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As the number of jobless benefits applications continue to trickle down in the United States, many have turned to looking at how Covid-era benefits are affecting the workforce.
During the pandemic, the federal government pursued a three-pronged approach to help the workforce survive: it expanded the pool of unemployed workers eligible for benefits, extended the length of time unemployed workers can receive payments, and enhanced weekly payments; the most recent “enhancement” was by $300 a person. Residents in all 50 states were eligible to receive enhanced unemployment benefits during the pandemic. Many of these programs are scheduled to expire September 6th, however states have the option to opt out before that deadline. So far, half of all U.S. states have opted out early; in some states who decided to opt out early, they have been challenged in court. Additionally, some states who decided to opt out early have, instead, established state programs aimed at increasing incentives for returning back to work in place of the federal programs. While those who opted out early did so on the basis that enhanced and extended benefits contribute to the ongoing labor shortage, those states who are continuing said programs cite workers’ health concerns and lack of child care as major reasons why the labor shortage is worsening.
This is a look at how states who have opted out early are standing in comparison to those who have kept the programs in place.
- Party Affiliation
- Out of the 26 states who opted out early, all are led by Republican governors except Louisiana.
- Timeline of Ending Payments
- Over 20 states announced they would discontinue the payments in June
- 4 states announced they would discontinue the payments in July
- The remaining 24 states will continue their programs until the deadline in September
- Unemployment Rates
- June unemployment rates tended to be lower in states that have opted out early.
- The national unemployment rate rose to 5.9% in June from 5.8% the previous month. This has been attributed, in part, to the increasing size of the labor pool as the economy continues to reopen.
- Cost of Each Program Based on Groups
- Federal Pandemic Unemployment Compensation
- This program enhances normal state benefits by a weekly sum of $300, which was decided upon during the pandemic.
- For the 26 states who opted out early, this represents $125 billion.
- For the 24 states who are continuing programs until September, this represents $275 billion.
- Pandemic Unemployment Assistance
- This program makes benefits available to individuals who would not normally be eligible, including self-employed and other workers.
- For the 26 states who opted out early, this represents $29 billion.
- For the 24 states who are continuing programs until September, this represents $89 billion.
- Pandemic Emergency Unemployment Compensation
- This program provides extra payments to those individuals who have exhausted their allotted funds from other programs.
- For the 26 states who opted out early, this represents $22 billion.
- For the 24 states who are continuing programs until September, this represents $48 billion.
Concurrently to these changing trends, the job opening rate has been continually rising. As of May, job openings rose to 9.2 million, a record that hasn’t been reached since 2000. The job openings rate in May stood at 6%, which was up from 4.7% recorded in January. The leisure and hospitality industry has seen a particularly high rate of 9% at this time.
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