Home Business Unemployment benefits to end for millions in April without more relief

Unemployment benefits to end for millions in April without more relief

People line up to receive free food donations Nov. 19, 2020 outside the St. Charles Borromeo Church in New York City.

Robert Nickelsberg | Getty Images News | Getty Images

Nearly 11 million Americans will lose unemployment benefits in about two months without additional Covid relief, according to a new analysis.

That so-called benefits cliff is larger than the one workers faced in December when Congress was debating the contours of a $900 billion pandemic aid measure, according to research published Wednesday by The Century Foundation, a left-leaning think tank.

However, Democrats appear poised to pass a $1.9 trillion relief package proposed last month by President Joe Biden within a few weeks, which would avert another cliff.

Unemployment benefits cliff

Biden stimulus plan

However, some opponents believe Biden’s stimulus plan could ultimately harm the U.S. economy by offering people an incentive to remain out of work.

“Increasing weekly unemployment benefits sounds compassionate, but perversely, doing so has proven to lead to higher unemployment rates,” said Matthew Dickerson, a budget analyst at conservative think tank The Heritage Foundation.

Economic studies didn’t find evidence of such a disincentive effect during the spring and summer, when Washington paid a $600 weekly unemployment supplement to workers but jobs were scarce. It’s unclear how extra benefits would affect workers in the current economy, according to economists.