LOUISVILLE, Ky. — Federal funding for extended unemployment benefits will end Sept. 6 in Kentucky and affect 56,000 people. Those benefits include $300 in weekly bonus checks and coverage for people who are self-employed.
More than 20 states already ended these benefits in June. Indiana Governor Eric Holcomb ended pandemic unemployment benefits this summer, but a court of appeals reversed that decision, and benefits will end there Monday as well.
The theory behind ending these benefits is that if people stop receiving them, they will go back to work and fill the jobs that are currently open.
But – research shows that isn’t the case.
A new study analyzing states that already ended benefits this summer shows the theory wasn't correct. It didn’t send people back to work. For every eight workers who lost benefits in early withdrawal states, only one was employed eight weeks later.
It did have other effects though, like loss of money in the state’s economic system.
“If what happens in other states is what happens in Kentucky and happens in the Louisville metropolitan area, we’re going to see more people having financial issues, more people having basic life issues around food and housing and electricity and water,” KentuckianaWorks Director Michael Gritton said. “That will ultimately create problems that policymakers need to solve.”
The things keeping people out of work didn’t go away with the benefits.
“Cutting off unemployment benefits does not necessarily mean you’re going to see this large influx of people going back into the workforce because there are other challenges,” Urban League President and CEO Sadiqa Reynolds said. “Childcare, parental care, illness, death. People are dealing with a lot of things.”
What Gritton said could be a solution is getting COVID under control and getting places like childcare facilities and schools consistently back open.
Both KentuckianaWorks and the Urban League are offering assistance with career opportunities. But even though there is help, there are oftentimes long wait lines for unemployment or eviction assistance.
“We don’t always know the situations that land people where they are,” Reynolds said. “Even though we had unemployment and we had the extra benefits, think about the parent that was living paycheck to paycheck who suddenly lost their job and then had a 60 day, 90 day, 120-day wait to get the unemployment benefits.”