Republican governors in four states want to give people receiving unemployment benefits a bonus payment if they return to work.
Twenty-four states have said they’ll soon cancel the extra $300 per week and other benefits Congress created to fight the coronavirus pandemic. Those include Montana, Arizona, New Hampshire and Oklahoma, where governors are now adding bonuses.
Connecticut Gov. Ned Lamont (D) is adding a bonus without canceling federal benefits.
Earlier this month, Montana Gov. Greg Gianforte (R) first announced the state would drop federal benefits and offer “return to work bonuses” instead. People who were receiving benefits on May 4 who subsequently take and hold jobs for four weeks will receive one-time bonuses of $1,200, the equivalent of four weeks of $300 payments.
“Our return-to-work bonus and the return to pre-pandemic unemployment programs will help get more Montanans back to work,” Gianforte said.
Montana and the other states will pay for the bonuses with funds from the American Rescue Plan, the Democratic relief bill that Republicans pilloried for what they decried as its “blue state bailout.” The bill sent checks to most households, boosted unemployment benefits and provided about $350 billion for state and local governments to mitigate the ongoing economic impact of the pandemic.
Democrats did not expect states to cancel federal unemployment benefits and then use the relief money to pay return-to-work bonuses, but Senate Finance Committee Chair Ron Wyden (D-Ore.), who opposes canceling the federal benefits, said the bonuses nevertheless were a legitimate use of the funds.
“The American Rescue Plan’s state and local aid was designed to give states flexibility to meet their needs,” Wyden said in a statement to HuffPost.
“I have no problems with states using their state and local aid funding for back-to-work bonuses,” Wyden continued, “but those bonuses do not give red state governors a pass for cancelling jobless benefits and pulling the rug out from under millions of workers.”
More than 4 million workers will start losing the extra $300 next month in the states canceling benefits, which would otherwise remain in place until early September. Congressional Republicans mostly supported the benefits last year, while Donald Trump was president, but this month urged states to follow Montana’s lead and cancel the benefits.
The return-to-work bonuses in Montana and elsewhere closely resemble a 2020 proposal that Rep. Kevin Brady (R-Texas) pitched as an alternative to extra federal unemployment benefits last year.
The Republican campaign against unemployment benefits gained steam this year amid increasing complaints from businesses, especially restaurants, that workers won’t accept the wages they’re offering.
The bonuses vary by state. Arizona said it will use $300 million from the Rescue Plan to pay workers $2,000 if they work full time for 10 weeks making less than $25 per hour. Oklahoma’s offering $1,200 to anyone who claimed unemployment in May who gets a job and works at least six weeks. In New Hampshire, the bonus will be $1,000 for eight weeks of full-time work.
Many states have also used coronavirus relief money to shore up their unemployment trust funds, allowing them to avoid raising business taxes to restore the funds.
The bonus policies are a bad trade for people whose benefits are canceled and they don’t manage to find jobs, noted Andrew Stettner, an unemployment policy expert with The Century Foundation, a liberal think tank. But the policy will be beneficial for people who take jobs and don’t get paid in their first two weeks.
“Getting a bonus helps with that, plus expenses for child care, car repairs, uniforms, etc. needed for the job,” Stettner said in an email.