Alaska ends extra unemployment benefits as more enter workforce

Construction workers walk down a city street.
Construction workers walk down 5th Avenue between D and E Streets on a February afternoon. (Jeff Chen / Alaska Public Media)

The state of Alaska says it will end extended unemployment benefits because more people are employed, and an expert says it should not have an impact on the consumer market.

The Alaska Department of Labor and Workforce Development announced the state’s extended benefit period will end Dec. 11, Anchorage television station KTUU reported.

“As of Dec. 11, the extended benefit program will no longer be payable to those individuals that were previously filing for that type of benefits,” Patsy Westcott, director of the Division of Employment and Training Services, said.

The extension in place since May 2020 gave Alaskans the opportunity for additional unemployment benefits, ranging from an additional $56 to $370 a week.

The benefits can trigger on or off depending on the state’s unemployment rate. For extended benefits to continue, a state’s unemployment rate has to be at least 6.5% for a three-month period.

Alaska’s unemployment rate for October was 6.1%, labor department officials said.

“We are now in a situation where, our total unemployment rate has reduced to a level that extended benefits will be triggering off,” Westcott said.

Alaska’s unemployment rate is now similar to what it was before the pandemic, and the loss of added benefits should not adversely affect the consumer market, said Nolan Klouda, executive director of the University of Alaska Anchorage’s Center for Economic Development.

Benefits paid under a federal program passed by Congress last year ended in June in Alaska. The loss of those benefits had more impact at “the macro level” than losing the extended benefits will, said Nolan Klouda, executive director of the Center for Economic Development.

The federal program’s benefits had an impact on how much spending was done in the market, but Klouda said the extension did not cause a similar trend. Instead, the economy is busting right now for job seekers, he said.

“We have a market right now that is hiring fast, that is starved for workers, and so those who are seeking jobs have a lot of options and are seeing even some wage growth in what’s available out there,” Klouda said.

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