More GOP-Run States Announce Cuts To Federal Unemployment Benefits

They're yanking the extra $300 and other benefits Congress put in place during the pandemic.

Unemployed workers in several states will lose access to federal jobless benefits, which Republican governors blame for worker shortages.

“Despite our economy’s strong comeback, many business owners and employers across our state are still struggling, not because of COVID-19, but because they can’t find people to fill the jobs,” Missouri Gov. Mike Parson (R) said Tuesday.

Alabama, Arkansas, Iowa, Mississippi, Missouri, Montana, North Dakota and South Carolina have announced that next month they’ll drop the extra $300 provided by the federal government, as well as benefits for gig workers and the long-term jobless. Congress intended for the benefits to remain until early September.

People who were laid off from regular payroll jobs will continue to receive state-funded unemployment benefits, but independent contractors and Uber drivers, who are normally ineligible for benefits, will be left with nothing.

GOP lawmakers and business owners have complained of a worker shortage in recent weeks despite high unemployment and middling wage growth, which economists say are clues that there are still plenty of workers available.

Many employers also complained of labor shortages in 2019, when no federal benefits were in place. The worker shortage complaint is essentially a complaint that workers won’t accept the wages employers are offering.

But Republicans seized on last week’s disappointing jobs report, which said employers added far fewer jobs in April than economists had predicted, as evidence that federal benefits are holding back workers. The extra $300 per week and benefits for gig workers were unprecedented before last year.

Missouri Gov. Mike Parson (R) at a news conference in 2019. This week, he blamed federal unemployment benefits for a worker shortage in his state.
Missouri Gov. Mike Parson (R) at a news conference in 2019. This week, he blamed federal unemployment benefits for a worker shortage in his state.
Jacob Moscovitch via Getty Images

Congressional Democrats oppose GOP efforts to end enhanced unemployment benefits prematurely. They cite various factors for a sluggish labor market in April, including the lack of readily available child care for millions of Americans.

“There are many, many reasons why there is a shortage of workers,” Senate Majority Leader Chuck Schumer (D-N.Y.) said Tuesday. “Some of it is because [former President Donald] Trump cut off immigration so severely. We have half the number of immigrants that came in. Some of it is because people need child care. Some of it is because people don’t want to go back until COVID is beaten. I think many more people are helped ― all the people who can’t get jobs ― by this $300 extra and the overwhelming support in our caucus is to keep it.”

Sen. Raphael Warnock (D-Ga.) also argued against an early end to federal jobless assistance, a move GOP officials in his state are considering.

“We are still in the midst of an economic crisis,” Warnock said. “We need to provide people the support they need even as we transition, hopefully, out of the pandemic into an economy that allows people to thrive. But we’re not there yet.”

While Democratic lawmakers are pushing back on the notion of a nationwide “labor shortage” caused by federal jobless aid, President Joe Biden is stressing that workers shouldn’t stay on unemployment if they’ve received a good job offer. The message to jobless Americans, while already law, marked a rhetorical shift for the White House following a month of disappointing jobs growth.

Still, Biden reiterated that he didn’t see much evidence of added unemployment benefits keeping Americans home.

“We still have 8 million fewer jobs than we did when the pandemic started, and for many of those folks, unemployment benefits are a lifeline,” Biden said at the White House on Monday. “No one should be allowed to game the system and we will insist the law is followed, but let’s not take our eye off the ball.”

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