© Joe Raedle/Getty ImagesMIAMI, FLORIDA - MARCH 05: A 'we are hiring' sign in front of a store on March 05, 2021 in Miami, Florida. The restaurant is looking to hire more workers as the U.S. unemployment rate drops to 6.2 percent, as many restaurants and bars reopen. Officials credit the job growth to declining new COVID-19 cases and broadening vaccine immunization that has helped more businesses reopen with greater capacity. (Photo by Joe Raedle/Getty Images)
A growing number of Republican governors are moving to end enhanced federal unemployment benefits early in a controversial move they say will push people back to work and help employers fill open positions.
The GOP governors of Mississippi and Alabama on Monday were the latest to announce an early end to pandemic-related federal unemployment benefits, joining officials in Montana, South Carolina and Arkansas, all of whom announced last week that they would terminate the enhanced benefits before the end of June - months before the programs expire in September.
The moves come as Friday's dismal April jobs report showed that employers added just a quarter of the expected 1 million positions to their payrolls, and unemployment ticked up for the first time since the early months of the pandemic. Job openings surged to the highest level since the government started tracking the metric in 2000, the Labor Department announced Tuesday.
Enhanced federal unemployment benefits were authorized by Congress last year and extended in a $1.9 trillion stimulus package passed by Democrats in March. They include an additional $300 a week of unemployment compensation, benefits for gig workers and others who would not otherwise qualify for unemployment and an extension of benefits after the typical time limit on unemployment payments expires.
"It has become clear that the Pandemic Unemployment Assistance (PUA) and other like programs passed by the Congress may have been necessary in May of last year but are no longer so in May of this year," Mississippi Gov. Tate Reeves, a Republican, wrote in a Facebook post Monday announcing his decision to terminate the state's participation in the federal unemployment programs in mid-June. "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."
Other states, including some led by Democrats, are reinstating job search requirements that were lifted during the pandemic.
The argument from Republican governors is that enhanced benefits are disincentivizing people from returning to work. Montana's GOP Gov. Greg Gianforte derided the programs last week, tweeting, "No-work bonuses won't get Americans back to work."
But a February study by the JPMorgan Chase Institute found that the job-finding rate is "quite stable" even with expanded pandemic-related unemployment benefits. And while some economists say the enhanced benefits may be affecting labor supply, the broader picture is likely far more complicated: Some people have found employment in new industries during the pandemic while others are still reluctant to work because of the virus. Others - particularly women with children - have dropped out of the labor force completely, or are taking an extended break while juggling child care and facilitating virtual school.
President Joe Biden and his administration have rejected the idea that enhanced benefits are keeping unemployed workers sitting at home.
"Americans want to work," Biden said during remarks on the economy Monday. "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. No one should be allowed to game the system and we'll insist the law is followed, but let's not take our eye off the ball."
"The law is clear: If you're receiving unemployment benefits and you're offered a suitable job, you can't refuse that job and just keep getting the unemployment benefits," he said.
Treasury Secretary Janet Yellen said Friday that the administration has heard from employers who are struggling to find workers, but she doesn't think "the addition to unemployment compensation is really the factor that's making a difference."
Looking at states and sectors where unemployment benefits were high, one might expect job-finding rates to be low, but "in fact, what you see is the exact opposite," Yellen said.
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