Republican Governors Cutting Federal Unemployment Benefits For 4 Million
Four million workers will start losing unemployment benefits next month as Republican governors opt out of federal benefit programs enacted in response to the coronavirus pandemic.;
Florida announced Monday it would drop the extra $300 that the federal government has been adding to weekly benefits so that workers would be more willing to accept lower-wage jobs.;;
Transitioning away from this benefit will help meet the demands of small and large businesses who are ready to hire and expand their workforce, state labor secretary Dane Eagle said in a press release.;
As of Monday morning, 23 states have announced theyll discontinue the federal benefits, according to The Century Foundation, a think tank that analyzes economic policy.;
Florida, Ohio, Alaska and Arizona are only dropping the $300 benefit, while the other states taking action are also canceling federal benefits for gig workers and the long-term jobless. About half of the 4 million workers will continue receiving state benefits, which average less than $400 per week. The other half will be left with nothing.;
Sarah Brown of Brownsburg, Indiana, gets $469 per week $169 in federal long-term benefits for workers whove exhausted their state benefits, plus the extra $300. Indiana announced last week that it would cancel the benefits in June.;Brown earns some money from a temporary part-time job helping people file their taxes, but her benefit income will cease entirely.
Federal Policy Created The Cliff Federal Policy Can Fix It
On July 29, the Biden administration called on Congress to extend the eviction moratorium just two days before it expired, which wasnt enough time to prevent the chaos the looming expiration caused.40 While there may not currently be political will to continue pandemic unemployment benefit programs, the pressure may grow as a similar deadline approaches. Congress and the Biden administration should start planning now and consider various options for a temporary renewal of some or all of the pandemic unemployment programs until the end of the year, when a far greater share of workers should be able to find work, vaccinations will have reached their goal in more states, and the impact of the Delta variant will be better understood and the economy will be able to respond accordingly.
Million Additional Workers Will Lose Benefits In States That Cut Programs Early
Millions of additional workers will be impacted by the ending of pandemic unemployment benefits. Nineteen states have already cut off PUA and PEUC. A total of twenty-six states moved to end at least one of the pandemic unemployment programs, but state judges reversed the decision in Indiana, Maryland, and Arkansas, and Alaska, Arizona, Florida, and Ohio remained in the PUA and PEUC programs.11 While the list includes many of the smaller states in the Midwest and Mountain West, our model estimates there will be 1.25 million workers cut from assistance in these states and who will have not found a job as of September 6. Moreover, the plight of these workers exposes the flaws of delivering federal unemployment aid through a system that depends on state discretion. As decisions in the flurry of lawsuits following the announcement of state cuts show, the governors in these states are having trouble following their own state laws when it comes to unemployment. Future federal unemployment reform should make participation in federal extended and enhanced benefits a requirement on par with other requirements outlined in the Social Security Act and Federal Unemployment Tax Act.
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Moreover, Texas, Florida, and Ohiothe three largest states in the groupare among those with elevated unemployment rates. Politics, not economics, drove the attack on unemployment insurance.
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Millions Lost Federal Unemployment Benefits On Labor Day Here’s What Happened
The massive cutoff of jobless benefits leaves Americans scrambling to make it through the pandemic.
Federal funding for extra unemployment benefits has ended, leaving families in the lurch.
On Labor Day, the expanded unemployment benefit programs rolled out for COVID-19 expired. Those temporary programs included the $300 weekly bonus checks as well as assistance for those who are normally ineligible for unemployment insurance, such as gig workers and the long-term unemployed. More than 11 million people were affected by the cutoff, and roughly;7.5 million people have now lost their benefits entirely. What’s worse is that many didn’t find out they were no longer eligible until after their coverage ended.;
Roughly two dozen states had already stopped the emergency federal programs early over the summer. Out-of-work residents in several states took legal action to try to get their benefits reinstated, arguing that without the aid they were unable to pay basic expenses, including rent and food. Governors fired back, claiming the extra unemployment insurance was discouraging people from taking available jobs.;
Yet;various studies have confirmed;that the thing holding back labor market recovery was not unemployment insurance, but the fact that many workers had safety concerns or family care responsibilities. And that continues to be the case in the COVID-19 era, especially with the uptick in;delta-variant;cases. Still, the White House does not plan to renew those benefits.;
Extending Benefits Did Not Worsen Unemployment During The Great Recession
The critical issue now is not whether to add the $300 benefit, but whether to keep unemployment benefits going at all. The experience of the Great Recessionwhen benefits could last as long as ninety-nine weeks in some states but far shorter in othersprovided researchers with fertile ground to test whether extensions of benefits could negatively impact job finding. A detailed economic study of metropolitan areas that crossed state lines found that employment did not grow more slowly among residents in counties offering more in unemployment benefits.30
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No Evidence: State Cuts In Jobless Aid Have Little Effect On Unemployment
New data muddies the waters at a time when the ramifications of governors decision to cut off emergency unemployment insurance before its expiration date remain unclear.
