Arkansas, Montana, & South Carolina Halting Federally-Enhanced Unemployment Benefits - Are You in Favor?
Should states end the federal enhancement of unemployment benefits sooner than September?
by Causes | 5.10.21
What’s the story?
- Republican governors in several states are moving to end the $300 per week federal enhancement of unemployment benefits sooner than the scheduled sunset of the program on September 6, 2021, while others are reinstating work search requirements.
- The moves come after the April employment report showed weaker than expected job growth and heightened concerns that would-be workers are declining job opportunities to stay on unemployment. That data prompted the Biden administration to announce Monday that it intends to reinstate work search requirements for unemployment benefits.
What are the governors doing?
- Gov. Asa Hutchinson (R) announced on May 7th that his state will no longer participate in the federal pandemic unemployment assistance program after June 26th.
- Arkansas’s unemployment rate in March 2021 was 4.4%, which is above its pre-pandemic unemployment rate of 3.8% in February 2020 but below the national average in April.
- Gov. Doug Ducey (R) issued an executive order on May 3rd that his state will reinstate the work search requirement for individuals receiving unemployment benefits starting with the week of May 23rd.
- Arizona’s unemployment rate in March 2021 was 6.7%, which is above its pre-pandemic unemployment rate of 4.9% and also above the national average in April.
- Gov. Ron DeSantis (R) told reporters on May 6th that he is planning to reinstate the requirement that individuals receiving unemployment search for work effective in June.
- Florida’s unemployment rate in March 2021 was 4.7%, which is higher than its pre-pandemic unemployment rate of 3.3% in February 2020 but below the national average in April.
- Gov. Greg Gianforte (R) announced on May 4th that his state will end its participation in the federal pandemic unemployment assistance program on June 26th.
- It will also implement a return-to-work bonus of $1,200 for unemployed individuals who rejoin the labor force after accepting a job and maintaining steady employment for at least one month, financed with federal funds provided to states in pandemic relief legislation.
- Montana’s unemployment rate in March 2021 was 3.8%, just above its pre-pandemic unemployment rate of 3.7% in February 2020 and well below the national average in April.
- Gov. Henry McMaster (R) released a statement on May 6th that his state will end its participation in the federal pandemic unemployment assistance program on June 30th.
- South Carolina’s unemployment rate in March 2021 was 5.1%, which is well above its pre-pandemic unemployment rate of 2.8% in February 2020 but below the national average in April.
- Gov. Phil Scott (R) on April 27th announced the reinstatement of the work search requirement for unemployment benefits beginning the week of May 9th.
- Vermont’s unemployment rate in March 2021 was 2.9%, which is above its pre-pandemic unemployment rate of 2.5% in February 2020 but well below the national average in April 2021.
What’s the debate over the enhanced federal unemployment benefit?
- With the enactment of the bipartisan CARES Act in March 2020, the federal government created programs to provide out-of-work Americans with enhanced unemployment benefits. Due to pandemic-related public health restrictions, the bill also waived work search requirements that states ordinarily mandate for recipients of unemployment benefits.
- The federal benefit is in addition to state unemployment benefits, which are calibrated based on an unemployed individual’s prior earnings and vary between states. It totaled $600 per week through the end of July 2020, and after a lapse during the second half of 2020 it was extended at a reduced level of $300 per week through mid-March 2021 and then September 6, 2021.
- Throughout its implementation, the combination of federal enhancement plus state unemployment benefits has raised total weekly jobless benefits for some unemployed Americans to a level that exceeds their prior earnings. That prompted concern among GOP lawmakers in Congress, who offered an unsuccessful amendment to the CARES Act in March 2020 that would’ve capped combined federal and state unemployment benefits at 100% of prior earnings.
- After the lackluster April jobs report, President Joe Biden on Friday said the federal enhancement of unemployment benefits didn’t have a “measurable” effect in deterring recipients from returning to work. On Monday, the White House announced that this week the Labor Dept. will work with states to reinstate work search requirements and clarify that workers receiving unemployment benefits can’t turn down job offers due to general, non-specific COVID concerns. Biden again pushed back against assertions the unemployment benefits disincentivize work and remarked that the changes are to prevent people from trying to “game the system”:
“The line has been because of the generous unemployment benefits, that it’s a major factor in labor shortages... Americans want to work. I think the people claiming Americans won’t work even if they find a good and fair opportunity underestimate the American people… We’re going to make it clear anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits.”
- The April jobs report prompted the U.S. Chamber of Commerce to call for the end of the $300 per week federal enhancement of unemployment benefits, with Executive Vice President and Chief Policy Officer Neil Bradley saying:
“The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market… 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.”
— Eric Revell
(Photo Credit: iStock.com / courtneyk)
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