — including outright discrimination — faced by women and Black and Indigenous Mainers.
Congress must act to extend the federal unemployment programs which are set to expire in less than a month. Tens of thousands of Mainers — many of whom are women, Black and Indigenous, and workers with low wages — will still be out of work come September. The expiration of benefits threatens to push these workers and their families over an economic cliff, making life harder for Mainers and damaging our economy in the long run.
