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Federal unemployment benefits to end next week in Alaska, Iowa, Mississippi and Missouri

By Masao Suzuki

San José, CA – On Saturday, June 12, four Republican-led states cut off three federal unemployment benefit programs. These were the Federal Pandemic Unemployment Compensation or FPUC which provides a $300 per week supplement to regular benefits, the Pandemic Unemployment Assistance, or PUA for self-employed and gig workers, and the Pandemic Emergency Unemployment Compensation or PEUC, for the longer-term unemployment who state benefits have run out. This means that 370,000 who have lost work in Alaska, Iowa, Mississippi and Missouri will be losing their benefits starting next week.

These cuts will fall the hardest on African Americans, Chicanos and Latinos, and Native Americans who have higher unemployment rates than whites. For example, in Mississippi, one of the four states ending federal benefits now, two-thirds of those collecting unemployment are African American, which is almost twice their percentage of the population.

These four states will soon be followed by 21 more Republican-led states which will also cut benefits for these federal programs. This will end benefits for more than 3 million more unemployed. The end of the $300 a week supplement will drop the average replacement in these states from 60 to 90% of their previous income down to 25 to 50%. The purpose is to drive the unemployed to take jobs at low wages that will further increase businesses’ bottom line. Many of these governors or their families own businesses that will benefit from being able to keep wages low.

The PUA and the PEUC provide benefits to almost 12 million people, who are more than three-quarters of all the jobless getting unemployment benefits. These two programs, along with the FPUC, will expire on September 6, unless the federal government passes an extension. This will cut an additional 8 million people from their unemployment benefits.

These benefits are being cut even as the federal eviction moratorium is ending on June 30. With more than 10 million tenants behind on their rent, the unemployment cut will just add to the number of renters facing eviction.

The weekly new claims for unemployment insurance have hit new pandemic lows and are less than 10% of the peak in April of 2020. However, the number of new claims last week are still more than twice the weekly number of claims in February 2020 when the recession began. The total number of people collecting unemployment insurance has declined more slowly, to more than 15 million in the latest numbers from a peak of more than 30 million last May. So, while businesses are laying off fewer workers, the number of jobless workers who need unemployment benefits to survive is still very high, seven times the number when the recession began.

Corporate profits are at an all-time high. The monopoly capitalists who own and control the large corporations have seen their wealth soar with new record highs in the stock market. But there are more than 7 million fewer people working than before the recession started in February. Companies are using the recession to reduce their labor costs to boost profits. What workers can actually buy with their wages is down 3%, as inflation is rising faster than paychecks.

Mainstream media claims that prices are rising because people are spending. But the economy has become even more dominated by big corporations during the recession; with small businesses folding, big businesses are selling and profiting more. These corporations can raise prices to increase their profits without a lot of competition. One example of this is Campbell Soup, whose sales are falling as people venture to eat out more. What did Campbell Soup do? They raised prices to protect their profits.

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