In US, 2.5 million unemployed soon to be without income

WASHINGTON: States across America are moving to cut pandemic unemployment benefits, a painful blow for millions of people who will soon be left without income.

With punishing jobless levels during the Covid-19 pandemic, unemployment benefits had been extended -- especially to the self-employed -- and extended further until September 6, even for those who had reached the maximum duration.

But now 21 out of 27 states governed by Republicans -- including Missouri, Alaska, West Virginia, Indiana and Georgia -- will soon reduce or eliminate additional unemployment aid, according to a note from analysts at Oxford Economics out Wednesday.

This means that some 2.5 million people out of the 16 million unemployed Americans will receive no more help starting in June or July, depending on the state, the analysts said.

One million more unemployed people will lose the additional $300-a-week benefit.

"It's going to be devastating," said Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center, an organization that advocates for the rights of low-income residents.

"It's going to have a huge effect if families don't have the stability of income coming in, and they can't keep the lights on, or they're unable to keep up with their housing or rent payment and all the other bills.

All that has a detrimental effect on kids," she said.

Unemployment payouts vary from state to state and ranges between $230 and $820 per week, an amount that was raised by $300 as the effects of the pandemic hit.

With the US economic recovery underway many companies are now struggling to recruit, but the jobs that remain unfilled can be low-skill, low-pay openings.

South Carolina, for example, has a minimum wage fixed to the US federal government standard - $7.25 per hour. Other states have raised their minimum wage much higher than the federal bar.

South Carolina's Republican governor, Henry McMaster, said in a May 6 letter that unemployment benefits are "incentivizing and paying workers to stay at home rather than encouraging them to return to the workplace".