A protestor talks about the prospect of losing federal unemployment aid at a protest outside the Georgia Department of Labor on June 24 in Atlanta. | Jeff Amy/AP Photo
Only eight of the 26 states that cut off federal jobless benefits early saw a statistically significant drop in unemployment in July, government data released Friday shows, undermining a key Republican argument for ending the enhanced aid.
Nine states and the District of Columbia that did not end the benefits also saw statistically significant declines in unemployment, muddying the waters as economists and policymakers search for any indication that the decision by some governors to discontinue emergency unemployment insurance before its Sept. 6 expiration date might have had broader ramifications for the labor market.
“There’s no sign of the end of supplemental UI” affecting employment, said Mark Zandi, chief economist at Moody’s Analytics. “There’s just no evidence.”
The governors who made the move, mostly in Republican-controlled states, cited employer complaints about worker shortages, some of which they attributed to generous unemployment benefits.
“It would show up in the July data,” Zandi said. “But the increase in jobs in July is no different from the increase in jobs in June. In fact, it’s a little bit less.”
Did Cutting Funds Get Americans Back To Work
As legal battles over enhanced unemployment benefits continue in states including Ohio, Oklahoma and Texas, economists say its too early to tell whether the GOP argument that ending the payments early will get Americans back to work more quickly and help to fill labor shortages holds up.
The Labor Departments June jobs report found 850,000 new jobs were added largely before federal benefits were cut. That shows steady growth, contrary to claims that enhanced unemployment was keeping people home, said Andrew Stettner, a senior fellow at The Century Foundation, a progressive, non-partisan think tank.
The number of unemployment beneficiaries in states that cut the extra $300 a week in federal benefits, according to a June 27 analysis by The Wall Street Journal. However, Stettner noted, unemployment was already on the decline in many of these states anyway, and initial claims have also gone up in some states that discontinued the payments, such as Texas. Looking at the last two weeks of unemployment data, he said, I dont see clear evidence that taking the benefits away is getting people back to work.
A recent study conducted by Indeed found that unemployment benefits were among a number of factors keeping some people from going back to work, but they fell below COVID fears and child care as the most common reasons people gave for putting their job search on the backburner.
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No Hiring Boom In States That Cut Unemployment Benefits Early: Analysis
In an effort to speed jobless workers return to employment, 20 Republican-led states reduced unemployment benefits in mid-June. But according to a new analysis, those states did not see a boom in hiring, though they did see a change in the mix of workers getting new jobs.
The analysis, performed by the payroll processing firm Gusto for The Washington Post, found that employment growth has been roughly equal in states that ended the $300 per week supplemental federal unemployment payments in June and those that are continuing to pay them until Labor Day, when Congress scheduled them to expire.
Using April 2021 as a base, the total number of employed people rose by 11.6% in the states that cut unemployment benefits by the end of June, and by 11.2% in the states that did not.
However, in the benefit-cutting states, more workers over the age of 25 returned to work in June an increase that was offset by fewer teenagers getting jobs. By contrast, in the states maintaining benefits a higher percentage of workers aged 15-19 found jobs.
The findings suggest hiring is likely to remain difficult for some time, especially in the lower-paying hospitality sector, the Posts Heather Long and Andrew Van Dam write. The analysis also adds perspective to the teen hiring boom, revealing that more generous unemployment payments played a role in keeping more experienced workers on the sidelines, forcing employers to turn to younger workers.
Pandemic Unemployment Relief Ends Cutting Off 45000 Jobless In State
A total of 1.6 million Arizonans ultimately benefited from the Pandemic Unemployment Assistance program, which could be worth hundreds a week to workers who lost their jobs due to COVID-19.
WASHINGTON A federal pandemic relief program that provided extra financial aid to jobless workers ended Monday, hitting more than 45,000 unemployed Arizonans who had already seen the state pull away another source of federal aid in July.
The Pandemic Unemployment Assistance program ultimately helped a total of 1.6 million Arizonans over the course of almost two years, offering them $240 in unemployment benefits a week for up to 79 weeks, according to the Arizona Department of Economic Security.
Arizonans like Maria Plascensia de Rios, who lost her job of 14 years in food service at Phoenix Sky Harbor International Airport when the pandemic all but shut down air travel.
Even with the assistance, we did not have enough money, Plascensia de Rios said, speaking in Spanish.
The Phoenix resident was in the midst of treatment for cancer when the pandemic hit, and ended up using most of her PUA funds to pay her $700 monthly insurance bills, after losing her health insurance when she lost her job. She and her husband, who is retired, had to rely on food bank assistance for groceries.
We had to deprive ourselves of some things to make ends meet for other things, Plascensia de Rios said.
