News & Commentary

September 5, 2021

Kevin Vazquez

Kevin Vazquez is a staff attorney at the International Brotherhood of Teamsters. He graduated from Harvard Law School in 2023. The opinions he expresses on this blog are his own and should not be attributed to the IBT.

This weekend, an estimated 8.9 million workers and their families will lose federal unemployment benefits entirely, and more than 2 million more will have their weekly checks reduced by $300 per week, as two key federal unemployment programs expire. Pandemic Unemployment Assistance (PUA), which provided unemployment benefits to many workers not included under traditional unemployment programs, like gig or self-employed workers, and Pandemic Emergency Unemployment Compensation (PEUC), which enhanced traditional unemployment insurance programs by providing additional weekly benefits, are both set to expire on Labor Day, and the Biden administration appears uninterested in extending them. New as they are, both programs have had rather convoluted trajectories as federal law. They were initially included as part of the CARES Act – the $2 trillion stimulus signed into law by President Trump in March 2020 – and then, after lapsing briefly in December 2020, were extended after weeks of intense negotiations between Democrats and Republicans before President Biden’s inauguration. Finally, both were again included in the American Rescue Plan – the $2 trillion stimulus package signed by President Biden in March 2021 – and set to expire less than six months later, on Labor Day. Even before the intended expiration date, however, 26 Republican-led states, apparently in response to the lamentations of business owners and conservative economists that the enhanced federal benefits purportedly disincentivized “legitimate” work, i.e., the selling of one’s labor-power to another to earn them a profit while earning oneself a paltry wage in return, and thereby instigated the supposed nationwide labor shortage and disrupted the resurgence of the economy, opted to discontinue their participation in the programs early, restricting access to most federal benefits for their residents.

While the decision to discontinue the enhanced benefits in September may have been somewhat sensical, at least theoretically, when made in March – an optimistic point at which the three FDA-approved vaccines were being introduced to the general public, cases were falling, and unemployment numbers were improving – it makes little sense now that the Delta variant has substantially disrupted both our economic and social recovery. New infections have reached their highest point since January 2021 (although the rate of growth does appear to be slowing), many hospitals are overflowing with intubated patients, and millions of workers remain unemployed or underemployed and dependent upon the enhanced benefits for survival. Moreover, after last week’s Supreme Court ruling overturning the C.D.C.’s extension, the federal eviction moratorium has also expired, putting 11 million renters at risk of eviction nationwide. Allowing the enhanced benefits to expire now, amid an ongoing (and resurging) public health and economic crisis, does not make sense on an ethical, practical, or even political level. The federal benefits remain a critical lifeline for millions of workers and their families, many of whom, faced with the prospect of paying months in accumulated back rent or being evicted, will be plunged almost immediately into precarity and insecurity – not to mention potential houselessness – after their expiration. Local and even national newspapers are replete with personal accounts of workers whose lives will be upended, and sometimes virtually decimated, by the discontinuation of the federal benefits. In fact, as Matt Bruenig noted for the People’s Policy Project, according to the Department of Labor’s latest Unemployment Insurance report released earlier this week, 9.2 million people are currently receiving benefits from one or both of the two federal programs, and the average household receiving such benefits has 3.8 members, meaning that 35 million people – or 10 percent of the population – are going to lose a substantial portion of their income. In addition, according to the BLS’s latest monthly jobs report, the economy still has 5.3 million fewer jobs than it did in February 2020, immediately preceding the pandemic.

Moreover, there is little evidence that the cessation of the enhanced benefits will provoke job growth or improve economic recovery by ending the labor shortage. States that ended their participation in the programs early were shown to have higher job growth in only a few studies – and even then only marginally: the relationship was not statistically significant in any of the studies. Most research, in fact, has found no correlation at all between the expiration of the benefits and job growth, and any marginal benefits that do exist are more than offset by the harm caused. One study, for example, found that workers lost an average of $278 per week when benefits were reduced or eliminated, and they gained just $14 a week in earnings. This decrease in disposable household income leads to reductions in spending, which depresses market demand and further harms local economies. To put it simply, cutting off benefits, even after accounting for any potential job growth caused, has left the average worker worse off than before and will, in addition to augmenting human misery, also hinder economic recovery. For these reasons, among others, many unions, such as SEIU and UNITE HERE, have vociferously opposed the expiration of the benefits and its predictable impact on their members, but their warnings have thus far gone unheeded.

In other news, union locals around the country are preparing to host Labor Day events, many of which will be celebrated virtually, and some are using the holiday as an opportunity to remind us that, while the labor movement has achieved many incredible victories for working people, our task is far from finished. “We should each take pride in a holiday that commemorates us, labor unionists, both past and present, for our contributions in shaping our nation’s history and society as a whole,” says a statement released by the UAW, before noting: “Our work in the labor movement and shaping society isn’t done.  We still have to fight voter suppression bills, anti-labor legislation as well as being involved in the passage of the PRO-ACT.” Labor Day is not only an occasion to honor and celebrate the accomplishments of the labor movement but an opportunity to reflect on how much work remains to be done.

With that in mind, this year’s Labor Day arrives at a relatively optimistic moment for the labor movement, though not one without its challenges. The many gains made by organized labor during the pandemic, despite numerous setbacks, have been well-documented, including here in OnLabor. Moreover, earlier this week, a Gallup poll showed that the approval of labor unions is at its highest point since 1965. 68 percent of Americans approve of labor unions, including 77 percent of workers aged 18-34, 72 percent of those with annual household incomes under $40,000, and even 47 percent of Republicans. Support for labor unions has increased among virtually every major demographic since 2016; it has, according to Gallup, “been trending upwards in recent years and is now at its highest point in more than half a century.” Most promisingly, support from Democrats is nearly unanimous: 90 percent said they approve of labor unions, the highest in any Gallup poll to date. Yet, despite these remarkable numbers, only 6 percent of private-sector workers actually belong to a union, a bleak reminder that U.S. labor law is deeply flawed and the PRO Act is long overdue.

On that note – and for those interested in some light Labor Day reading – labor journalist Steven Greenhouse authored an essay in the New York Times on Saturday entitled “How Biden Can Help Democrats Become the Party of the Working Class Again.” Greenhouse argues that, despite the Republican Party’s awkward and dishonest attempts to rebrand itself as pro-worker – which has been chronicled in OnLabor before – the Democrats can again become a true working-class party by passing Biden’s $3.5 trillion infrastructure plan and, of course, the Pro Act. Whether Democrats will seize the opportunity, however, or instead allow Republicans to continue to peel off working-class support, remains to be seen.

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