New Jersey workers collecting federal unemployment extension will lose unemployment benefits. The decision which affects over 500,000 workers was announced and will come into effect September 4.
According to nj.com, Gov. Phil Murphy said during a COVID-19 briefing that he is not extending the benefits because of the cost which he estimated as hundreds of millions of dollars per week. As a result, workers will no longer receiving a supplemental payment of $300 a week on top of their regular benefits.
President Joe Biden encouraged states with high jobless rates to use federal recovery dollars to offer federal benefits for a longer period of time. However, Murphy rejected the initiative citing while stating that it would cost at least $314 million a week, and perhaps “hundreds of millions of dollars more.”
“The proper way to extend federal (unemployment) benefits is through federal action, not a patchwork of state ones,” Murphy said during his coronavirus briefing. “And it should be noted here that no state is extending this benefit beyond September 4.”
Millions per week
“The reality is that continuing the $300 per week benefit through state resources would be cost-prohibitive. It would cost, at current, at least $314 million per week and perhaps hundreds of millions of dollars more,” he added.
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The Democratic governor said in order to compensate the economic impact of the pandemic the state offers other options. “We recognize the impact that this will have on some families facing unemployment issues. To support New Jerseyans through suffering through the economic impacts of the pandemic we have invested in rent-assistance, food-assistance, child-care assistance, health-care affordability assistance, and other assistance programs we have set up and which are funded through billions of dollars of federal coronavirus relief programs. ”
Other directions
Murphy said stimulus funds from the American Rescue Plan must be used to support small businesses and startups, and that New Jersey “cannot crowd out essential investments in other areas, including for the assistance programs I mentioned, as well as for our schools and colleges and universities.”
“We must ensure that we are appropriating these funds judiciously for the greatest possible long-term recovery,” Murphy said.
Since the start of the pandemic, New Jersey has distributed $33.7 billion worth of jobless benefits, $25 billion of which came from new federal programs.
The Garden State’s unemployment rate is 7.3% and it received $6.2 billion in federal funds from the $1.9 trillion American Rescue Plan. According to federal data at its height during the pandemic, New Jersey’s unemployment rate was 16.6% in April 2020.
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Three federal programs will end since Murphy opted not to extend the benefits.
Cost revised
About 250,000 New Jerseyans were receiving Pandemic Unemployment Assistance (PUA). Another 190,000 people received Pandemic Emergency Unemployment Compensation (PEUC), which adds 13 weeks of benefits for people who exhaust their regular payments. Additionally, people will stop receiving the additional $300 per week supplemental payment.
The administration estimates extending PUA would cost about $70 million to $161 million a week, PEUC would cost an estimated $77 million to $124 million and Federal Pandemic Unemployment Compensation could run between $168 million to nearly $300 million a week.
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