Federal Unemployment Benefits Ending Early In Some States
(CBS Baltimore) -- Unemployed people in half the country are seeing a big drop in weekly unemployment benefits, if they haven't already. The federal government has been topping off weekly unemployment checks since the American Rescue Plan passed in mid-March. The extra $300 more than doubles the state benefit in some parts of the country. But in recent weeks, 25 states have announced they intend to end those supplemental benefits early. And for many, the time has come.
The $1.9 trillion stimulus package set Labor Day as the official end date. But Alaska, Iowa, Mississippi, and Missouri ended their Federal unemployment benefits on June 12. Alabama, Idaho, Indiana, and Nebraska are among the states that discontinued the extra $300 on June 19. Arkansas, Florida and Texas are some of the states that stopped benefits on June 26. Maryland and Tennessee end theirs on July 3. White House press secretary Jen Psaki said recently that governors have "every right" to stop benefits early. President Biden, for his part, recently indicated that he does not plan to extend them beyond early September.
The federal unemployment bonus has helped those Americans still awaiting the recovery to pay bills and put food on the table. But some argue that those generous benefits are keeping people from rejoining the workforce. (For reference, that $300 per week amounts to an additional $7.50 per hour for someone who might otherwise work 40 hours.) Upwards of 4 million people (25 percent of those currently unemployed) are being affected.
Many considerations factor into one's ability to work. The amount received for not working is certainly one of them. Childcare is another. Many schools stayed remote for the entire school year, depriving lots of parents of the built-in childcare. That lack of childcare could continue now that schools are on summer break. A growing gap between skills in the labor force and the requirements of available jobs makes hiring more difficult. A difference between what employers are offering in terms of compensation and what workers will accept is also a consideration. Then there's the general friction that inevitably arises when an entire economy slams its foot on the gas pedal.
COVID remains a very real threat, particularly for those who work around people. The full vaccination rate for the entire country is just over 47 percent. But those rates vary widely from state to state. Mississippi has fully vaccinated 29.8 percent of its population, while Vermont has vaccinated 65.7 percent of its population. Many of the states that have discontinued the Federal unemployment insurance bonus exceed the national average. Wyoming, Arkansas, Alabama, and Mississippi, the four worst states in the country, are all below 35 percent. With the pandemic far from contained in some states, people in these places may be hesitant to resume normal activities.
Regardless of the reason, many states will continue trying to push people back into the job market. Louisiana is the latest state to announce an end to the federal unemployment benefit bonus, with their benefits wrapping up on July 31. A total of 25 of the 27 states led by Republican governors have or will cut off federal benefits before Labor Day.
Most of these states are also withdrawing from Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC). PUA supports freelance and self-employed workers, who generally don't receive aid from the state. PEUC helps the long-term unemployed, who have burned through their state benefits.
The end of federal unemployment benefits will affect local economies. States whose unemployment checks are $300 lighter will not enjoy the spending of that federal money in their businesses; those relying on unemployment insurance tend to quickly spend the money on necessities like food and rent. Local businesses also won't have that spent money to stock shelves and hire new employees. The U.S. Congress Joint Economic Committee estimates that local economies will lose around $13 billion.
"The enhanced Unemployment Insurance provided through the CARES Act ensured that tens of millions of Americans were still able to put food on the table, prescriptions in the medicine cabinet, and keep the lights on during one of the worst economic recessions in our nation's history. Many of those Americans still remain deeply uncertain about their economic futures as we still remain more than 8 million jobs short of where we were pre-pandemic," said committee chairman Don Beyer. "If states proceed with their plans to end these critical programs, they will be ripping the rug out from under millions of Americans and further hindering our economic recovery."
Employment remains well below pre-pandemic levels. While the unemployment rate fell to 5.8 percent in May, about 7.6 million fewer people were employed at that point as compared to early 2020. And most of them were in low-wage jobs lost during the pandemic that have not returned. Approximately 364,000 people initially applied for unemployment insurance last week, the lowest number since the start of the pandemic. (A typical pre-pandemic week saw about 250,000 new unemployment applications.) Another 115,000 applied for PUA. As of the week ending June 12, 14.7 million workers were receiving some form of unemployment aid.
Here is a list of states and when their $300 federal unemployment benefit will end:
Alabama - June 19
Alaska - June 12
Arizona - July 10
Arkansas - June 26
California - September 6
Colorado - September 6
Connecticut - September 6
Delaware - September 6
Florida - June 26
Georgia - June 26
Hawaii - September 6
Idaho - June 19
Illinois - September 6
Indiana - June 19
Iowa - June 12
Kansas - September 6
Kentucky - September 6
Louisiana - July 31
Maine - September 6
Maryland - July 3
Massachusetts - September 6
Michigan - September 6
Minnesota - September 6
Mississippi - June 12
Missouri - June 12
Montana - June 27
Nebraska - June 19
Nevada - September 6
New Hampshire - June 19
New Jersey - September 6
New Mexico - September 6
New York - September 6
North Carolina - September 6
North Dakota - June 19
Ohio - June 26
Oklahoma - June 27
Oregon - September 6
Pennsylvania - September 6
Rhode Island - September 6
South Carolina - June 26
South Dakota - June 26
Tennessee - July 3
Texas - June 26
Utah - June 26
Vermont - September 6
Virginia - September 6
Washington - September 6
West Virginia - June 19
Wisconsin - September 6
Wyoming - June 19
Originally published on Monday, June 7, 2021 at 6:20 p.m. ET.
