On June 12, unemployed people in Alaska, Iowa, Missouri and Mississippi will have their pandemic unemployment benefits shut down three months earlier, the first of 25 Republican-led states to cut federal benefits that would normally expire. in September.
It is the start of a bold, mass, social and economic experiment to see whether the early deactivation of federal unemployment benefits for half of the country will make people in those states return to work.
The CARES (Coronavirus Aid, Relief, and Economic Security) law of March 2020 provided for a weekly federal supplement of $ 300 on top of the state’s regular unemployment benefits. The US bailout extended them until Labor Day.
The Century Foundation, a progressive think tank, estimates that 4 million people will lose profits, for a total of $ 22 billion.
Economists and researchers say the move will only get a small number of people back into the workforce and outweigh the precariousness of workers who depend on benefits for basic needs and stay at home for basic needs. other reasons, such as virus problems and caring for elderly parents. or children.
But the other 21 GOP-led states are moving forward, turning off their federal benefits until July 19 to accommodate complaints from companies that employers can’t find enough workers to serve tables, make beds. and take care of factory equipment. They say the government is paying people more not to work than they could afford to pay them to work, and that they cannot compete.
“While these federal programs have provided significant temporary relief, vaccines and jobs are now plentiful. And we have a critical issue where businesses in our state are trying to hire more people, but many are facing severe labor shortages, ”Maryland Gov. Larry Hogan said in a June 1 statement as his state became the 25th to end federal benefits. “We can’t wait to get more Marylanders back to work,” he said.
Combined federal and state unemployment benefits average about $ 650 per week, or about $ 16 per hour for full-time work. This is more than what some entry level jobs offer. Some of the open jobs are also only part-time, which means the weekly salary is even lower than what the government offers.
The underlying health issues are one of the reasons some workers give for staying home.
Jordan Motteler, 30, from Oklahoma, was a shuttle driver and her husband worked at Lowe’s home improvement store. Both were fired in March 2020. Because she and her daughter are immunocompromised and the vaccines are not approved by the Food and Drug Administration, she says her doctor said she could not get the vaccine yet. . Her condition would put her at risk for heart or respiratory failure if she returned to work and caught Covid.
“I love my job,” Motteler said. “I hate that I can’t work.”
Without the federal allowance, she is only entitled to $ 189 per week in state unemployment compensation, she said. Paying for drugs, bills and groceries, including her daughter’s formula – which has doubled in price during the pandemic – will only get more difficult.
“How do you think $ 189 is more than enough to cover groceries and bills for a family of five?” And now they want to cut it? Mottler said. “I just don’t understand how the numbers continue to rise during the Covid pandemic, but now we basically have to fend for ourselves.”
Oklahoma will cut federal benefits for her family on June 26.
Other workers say finding and paying for child care is part of what keeps them from re-entering the workforce. Even with the benefits cut off, the math just doesn’t add up.
Sherry Pratt, of New Hampshire, is an unemployed, 47-year-old print marketing sales representative.
She and her husband live on her warehouse worker salary. But her daughter has special needs and the cost of specialized after-school help, if she could even find one, would absorb most of her potential income. His state will end extended federal benefits on June 19.
“I don’t think there is a shortage of manpower, I think there is a shortage of manpower with a living wage,” Pratt said.
According to an article from the Federal Reserve Bank of San Francisco published this month, if there were only 28 unemployed, six workers a month would find a job. Take away the benefits and seven workers would.
“What happens to the other 21 workers? They need something to get by, pay their bills, put gas in their cars, so they can look for a job, ”said Andrew Stettner, senior researcher at the Century Foundation. “These governors basically cut off their noses to upset their faces.”
The demand for labor is skyrocketing, but workers are lagging behind. There are 9.3 million unemployed and at least as many open jobs. As a sign of worker confidence, Americans quit their jobs at record levels in April, reaching 4 million.
Some labor market watchers say employees go back to jobs they realize they no longer want, and then leave for better ones. Others argue that extended benefits make it easier for workers to take their time, too easily.
Workers say essential lifeline is cut.
“I don’t feel like I have much control. And now it’s like the bottom is falling even more, ”said Pratt.