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But Cutting Unemployment Benefits May Not Be The Answer To Get People Back To Work
A recent JPMorgan note said theres little sign of any differential improvement in unemployment claims or in several spending and activity measures in these states as reported by Insiders Juliana Kaplan, referring to the states ending benefits.;
Heidi Shierholz, a senior economist and the director of policy at the Economic Policy Institute, told Insider that ending benefits early is a massive mistake and doesnt make any economic sense.;
We still have a weak labor market, Shierholz said. People are depending on those benefits, and theyre injecting a ton of federal cash dollars into those states.;;
The US is still down almost 6.8 million jobs from its pre-pandemic level after the US gained 850,000 jobs in June.;
Some governors of the states that have cut the benefits early have cited labor shortages and are aiming to get workers back into the labor force, but Shierholz said labor shortages are isolated.
Plus, job search is down in some of the states cutting benefits early according to Indeed data up to mid-June.;
If overly generous federal UI benefits were holding back job seekers, then we would expect search activity to increase, relative to the national trend, in states where those benefits have ended, Indeed wrote.;
How Rushing Back To Work Can Curtail Better Opportunity
The U.S. unemployment rate was the lowest it had been in 50 years prior to the coronavirus pandemic a number that belied the difficult economic reality for many low and middle-income Americans. In 2019, the median U.S. wage was $19.33 an hour, amounting to about $40,000 a year for a full-time, full-year worker. The wealth gap between Americas richest and poorer families more than doubled from 1989 to 2016, and as of 2018 the wage gap between Black and white Americans was not substantially different from what it had been in 1970, with the median Black household earning 61 percent of what white households earned. These inequities only worsened during the coronavirus pandemic, when Americans in low-wage jobs lost work at a higher rate, and Black, Latino and Asian workers continue to experience higher levels of joblessness than white workers.
At a moment when U.S. companies are reporting more than 9 million job openings that remain unfilled a record high labor advocates have said its a good time for Americans to ask for higher pay, more flexible work schedules and better benefits than their previous jobs offered. Some companies are offering hiring bonuses to lure workers in, and wages in sectors like leisure and hospitality are on the rise.
Businesses are putting their money where their mouths are, and in some sectors by a lot, said Michael Strain, director of economic policy studies at the American Enterprise Institute, a public policy think tank.
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What Happened When Some Gop
For most of the last year, expanded federal unemployment benefits helped keep Tammy Foster afloat while she was at home due to the coronavirus pandemic.
The 47-year-old, who lives in Joplin, Missouri, was forced to leave her job as a robotics machine operator for a dairy company after a doctor advised her that it was unsafe for her to work during the pandemic due to complicating medical conditions, like diabetes. While state and federal unemployment assistance did not equal what she had been making at her previous job, which paid $20 an hour, it helped cover rent, food, utilities during the months she was not working.
But when Missouri Gov. Mike Parson announced the state would stop providing additional federal unemployment benefits of $300 a week starting on June 12, Foster could no longer afford to stay home to stay safe. She and her husband both found lower-paying jobs at another food-manufacturing company in the area.
Foster had been working for four days when she started feeling ill. On July 6, she tested positive for COVID-19.
The moment I was forced to go back to work, my life was put at risk, said Foster, who had received the first dose of the Moderna vaccine before contracting the coronavirus.
Is Your State Cutting Unemployment Benefits Early
As of May 26, governors in the following 23 states have notified the U.S. Department of Labor that they plan to end extra jobless benefits early. More states are expected to follow.
Unemployed workers can still qualify for state benefits, but in some states, theyll face stricter requirements. For example, many states are now requiring workers who receive benefits to document their job search, a mandate that was mostly waived at the start of the pandemic.
As states withdraw from federal unemployment programs, they wont just be cutting the extra $300 a week. Depending on the state, the following benefits may also be ending:
- Pandemic Unemployment Assistance for freelancers, gig workers and independent contractors who usually wouldnt qualify for unemployment benefits.
- Pandemic Emergency Unemployment Compensation , which extends benefits for workers who have exhausted their regular benefits.
- A $100 supplement for some mixed earners, who have both W-2 and freelance income.
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Us States Ending Federal Unemployment Benefit Saw No Clear Job Gains
A “Now Hiring” sign advertising jobs at a hand car wash is seen along a street in Miami, Florida, U.S. May 8, 2020. REUTERS/Marco Bello/File Photo
WASHINGTON, July 20 – U.S. states putting an early end to federal unemployment benefits saw a larger jump in local labor supply in June than those planning to maintain the $300 weekly supplement until early September, new data show, though there was no clear sign ithad led to significantly more hiring.
State-level jobs data released earlier this month show that in the 26 states stopping benefits early an additional 174,000 people joined the labor force in June, by either taking jobs or beginning work searches, compared to 47,000 in the other states.
While that may indicate the withdrawal of benefits is having some of the impact intended by the governors who cut off the stipend, and causing more people to seek employment, the numbers are small in a national labor force of 161 million and come with a cautionary note: Job gains in both groups of states were roughly the same.
That could be the result of lagging data, since the survey that produces national and state job estimates ended its June round before the benefits actually ran out in most of the states planning to end them early.
Goldman Sachs economists also found little evidence yet that the cessation of benefits across a group of mostly Republican-led states was having much impact on labor markets that continue to puzzle Federal Reserve and other officials.
