Two more states plan to cancel federal unemployment benefits

WHAT YOU NEED TO KNOW:

• Due to concerns of a labor shortage, a number of states plan to cancel some of the federal unemployment benefits.
• Republican governors said they want to get their states’ workers back in the workplace.
• According to a recent study, 42 percent of people getting unemployment benefits earn more than they did before the pandemic.

Many Republican governors are planning to cancel the federal unemployment benefits to get workers back on the job. Some business owners complained they can’t hire enough workers who want to come back to work.

Last week, Montana and South Carolina both announced the cancellation of unemployment benefits. The latest states to announce similar moves were Mississippi and Arkansas. The governor of Indiana is also considering to opt out of the programs.

“The purpose of unemployment benefits is to temporarily assist Mississippians who are unemployed through no fault of their own,” Mississippi Gov. Tate Reeves said Monday. He noted that the benefit will end on June 12.

“It has become clear to me that we cannot have a full economic recovery until we get the thousands of available jobs in our state filled…Mississippi is open for business,” he added.

On Friday, Arkansas Gov. Asa Hutchinson also announced his state would cancel unemployment programs.

“Continuing these programs until the planned expiration date of September 4, 2021, is not necessary and actually interferes with the ability of employers to fill over 40,000 job vacancies in Arkansas,” he said in a letter.

Indiana Gov. Eric Holcomb is asking the state Department of Workforce Development to complete a demographic analysis of unemployed residents before making a decision.

“We must concentrate on building the right pathways to match people with the skill sets employers need and to attract more people to join our workforce,” Holcomb said in a statement on Friday.

But critics say the move comes too soon, when the numbers of unemployed workers remains high.

“The 100% federally-paid unemployment benefits have boosted spending and contributed to the strong economic recovery,” Andrew Stettner, an unemployment insurance expert and senior fellow at the Century Foundation, told Yahoo Money. “It’s shortsighted for the state to sacrifice that economic stimulus based on the anecdotal labor shortages concerns of a few employers, especially given the limited evidence of work disincentives from unemployment pay during the pandemic.”

At the end of June, jobless workers in Arkansas, Montana, and South Carolina will lose the extra $300 in weekly unemployment benefits but maintain their regular benefits. Contractors, gig workers, and others will also lose access to the Pandemic Unemployment Assistance (PUA) program, meaning those workers won’t get any benefits.

The move to cancel benefits gained momentum after last week’s dismal job report.

Montana is the only state of the three cancel benefits to also offer a one-time return-to-work payment of $1,200, using money from the American Rescue Plan to fund the program. Only those who complete four weeks of work would receive the payment.

“Incentives matter,” Montana Gov. Greg Gianforte said. “Our return-to-work bonus and the return to pre-pandemic unemployment programs will help get more Montanans back to work.”

Source: AOL