Expanded pandemic-related unemployment programs ended on Labor Day.

Labor Day rung down the curtain on a pair of unemployment benefits programs put in place in the early days of the pandemic. The Associated Press reports,

Two critical programs expired on Monday. One provided jobless aid to self-employed and gig workers and another provided benefits to those who have been unemployed more than six months. Further, the Biden administration’s $300 weekly supplemental unemployment benefit also ran out on Monday.

It’s estimated that roughly 8.9 million Americans will lose all or some of these benefits.

The federal response ran into billions of dollars.

The amount of money injected by the federal government into jobless benefits since the pandemic began is nothing short of astronomical. The roughly $650 billion, according to the nonpartisan Committee for a Responsible Federal Budget, kept millions of Americans who lost their jobs through no fault of their own in their apartments, paying for food and gasoline, and keeping up with their bills. The banking industry has largely attributed the few defaults on loans this past 18 months to the government relief efforts.

The hope is, of course, that a recovering economy will bring more people into the workforce. So far, as the AP notes, the effects are unclear-to-nil, at least in the data from states that opted to end the programs early.

Economists Peter McCrory and Daniel Silver of JPMorgan found “zero correlation″ between job growth and state decisions to drop the federal unemployment aid, at least so far. An economist at Columbia University, Kyle Coombs, found only minimal benefits.

In another AP story, administration officials sound cautiously optimistic.

President Joe Biden’s administration believes the U.S. economy is strong enough not to be rattled by evictions or the drop in unemployment benefits. Officials maintain that other elements of the safety net, like the Child Tax Credit and the SNAP program (which Biden permanently boosted earlier this summer) are enough to smooth things over. On Friday, a White House spokesperson said there were no plans to reevaluate the end of the unemployment benefits.

“Twenty-two-trillion-dollar economies work in no small part on momentum and we have strong momentum going in the right direction on behalf of the American workforce,” said Jared Bernstein, a member of the White House Council of Economic Advisers.

Labor Secretary Marty Walsh said he believed the country’s labor force was ready for the shift.

“Overall the economy is moving forward and recovering,” Walsh said in an interview. “I think the American economy and the American worker are in a better position going into Labor Day 2021 than they were on Labor Day 2020.”

Walsh and others point to encouraging job numbers; as of Friday the unemployment rate was down to a fairly healthy 5.2%.

Calculated Risk writes that the number is not as encouraging as it sounds.

The headline unemployment rate of 5.2% significantly understates the current situation. 

Follow the link to see the calculations. He adjusts “the number of people that have left the labor force since early 2020, and the expected growth in the labor force.” The 5.2% then becomes 7.9%. CR acknowledges,

As the economy recovers, many of the people that left the labor force will probably return, and there will likely be more entrants into the labor force (although recent demographic data has been dismal).

Relatedly, a report on how labor shortages are accelerating automation.

The pandemic didn’t just threaten Americans’ health when it slammed the U.S. in 2020 — it may also have posed a long-term threat to many of their jobs. Faced with worker shortages and higher labor costs, companies are starting to automate service sector jobs that economists once considered safe, assuming that machines couldn’t easily provide the human contact they believed customers would demand.

Past experience suggests that such automation waves eventually create more jobs than they destroy, but that they also disproportionately wipe out less skilled jobs that many low-income workers depend on. Resulting growing pains for the U.S. economy could be severe.

An acceleration of a pre-pandemic trend, we believe, an another argument for more and better skill-training and education.