President Joe Biden urged businesses to boost pay for workers to spur labor growth in a speech Monday, saying, “Americans want to work.”
By Dartunorro Clark
A growing number of Republican-led states are moving to end the extra $300 a week in Covid-19 pandemic-related unemployment benefits, arguing that the relief is discouraging U.S. workers from rejoining the labor force.
“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 Gov. Tate Reeves, a Republican, said in a statement Monday, adding that the benefit will end next month. “The purpose of unemployment benefits is to temporarily assist Mississippians who are unemployed through no fault of their own.”
Reeves directed the state to enforce all eligibility requirements to receive unemployment benefits, a process that was waived during the pandemic.
Arkansas, South Carolina and Montana have also announced that they would end the program within the next month.
A disappointing April employment report found that the economy gained only 266,000 jobs despite widespread forecasts that the number would top 1 million and that the report would show strong payroll growth after widespread vaccinations spurred Americans to return to activities like dining out and traveling.
The unemployment rate rose from 6 percent to 6.1 percent, which was also contrary to expectations but still down from a peak of 14.8 percent in April 2020, the highest level since the Great Depression. The U.S. Chamber of Commerce blamed the $300-a-week federal benefit for the sluggish report.
“The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market,” the conservative business lobbying group said Friday.
The White House also clarified a rule Monday that workers “may not turn down a job due to a general, non-specific concern about COVID-19 and continue to receive benefits,” and it announced the launch of the Coronavirus State and Local Fiscal Recovery Funds, established by the American Rescue Plan, to provide $350 billion in emergency funding for state, local, territorial and tribal governments.
“I know there’s been a lot of discussion since Friday’s report that people are being paid to stay home, rather than go to work,” Biden said. “We don’t see much evidence of that.
“We’re going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits,” he added.
Montana Gov. Greg Gianforte, a Republican, announced last week that the state will end the enhanced pandemic unemployment benefits next month and instead will offer a $1,200 bonus for unemployed workers who return to work.
“Montana is open for business again, but I hear from too many employers throughout our state who can’t find workers. Nearly every sector in our economy faces a labor shortage,” Gianforte said in a statement. “Incentives matter, and the vast expansion of federal unemployment benefits is now doing more harm than good. We need to incentivize Montanans to reenter the workforce.”
Arkansas Gov. Asa Hutchinson, a Republican, had a similar rationale. He said in a letter Friday that the federal unemployment measures “have accomplished their purposes.” Employment in the state as of March was at 4.4 percent — down from a high of 10 percent in April 2020, according to the Bureau of Labor Statistics.
“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.
South Carolina Gov. Henry McMaster, a Republican, announced last week that the state would end federal pandemic unemployment benefits for its residents next month, calling them a “dangerous federal entitlement.”
“South Carolina’s businesses have borne the brunt of the financial impact of the COVID-19 pandemic. Those businesses that have survived — both large and small, and including those in the hospitality, tourism, manufacturing, and healthcare sectors — now face an unprecedented labor shortage,” he said in a statement.
Indiana Gov. Eric Holcomb, a Republican, said he has asked the state to complete a “demographic analysis of unemployed Hoosiers over the past 16 months” before he decides whether to continue to participate.
The unemployment rate in Indiana is 3.9 percent, which Holcomb said is “near pre-pandemic levels.” He plans to issue an executive order this week to reinstate a requirement that those who claim unemployment benefits must “actively seek employment and be available for work,” which has been waived since the beginning of the pandemic.
Commerce Secretary Gina Raimondo said Sunday on CBS’ “Face the Nation” that nothing in the data suggests that enhanced unemployment checks are the reason people are out of work. But, she added, “this is regional, and it’s appropriate that governors in different regions would respond to what’s going on in their regional labor market.”
A Yale study, for instance, found that expanding unemployment did not dissuade people from seeking work.
Judy Conti, government affairs director of the National Employment Law Project, a research and advocacy group, said ending the benefit is “ill-informed and cruel.”
“I don’t know why these governors thought you could just flip a switch and suddenly every business was going to get up and running and every worker back to a job,” she said. “It’s still going to take a while to get people back to work.
“When you choke off money from the unemployed, you’re only going to slow your recovery,” she said.
Dartunorro Clark is a political reporter for NBC News