NORFOLK, Va. — Federal unemployment benefit programs end Saturday - including benefit extensions and an additional $300 per week for claimants.
The programs are ending while job growth is slowing, likely due to the Delta variant of COVID-19 and related impacts.
“Infections rise, consumers stay home, so people hire less," said Robert McNab, Old Dominion University economics professor.
The end of federal unemployment benefits likely won’t solve labor shortages in certain industries, as jobs data shows many more people have left the workforce entirely – potentially for family or health reasons.
For months, politicians and many others have floated a narrative that expanded unemployment benefits are to blame for a shortage of retail, service and restaurant workers.
Some states cut benefits early, but labor data shows that had little impact on job growth.
“When comparing states that ended expanded benefits early to states who kept expanded benefits until this week, what that data shows is that job growth was actually higher from April through July in the states that kept expanded unemployment," McNab said.
In Hampton Roads, McNab said it will help when people who are receiving unemployment benefits find jobs, but it won’t solve labor shortages.
"You could take every unemployed worker, put them to work in hotels, bars and restaurants, and you would still have jobs that need to be filled. What does that mean? There’s just people who have left the labor force entirely," he said.
Multiple unemployed workers told 13News Now they're unable to work due to a need to take care of children or family members, or because of health concerns.
McNab said he believes children returning to schools will have a greater impact on the job market than the end of federal unemployment benefits, but he expressed some concern about the regional economic recovery.
"Slowing job growth nationally, ending tourism season in Hampton Roads, and now ending unemployment benefits really doesn’t bode well for a strong recovery in the fall."
At the same time, thousands of unemployed Virginians like Ashley Strickland and Renee Hairston are waiting on the Virginia Employment Commission to resolve issues with their unemployment claims, granting payments.
"At this point, it’s like, come on we need a resolution here, we need to be able to pay the things we need to pay," Strickland said.
The VEC said it will provide backpay including benefits if it’s determined claimants were eligible before the federal programs ended, but many unemployed workers said that feels like a dangerous waiting game.
"It’s a hurry up and wait process, but a lot of us are in situations where we’re barely surviving," Hairston said. "I have cried, I have prayed, I have screamed to myself, just not knowing what to do."
In May, a judge ordered the VEC to fix issues and resolve most outstanding unemployment claims by Labor Day.
Since then, while the VEC resolved most older claims, thousands of new claims were added to the list for review – with people seeking benefits and waiting for answers.
Unemployed workers will still be able to receive regular state unemployment benefits after the federal benefits end Saturday.
However, the extension programs will end, so many workers who lost their jobs in 2020 will no longer be eligible for payments.