More than 1.9 million Americans will lose federal unemployment benefits beginning in June, as a growing list of states have announced they will cut off federal aid to workers.
As of Thursday, 17 U.S. governors, each citing a drag on their state’s growth due to worker shortages, have said they will no longer participate in the federal unemployment benefits program.
The benefit, which is now $300 a week to those out of work, was part of the original COVID-19 stimulus bill passed in March 2020. It was initially $600 a week, and after it expired on July 31, 2020, was extended in subsequent COVID-19 aid packages. The money is paid in addition to state unemployment benefits.
The extra federal benefit, coupled with regular state unemployment benefits, helped replaced the wages of many workers who were laid off due to the pandemic. Lower-income earners, however, were often seeing more in the combined unemployment benefits than they saw in their regular paycheck.
Montana Gov. Greg Gianforte on May 4 was the first to announce his state would no longer take federal unemployment aid. Since then, 16 more governors, all Republicans, have announced their states will also cut off the federal unemployment funds. In addition to Montana, the states ending federal unemployment aid are: Alabama, Arizona, Arkansas, Georgia, Idaho, Iowa, Mississippi, Missouri, New Hampshire, North Dakota, Ohio, South Carolina, South Dakota, Tennessee, Utah and Wyoming.
The federal unemployment program also helps the self-employed, gig workers and others who don’t qualify for state unemployment insurance. The federal aid to those groups will end, as well.
While the bonus federal unemployment payments are set to continue through Sept. 6, the aid will end in June or early July for those in the states who have announced they are no longer going to accept the money.
Idaho’s Gov. Brad Little told reporters Tuesday, “We want people working. My decision is based on a fundamental conservative principle — we do not want people on unemployment. A strong economy cannot exist without workers returning to a job.”
President Joe Biden on Monday disagreed with the idea that federal unemployment benefits were stunting economic recovery, saying Americans would return to work if they are paid enough to do so.
“People will come back to work if they’re paid a decent wage,” Biden said. “My expectation is that, as our economy comes back, these companies will provide fair wages and safe work environments. And if they do, they’ll find plenty of workers.”
Biden also stressed to those collecting unemployment benefits that if they are offered a suitable job, they must accept it or give up the federal payments.
“We’re going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits,” Biden said Monday. “That’s the law.”
The U.S. Chamber of Commerce called for an end to the federal program last week, following a monthly U.S. jobs report that fell well short of what economists had been expecting.
“The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market. We need a comprehensive approach to dealing with our workforce issues and the very real threat unfilled positions pose to our economic recovery from the pandemic,” the organization’s news release read.
”One step policymakers should take now is ending the $300 weekly supplemental unemployment benefit. Based on the Chamber’s analysis, the $300 benefit results in approximately one in four recipients taking home more in unemployment than they earned working.”
U.S. employers added 266,000 jobs in April, not the 1 million jobs economists had forecast. That number represented the weakest monthly gain in jobs since January.
While state governors are blaming the bonus benefits for unfilled jobs, others argue that the federal benefits are not what is keeping workers at home.
“Unemployment insurance is not a disincentive. It’s actually the main tool by which we keep people who are out of work supported in their goal to return to work,” said Michele Evermore, senior adviser on unemployment insurance for the U.S. Labor Department.
Several Democratic members of Congress echoed the same sentiment.
“The disappointing April jobs report highlights the urgent need to pass President Biden’s American Jobs and Families Plans,” House Speaker Nancy Pelosi, D-California, said in a statement. Pelosi was referring to Biden’s call for a $4 trillion spending bill for infrastructure, child care, education and other issues.
Washington Democratic Rep. Pramila Jayapal argued that the minimum wage, not unemployment benefits, is the cause of the labor shortage.
“Don’t blame unemployment insurance for an inability to hire servers,” Jayapal tweeted last week. “Blame the median $11/hour wage.”
Here are the dates states will be ending federal unemployment benefits:
- Alabama, effective June 19
- Arizona, effective July 10
- Arkansas, effective June 26
- Georgia, effective June 26
- Idaho, effective June 19
- Iowa, effective June 12
- Mississippi, effective June 12
- Missouri, effective June 12
- Montana, effective June 27
- New Hampshire, date not yet announced
- North Dakota, effective June 19
- Ohio, effective June 26
- South Carolina, effective June 30
- South Dakota, effective June 26
- Tennessee, effective July 3
- Utah, effective June 26
- Wyoming, effective June 19
Cox Media Group