AOC says ending federal unemployment benefits was 'based on fantasy, not data'

Rep. Alexandria Ocasio-Cortez tweeted that letting federal unemployment expire was based on fantasy - not data.
Research on ending benefits early continually showed little impact on job growth and employment.
Ocasio-Cortez has introduced legislation to extend benefits through February 2022.
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Rep. Alexandria Ocasio-Cortez is shaking her head at employers who are flabbergasted people haven't flocked back to work after federal unemployment benefits expired in early September.

"You can't force people to work a job that doesn't pay enough to live," she said in a tweet. She was writing in response to a Bloomberg article by Katia Dmitrieva and Olivia Rockeman that said employers are "baffled" as applications don't roll in, even with the benefits gone.

When federal unemployment benefits meant to expand and enhance the social safety net for Americans who lost their jobs during the pandemic expired on Labor Day, millions of incomes were drastically slashed. Gig workers and freelancers were particularly impacted, as they were newly eligible for benefits during the pandemic under the Pandemic Unemployment Assistance (PUA) program. That program made up the greatest share of federal unemployment distributed in 2020, and advocates have seized on its widespread adoption as an argument to permanently expand eligibility to a wider variety of workers. In the week ending August 28 - right before benefits ended - more than five million Americans had continued claims for PUA.

While the end of benefits like PUA was ostensibly meant to get Americans back to work, that doesn't seem to have happened yet. But why? Ocasio-Cortez tweeted "this isn't hard," asking what's the point in working a minimum-wage - or even $15 an hour - job if childcare costs as much as someone gets paid?

"Letting PUA expire was based on fantasy, not data. We must restore it," she said.

-Alexandria Ocasio-Cortez (@AOC) September 20, 2021

Prior to the September 6 expiration of all federal unemployment benefits, 26 states opted out of benefits early. In those states that cut off UI early - only one of which is led by a Democrat - several officials referenced the need to get people back to work and plug up labor shortages.

However, research has continually shown that cutting those benefits off early had little impact on job growth and employment - but it did deliver a big economic blow to the states that opted out. One analysis by researchers at University of Massachusetts Amherst, Harvard University, Columbia University, and University of Toronto found that consumer spending in those early cut-off states fell by $2 billion.

Ocasio-Cortez has been at the forefront of the small group of lawmakers pushing for an extension. In August, she told Insider's Joseph Zeballos-Roig that the "Biden administration has indicated they have almost no willingness to extend the pandemic unemployment assistance program," but that progressives were "looking into" legislative action. In an interview with the Washington Post, Ocasio-Cortez said that she had been pushing the administration for months - alongside others in the Congressional Progressive Caucus - to extend the benefits.

Last week, Ocasio-Cortez introduced the "Extend Unemployment Assistance Act of 2021," which would extend benefits through February 1, 2022 - and would pay out benefits retroactive to their September expiration.

"We can't let pandemic unemployment assistance lapse when we're still recovering from the cost effects of the pandemic," Ocasio-Cortez tweeted.

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