Arkansas becomes third state where court blocks cuts to unemployment aid
Arkansas is now the third state where a judge ruled that pandemic unemployment benefits must be restarted after they had been halted by the governor. The ruling could impact about 69,000 jobless workers in the state who lost their additional jobless benefits on June 26.
The ruling follows similar decisions in Indiana and Maryland, whose governors had cut the pandemic aid on June 19 and July 4, respectively. Since early May, the governors of 26 states have announced they would leave the pandemic aid programs, which are federally funded through September 4. That's sparked lawsuits in several other states, including Florida, Ohio and Texas.
In Arkansas, Judge Herbert Wright ruled that the unemployment benefits must be restored while a lawsuit winds its way through court, citing the potential harm that could be experienced by workers from the loss of the financial support. Wright wrote that the lawsuit — filed on behalf of five Arkansas workers who have struggled to pay for essentials such as food and rent since the benefits ended — has "a reasonable likelihood of success on the merits."
"From Little Rock to Indianapolis to Baltimore, judges are coming to the same conclusion — that governors are abdicating from their duty to protect the unemployed from hardship," said Andrew Stettner, an expert on unemployment at the left-leaning Century Foundation.
As the economy regains its footing, unemployment aid has become a lightning rod among some lawmakers and business owners. In the 26 states that are ending enhanced federal unemployment before it is due to expire in early September, governors blamed the benefits for keeping people from seeking work. All but one of the governors are Republicans.
In May, Hutchinson ordered that the state cease payment of the pandemic benefits, which are federally funded, saying that the aid "actually interferes" with employers' efforts to rehire workers. Like Hutchinson, the governors of the other states that ended the programs cited similar logic, blaming the extra $300 in weekly jobless aid for keeping workers on the sidelines.
The workers who sued in Arkansas range from a 24-year-old sandblaster in a gun shop to a 63-year-old music teacher. Some of them have lost their homes and can't afford to buy food or pay for utilities and other bills, the lawsuit states.
"Driven by anecdotes"
New economic research has found that states that cut the benefits aren't getting the boost their governors may have hoped for. In fact, job growth in 12 states that ended aid on or before June 19 has been on par with states that maintained the benefits. But hardship is on the rise among residents in states that opted to end the programs before the expiration date of September 4.
"The decision to cut off benefits seems to have been driven more by anecdotes about hiring experiences by employers than a true concern with the welfare of the unemployed," Stettner added.
The shortages of workers in restaurants and the retail sector are due to a number of factors beyond jobless aid, economists say. For instance, childcare demands and continuing concerns about COVID-19, especially in regions with low vaccination rates, are holding back some people from rejoining the labor force.
Arkansas Judge Wright wrote that the lawsuit raises questions about whether the governor has the right to terminate the programs.
"The Court has serious doubts that the Governor and the Director of Workforce Services were acting within the scope of their duties, as these decisions would normally be the subject of legislation from the General Assembly," Wright noted.