Cutting Unemployment Aid Didn't Get Many Unemployed Americans Back To Work : The NPR Politics Podcast Some twelve million Americans saw their expanded unemployment assistance expire Monday as the delta variant throttles the nation's economic recovery. Research from the states that halted the aid programs earlier this summer suggests the end of benefits will hurt spending and won't do much to get people back into the workforce.

So far, neither Congress nor the Biden administration are pushing to renew the benefits.

This episode: White House correspondent Tamara Keith, White House correspondent Ayesha Rascoe, and chief economics correspondent Scott Horsley.

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Cutting Unemployment Aid Didn't Get Many Unemployed Americans Back To Work

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G MATT: Hey. This is G Matt (ph) from Jersey City, N.J. I'm currently sitting by the water practicing my tradition of learning all 538 members of Congress, the districts they serve and the communities they serve on. This podcast was recorded at...

TAMARA KEITH, HOST:

2:22 p.m. on Tuesday, September 7.

G MATT: Things may have changed by the time you hear this. And hopefully I know the appropriations committee by now. All right. Here's the show.

(SOUNDBITE OF THE BIGTOP ORCHESTRA'S "TEETER BOARD: FOLIES BERGERE (MARCH AND TWO-STEP)")

KEITH: Doesn't he know you just go up to the member of Congress, and you say, sir or ma'am, please remind me of your district, I seem to have forgotten? And then when they say, New Jersey seven, you go to the little book and go, oh, that's who that was.

AYESHA RASCOE, BYLINE: Or you just go, congressperson, congressperson. And then after they're done talking, you turn to the person beside you and go, who was that? Who was that talking? That's what you do.

KEITH: I'm telling you they all look the same.

RASCOE: (Laughter).

KEITH: They're, like, all these people in suits.

RASCOE: They're older white men, mostly, still.

KEITH: Yes, still.

Hey there. It's the NPR POLITICS PODCAST. I'm Tamara Keith. I cover the White House.

RASCOE: I'm Ayesha Rascoe. I also cover the White House.

KEITH: And Scott Horsley, formerly of this parish, is here. Scott, you cover the economy. Hello.

SCOTT HORSLEY, BYLINE: Good to be with you all.

KEITH: This week, millions of workers across the U.S. lost a big lifeline. Several federal programs that extended and expanded unemployment benefits in response to the pandemic expired, and they don't seem like they're coming back. Like, these benefits are just gone. How big a loss is this for those people, and how many people are affected?

HORSLEY: Well, it's a pretty big deal. Back at the beginning of the pandemic, Congress authorized a very large expansion of the unemployment insurance system. They made a lot of people who weren't ordinarily eligible, like gig workers and the self-employed, eligible for unemployment. They extended the length of time that you could collect benefits, so people who are out of work more than six months didn't fall off the rolls like they normally would. And they also increased the payment - initially by $600 a week, later by $300 a week.

And all of those programs came to an end on Monday, Labor Day. We don't know exactly how many people are affected because the counting is not super accurate, but at last count, in the middle of August, there were north of 12 million people getting some form of unemployment assistance in this country. About three-quarters of them are going to be cut off entirely, and the rest will lose that $300 a week, but they'll continue to receive their regular state benefits. But it's a pretty big deal.

RASCOE: There was a push when the coronavirus first hit. Congress got together. They gave all these benefits because they said, all of these people are suffering, and it's not their fault. But it seems like there are still people, like you said, that are still suffering because there's still this pandemic going on. But the government now is not as - doesn't have the urgency or doesn't think, at this point, that people still need that sort of help.

HORSLEY: That's right. And our colleagues at All Things Considered talked to some people who are directly affected by this. This is Kate (ph) in Brooklyn, N.Y., who - she didn't want to give her last name because of her immigration status. But, you know, she's really feeling very close to the edge here.

KATE: I'm 45 years old. I've survived so much. I've made it work in so many different countries, in so many different cities. I have never felt this close to despair.

HORSLEY: They also spoke with an educator from Milwaukee named David Toms (ph).

DAVID TOMS: Like, it's not me being lazy. It's just, logically speaking, like, I'm going to go below what I was making even as a college student. That just doesn't make sense to me. All that is not worth risking my life, you know?

KEITH: Well, I want to shift over to a report that came out on Friday. It's the monthly jobs report. Sometimes, it's a pretty exciting day, showing lots of economic growth. This last Friday, it was a disappointing report, showing about 235,000 jobs created in the month of August. That's a lot less than people were hoping for and forecasters were expecting, but, you know, the delta variant was raging in August.

HORSLEY: That's right, and you can see very clearly the industries that were hard hit in these August jobs numbers were exactly the industries that are most sensitive to ups and downs in the pandemic. Restaurants, which had added more than a quarter million jobs in July, cut jobs in August because we know that when the hospitalizations go up and the death counts go up, people get understandably nervous about going out and eating in restaurants and shopping in in-person stores. And so we've seen this sharp slowdown in hiring just as these unemployment benefits are coming to an end.

When this timetable was crafted, most recently back in March, that's when the benefits were set to expire in early September, I think people felt like the job market would be in stronger shape than it was. And we did see really strong job gains in June and July, more than a million jobs added in July. If we added another million in August, I think people would be much more sanguine about this unemployment aid going away. But as it is with this sharp slowdown and the pandemic raging, it does put a lot of people in a tough spot.

KEITH: Ayesha, how's the White House talking about this? Like, it doesn't seem like they're - they've been working really hard to extend these benefits.

RASCOE: No. And it's interesting because back a few months ago, there was this criticism that the expanded benefits were keeping people who could go out to work from going out there and getting jobs, that it was basically kind of holding workers back. And the defense then from the White House was, well, it's temporary. These are not meant to be permanent, and they'll be going away in a few months.

