Eleven states have now ended the expanded federal unemployment program early in an effort to reinvigorate the labor market.
Alabama, Idaho, Nebraska, New Hampshire, North Dakota, West Virginia, and Wyoming all stopped the program on Saturday, joining Alaska, Iowa, Mississippi, and Missouri to bring the benefits to an early conclusion last weekend. That means about 8% of the total U.S. population has phased out of the pandemic-era assistance ahead of schedule — a number that reportedly amounts to about 417,000 workers currently receiving the $300 payments.
The supercharged benefits program gives unemployed Americans $300 per week on top of whatever their state already provides. The expanded benefits were intended to help those sidelined by the pandemic, although some economists and lawmakers fear it has incentivized unemployment.
The entire expanded unemployment benefits program is set to end on Labor Day. However, a total of about two dozen states (including those that have already stopped providing payments) announced early sunsets.
While demand is roaring back as vaccines go into arms, the labor market is struggling to keep up.
The economy fell slightly short of expectations last month, adding 559,000 new jobs, which was below the 650,000-consensus level. The month before jolted economists when only 278,000 jobs were added, a figure falling way below predictions of nearly 1 million new jobs.
Some employers have also complained about finding workers to fill openings, especially for jobs that pay lower wages. The national average of statewide unemployment insurance before the pandemic was $387 per week, meaning unemployed people in America are now netting $687 on average with the $300 expansion — that equates to a $17.17 hourly wage, more than double the federal minimum wage.
“The government is actually hurting more than it’s helping in this area of getting people back to work because they’ve had [this] extended unemployment insurance a bonus, $300 per week,” Rachel Greszler, an economics research fellow with the Heritage Foundation, recently told the Washington Examiner. “We’re hearing from employers across the country that their biggest problem is just getting the workers that they need to ramp their businesses back up.”
There has been a bit of a shift in tone from the Biden administration about early end dates. In early May, President Joe Biden defended the increased funds as a “lifeline” for millions and said, “We don’t see much evidence,” that people are opting to collect unemployment rather than find jobs. But in a speech this month, he highlighted the temporary nature of the payments and said it “makes sense” they end in 90 days.
While some Democrats on Capitol Hill vowed to stop states from cutting the expanded unemployment benefits, the White House affirmed this month it would not oppose states that want to cut the program’s cord early. White House press secretary Jen Psaki recently said governors “have every right” to end them.
“It is important for people to understand, factually, that the president, no one from the administration, has ever proposed making these permanent or doing it over the long term,” she said during a press conference.
A recent study by employment website Indeed found that job search activity rose, relative to the national trend, in the states opting out of the program. A state’s share of national clicks, on average, was up 3%-4% from the day of the announcement to three days later, the study found. Search activity settled back down after that.
The next states set to end the program early are Arkansas, Florida, Georgia, Ohio, Oklahoma, South Dakota, Texas, and Utah on June 26. Montana will end the benefits on June 27, South Carolina on June 30, Maryland and Tennessee on July 3, Arizona on July 10, and Indiana on July 19.
“While these federal programs provided important temporary relief, vaccines and jobs are now in good supply,” said Maryland Gov. Larry Hogan in a statement. “And we have a critical problem where businesses across our state are trying to hire more people, but many are facing severe worker shortages.”
Author: Zachary Halaschak
Source: Washington Examiner: Pandemic unemployment boost gone for nearly 8% of population