Nearly half of all states are planning to end enhanced unemployment benefits, which were made available due to the pandemic. Critics of the benefits say they were a disincentive to finding new jobs.
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Timeline for Dropping Extra Jobless Aid Varies
At least 23 states are going to stop participating in the federal government's supplemental unemployment benefits program, which provides an extra $300 a week to the jobless. The rationale for dropping the payments is that they discourage workers from returning to the workforce. States are varying when they will opt out. Four states—Alaska, Iowa, Mississippi and Missouri—will drop the benefits on June 12, the earliest states may leave the program. Arizona Gov. Doug Ducey will end participation in the program on July 10, but Arizona will offer a $2,000 return-to-work bonus. The extra $300-a-week payments will continue until Sept. 6 in states that don't opt out.
(Forbes)
Some States Also Canceling Benefits for Gig Workers
Alaska, Arizona, Florida and Ohio are only dropping the $300 benefit, while the other states are also canceling federal benefits for gig workers and the long-term jobless. Cutting the $300 benefit affects approximately 4 million people. Only about half of them will continue receiving state benefits, which average less than $400 per week.
(HuffPost)
Hiring Challenges for Employers
Nationwide, many employers say they can't hire because extended, expanded federal and state unemployment insurance payments have caused potential job candidates to drop out of the labor force. Meanwhile, employers' unemployment insurance taxes are also going up. "It does seem like a double hit," said Joe Kane, executive vice president at Total Management Solutions Inc., which offers severance management services.
(SHRM Online)
President Defends Extra Payments
President Joe Biden has defended the extra jobless aid, saying, "Americans want to work." He has added, "I think the people claiming Americans won't work even if they find a good and fair opportunity underestimate the American people."
(CBS News)
Lawmakers Disagree over Cuts to Extra Jobless Aid
Rep. Kevin Brady, R-Texas, the top Republican on the tax-focused House Ways and Means Committee, said the White House is "in denial" about the economic effect of its policies. Senate Minority Leader Mitch McConnell, R-Ky., said the president's agenda has spawned a national worker shortage. But many Democratic lawmakers say the extra jobless payments are necessary because parents can't afford to return to work without affordable child care.
(The Washington Post)
Other Reasons for the Worker Shortage
The number of available jobs in the U.S. is at a record-breaking high while unemployment remains significantly elevated, leading employers in need of workers to wonder, where are all the job applicants? Experts have identified four possible answers: Some individuals may still be hesitant to return to the workforce due to the pandemic, pandemic-related early retirements may be more significant than previously thought, a historically large number of people who report being on temporary layoff or furlough may be holding out for their old jobs, and people classified as unemployed may not have the skills to qualify for open roles.
(SHRM Online)