And even as - you know, obviously, this jobs report just came out last week. But what - their argument is that these benefits were never meant to be permanent. They have not tried to keep the benefits. And part of that - it seems like the administration really wanted the crisis of the pandemic to be in a different place and not to be in crisis mode. But they are arguing that with the pandemic, until that is completely under control, they are not going to be able to have this resounding a great economy. And that's what White House economist Cecilia Rouse said.

CECILIA ROUSE: As we've said from the beginning, this is an economic crisis that is being driven by a pandemic. And so in order for us to get to the other side and for us to fully recover, we're going to have to fully recover from the pandemic.

KEITH: And on Thursday, President Biden is set to deliver a speech about the delta variant and what they're going to do to finally get this pandemic in the rearview mirror. We are going to take a quick break. And when we get back, a bit more about unemployment benefits and what they meant for employment.

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KEITH: And we're back. Some states earlier this year ended the expanded unemployment benefits early. They said that there were issues with labor shortages, and they thought that the benefits were so generous that people were simply not returning to work. So many states with Republican governors ended the benefits early. Scott, we talked about this on the pod a few months ago, that this would be this massive natural experiment to test these theories about what unemployment benefits mean for employment. So what did the experiment show?

HORSLEY: Well, there have been a lot of economists that have been looking at what happened in the - roughly half the states that ended the benefits early and the remaining states that kept those benefits going until this week. And what they found is that the difference in employment was pretty marginal. About a quarter of the unemployed people whose benefits were cut off early in the summer had found jobs by August. But almost as many people who were unemployed in states that continue to offer benefits also found jobs. It was 25% versus 21%, so not a huge difference in one study.

Another study actually found that the states that kept paying benefits saw faster job growth than the states that cut the benefits off. And you think, well, why would that be? One reason is the researchers have found that the people who lost benefits dialed back their spending rather dramatically. Not surprisingly, most of them didn't find work right away, so they didn't have benefits. They didn't have a paycheck. They, in many cases, had to cut back their spending. And that reduction in spending might have slowed job growth at the local grocery store or the gas station or, you know, the local restaurant where they didn't have the spending power that they would have had they been continued to receive benefits.

KEITH: And just ending benefits certainly wouldn't have ended the structural challenges that were in place because of the pandemic, whether that be fear of getting the virus on the job or schools not being open or daycares or places for kids to go so that parents could return to the workforce.

HORSLEY: That's right. It's - you know, it's a complicated puzzle and a lot of employers and a lot of economists, frankly, had thought perhaps these relatively generous benefits were discouraging some people from looking for work. It wasn't an unrealistic theory, but the experiment that we've been conducting these last few months suggests that if the benefits played any role, it was a pretty small role in people's decisions about going back to work.

KEITH: Ayesha, this is the POLITICS PODCAST, so let's turn to politics just for a moment. What does this mean for President Biden? You have this sort of weak jobs report. Yes, it is just one month and jobs reports are best consumed as a trend. But our new NPR PBS NewsHour/Marist poll saw that his approval rating took a hit, including when it comes to his handling of the economy.

RASCOE: As I say where I come from, it ain't good. It ain't good (laughter). It is not. It is not a good thing - right? - to be a president and to have an uneven recovery. That's where Obama - although he was able to get reelected, former President Obama got hit with this idea that the economy was recovering after the Great Recession, but that it wasn't recovering the way people thought that it should, that it could have been stronger. It is a difficult place where Biden is trying to get as they - as the administration has said, they have to get the pandemic under control.

The pandemic has not shown itself to want to be under control. Like, there are so many moving factors (laughter). It is very hard to get a pandemic under control, as the world is seeing. And therefore, that makes - that leaves a lot of uncertainty for the economy. And it is serious for people's lives, as we've been talking about. It is also serious for your political livelihood. And so, you know, President Biden is facing some difficulties. And it's not exactly clear how you can overcome that.

KEITH: Yeah. And 1,500 daily deaths are - on average right now. That's a lot. That's getting back to the darker days of the winter.

HORSLEY: That's right. Now, of course, just as you want to look at the jobs numbers over a period of time, you have to do the same with the pandemic. And presumably, this spike in infections and deaths will wane, as previous waves have done. We could be in a very different place come Election Day 2022. But the Biden boom that a lot of economists were forecasting in the springtime when we were vaccinating 4 million people a day and we had all these pent-up savings and people were looking forward to squeezing two years' worth of travel and entertainment into the last half of 2021 to make up for lost time - those forecasts are looking a little too rosy now. And a lot of economists are dialing back their expectations of what the second half of this year is going to look like. It may be that those postponed vacations just get postponed until 2022. I mean, pandemics do end. And this will run its course at some point, but it's certainly taking longer than we had hoped for in the heady days of the spring.

KEITH: All right. Well, we are going to leave it there for now. Thank you, Scott, for bringing your little dark rain cloud to our podcast.

(LAUGHTER)

RASCOE: Well, that was a happy note. He ended on a happy note.

KEITH: (Laughter) It's true.

HORSLEY: You got to have me on some time when the jobs numbers are good.

KEITH: Yeah, next time, when the jobs numbers are good.

All right. I'm Tamara Keith. I cover the White House.

RASCOE: I'm Ayesha Rascoe. I also cover the White House.

KEITH: And thank you for listening to the NPR POLITICS PODCAST.

(SOUNDBITE OF THE BIGTOP ORCHESTRA'S "TEETER BOARD: FOLIES BERGERE (MARCH AND TWO-STEP)")

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