Which States are Ending Federal Benefits?
by David Klemt
So far, 22 states across America are planning to end the weekly $300-per-week federal boost to unemployment.
Some reports suggest a few states will opt out of federal unemployment benefits as early as June 12.
Obviously, that’s significantly earlier than the September 6 expiration the American Rescue Plan mandates.
Two Sides
Clearly, the impact opting out of the federal unemployment program is largely academic at this point. We won’t know if the move will lead to a boost in hiring across the country or simply plunge struggling Americans further into peril.
One side, those who support the exit, believe the move will jumpstart the economy and hiring.
In their view, the $300-per-week benefit is a disincentive for claimants to seek employment. That, in turn, is what’s fueling the current labor shortage.
“Incentives matter,” says Montana Governor Greg Gianforte. “And the vast expansion of federal unemployment benefits is now doing more harm than good.”
The opt-out by 15 states will impact 1-1.5 million people.
Now, the other side believes opting out is cruel and will make it even more difficult for drowning Americans to get their heads above water. As they see it, most jobless people are using state and federal unemployment programs correctly.
“Let’s not take our eye off the ball,” says President Joe Biden. “Families who are just trying to put food on the table, keep a roof over their head, they aren’t the problem.”
Hospitality Industry Struggles
Obviously, the $300-per-week benefit is often cited by operators as one of the main reasons they can’t fill available positions.
Unfortunately, the reality of the situation isn’t that simple. Scapegoats may be “convenient” but they’re also dangerous—they distract from real issues.
The pandemic, mass unemployment, and current labor shortage isn’t solely the product of unemployment payment enhancements. A significant portion of hospitality workers aren’t working for other reasons. Many are leaving the industry entirely due to an array of issues.
These include workplace culture, inequity, lack of diversity and inclusion, and earning a livable wage, many among others.
Sure, it’s convenient to point to and vilify one contributor to the hiring struggles operators are facing. However, it’s clear that the industry has long-term problems with which it must reckon. Things can’t continue as they were pre-pandemic if the industry is to reset, recover and thrive in a post-pandemic world.
States Ending Federal Benefits
Montana Gov. Gianforte is the first to announce a state would opt out of the federal unemployment program, causing a domino effect.
So far, the list of states exiting the program are:
- Alabama (June 19)
- Alaska (June 12)
- Arizona (July 10)
- Arkansas (June 26)
- Georgia (June 26)
- Idaho (June 19)
- Indiana (June 19)
- Iowa (June 12)
- Mississippi (June 12)
- Missouri (June 12)
- Montana (June 27)
- New Hampshire (June 19)
- North Dakota (June 19)
- Ohio (June 26)
- Oklahoma (June 26)
- South Carolina (June 30)
- South Dakota (June 26)
- Tennessee (July 3)
- Texas (June 26)
- Utah (June 26)
- West Virginia (June 19)
- Wyoming (June 19)
It’s likely that more states will join the exodus.
Update: There are 22 states opting out of the federal unemployment program as of May 20, 2021.
Image: Pepi Stojanovski on Unsplash