Unemployment benefits expired for 1.3 million Americans on December 28 and another 1.9 million could lose their benefits by mid-2014 because Congress did not extend a program that provides benefits to the long-term unemployed. While Democrats say they’ll push to reinstate them when Congress reconvenes in January, some small-business owners fear the benefits cut could affect their own livelihood.

Troy Ballard, owner of Troy’s Beauty & Barber Shop in San Bernardino, California—which has a 9.8 percent local unemployment rate—expects fewer customers in his shop due to the cuts. “It impacts us greatly,” he told NPR’s Marketplace. “Because if you’re not employed you can’t get your hair done.”

Economists say that income cuts to lower-income Americans can be especially painful to businesses because those consumers tend to spend their paychecks immediately and not stockpile cash for the future. People who are unemployed and have lost their income stream will be far less likely to spend money on discretionary costs—whether haircuts, restaurant meals or clothing—because they simply don’t have the money for it.

JPMorgan economist Michael Feroli forecasts that the United States economy could suffer overall due to the federal unemployment benefits program cuts. The Federal Emergency Unemployment Compensation (EUC) program “currently pays out benefits at around a $20-25 billion annual rate; should that flow dry up, consumer spending could take a hit in 1Q, perhaps subtracting around 0.4%-pt from annualized real GDP growth in that quarter,” he wrote.

Areas hardest hit by the U.S. recession with the highest unemployment rates are most likely to face the biggest impact from the EUC cuts.

Tammy Parker, owner of a salon in Rockford, Illinois said she expects the unemployed in her area will continue to come in for haircuts and such. However, she wouldn’t be surprised to see a dropoff in the number of more luxury services, like facials. “If I’ve seen any kind of slump it’s in our aestheticians,” she told NPR. “People are maybe not getting a facial that they might have treated themselves to prior.”

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