FORT WAYNE, Ind. (WANE) — The pandemic’s unemployment benefits expired over Labor Day weekend, meaning that millions of Americans will no longer receive an extra $300 weekly.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act allowed workers impacted by the pandemic, who aren’t usually eligible for unemployment benefits, to receive unemployment insurance. Those collecting unemployment received the additional $300 from the federal government, on top of state benefits.
Now that the program has expired, many are wondering what this means for Fort Wayne’s economy.
“In sum, this just means that there are going to be fewer dollars flowing through the economy if these folks who are receiving those benefits don’t return to paid employment,” said Rachel Blakeman, the director of Purdue University Fort Wayne’s Community Research Institute.
Blakeman said its fair to assume that the people who were receiving the benefits were likely spending the money “essentially as soon as it came in.” Therefore, money was immediately entering the economy and now won’t be. So, the loss of those dollars, means the loss of money to our economy.
She said the benefits expiring isn’t likely the answer to the area’s labor shortage problem.
“Anybody who’s thinking that the the end of these supplemental benefits is going to solve the labor shortage, really simply cannot do the math,” Blakeman said.
According to the Indiana Department of Workforce Development, in the Fort Wayne area’s 11 county region, there were 1,289 people receiving continued unemployment benefits as of August 21, 2021.
However, Blakeman says there are “far more than 1,300 open jobs in Northeast Indiana.”
“So, if we were to literally take everyone off of the unemployment roll so everybody who wanted a job, got one, or anybody who wanted a job was now employed, then you would still have a labor shortage,” she said.
While the expiration of benefits won’t solve the labor shortage issue, Blakeman said it also won’t necessarily hurt it either. She added that some who may have been more hesitant to go back to work because of concerns such as childcare, may be forced to.
Blakeman said that it’s important to remember that the unemployment benefits were put in place for the pandemic and that we’re still seeing a rise in COVID cases.
“Most of us are working out of economic necessity. So, there’s going to be a point where for a lot of families, especially if it’s two incomes, potentially two income earners are they going to decide that once that both of them need to return to work,” Blakeman said. “If you’re living alone, and you’re not retired, not collecting disability benefits, you’re probably going to work. So, there’s a financial component to decisions.”
Although the cases are on the rise, Blakeman said she doesn’t predict that the nation will see an extension of the benefits.
“There was a reason to do that 18 months ago when we had no treatment, no vaccine. The thought of keeping people at home… that made a lot of sense,” she said. “That makes less sense now in the reality of where we are around. Now if we were to get a situation where we had a variant that escaped the vaccine and so we have lost that ability, maybe that would come on the table.”