Thousands of Mainers are set to lose unemployment pay after this week with the expiration of federal programs created at the start of the coronavirus pandemic.

Aid for those ineligible for traditional unemployment insurance, a year-long benefits extension and an added $300-per-week payment will end permanently Saturday after being established a year and a half ago and repeatedly renewed by Congress. According to Maine Department of Labor statistics released Thursday, up to 22,400 Maine workers could lose benefits when federal programs established under the CARES Act in March 2020 expire.

The shrinking safety net may leave workers struggling to make ends meet, as skyrocketing COVID-19 cases spread uncertainty about the state’s economic recovery and return to pre-pandemic life.

Before COVID-19 hit, Valerie Kazarian, 69, worked as a contractor for a Portland-area nonprofit and sold liturgical accessories to supplement her Social Security benefits.

Those jobs dried up as Maine went into lockdown last spring, and Kazarian relied on newly created federal unemployment programs to stay afloat.

When that support disappears, she expects to be in a more difficult financial situation than she was before COVID-19. Kazarian said she’s been looking for part-time work for months, with no success. She suspects her age has kept her from finding work.

“Once unemployment ends and I don’t have a job, Social Security won’t be enough,” Kazarian said. “That is enough to get by on, but there is no money for Christmas presents, (and) the car payment may have to go by the wayside. People are always complaining that people like me get handouts, and unemployment is a gift from the gods, but it is going to be quite a jolt to go back to four years ago when I didn’t have a job.”

Contractors, self-employed workers and others ineligible for state unemployment insurance funded with payroll taxes will lose their federal Pandemic Unemployment Assistance benefits, one of the major programs established by the CARES Act.

More than 14,000 claimants in Maine for Pandemic Emergency Unemployment Compensation, another federal pandemic program that extended jobless benefits for up to a full year, also will see their aid cease.

And as many as 7,000 Mainers receiving state unemployment benefits will see their weekly check cut in half after a $300-per-week federal benefit is cut. The average weekly check for those receiving state jobless aid was about $338 in June.

Some Mainers whose federal benefits are ending may qualify for state unemployment insurance, according to the Maine Department of Labor. About 3,700 claimants who were moved from state to federal programs by the department could continue receiving payments after Saturday, a department spokesman said.

DEBATE OVER RAMIFICATIONS

Political conservatives and pro-business groups have claimed for more than a year that generous unemployment programs, including added weekly pay, created a disincentive for people to return to work.

In Maine, the pandemic exacerbated an already tight labor market. Some employers starved for workers have cut back hours or limited services and increased wages and benefits to attract employees.

Maine’s longstanding labor market problems are complicated, but ending federal jobless aid is likely to encourage some people to go back to work, said Dana Connors, president of the Maine State Chamber of Commerce.

“It is hard to say with certainty, but clearly it will help – it will motivate some but will fall short of solving our workforce challenge,” Connors said. “People are begging for workers, period, (and) anything you can do that will help that situation is pretty fundamental.”

At least 25 states cut off all or some federal unemployment programs months before they expired, hoping it would push people back into the workforce.

Early research, including a widely cited paper from economists at Columbia and Harvard universities and the universities of Toronto and Massachusetts, indicate those state decisions had minimal success filling vacant jobs, but led to immediate spending declines as people lost income.

Losing additional unemployment benefits will have economic effects, but the severity of the impact is uncertain, said Maine State Economist Amanda Rector. Maine paid out about $5.5 million to people in the two federal programs in the last week of August.

“We are still in uncharted territory, and particularly given what is currently happening with the (COVID-19) delta variant, it’s hard to say what the coming weeks and months will look like,” Rector said. “Households have known about the end date for a while now, and so hopefully have been planning as best they can, but we’re in a different place public health-wise than we were even just a month ago, which may complicate people’s abilities to return to work.”

WORKERS FACE HURDLES

Expanded benefits may have kept some workers from taking the first job that came along, but other hurdles prevented people from returning to regular work.

An absence of affordable child care and remote or hybrid school schedules hampered some parents, especially women, from returning to regular employment. Others, including older Mainers and vulnerable people, still may feel unsafe taking public-facing jobs as Maine’s COVID-19 cases and hospitalizations surge to their highest levels in months.

“The vast majority of people on unemployment insurance right now are going to lose it, and it is going to be really difficult,” said Andy O’Brien, communications director for the Maine AFL-CIO.

Older workers are having an especially difficult time finding work, either because of age discrimination or health concerns, he added. More than 4,000 Maine workers 65 or older collected unemployment benefits in July, 12 percent of total claimants.

“They are struggling to pay rent, house payments, car payments,” O’Brien said. “We are going to see a lot of people who are really going to suffer because the safety net is going to be pulled out from under them.”

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