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Faster Economic Recovery for States that Ended Unemployment Benefits Early

Faster Economic Recovery for States that Ended Unemployment Benefits Early

States that chose to opt out of the federal government’s pandemic jobless programs are reporting faster economic recoveries than states that chose to maintain those benefits, reports The Wall Street Journal. 

Congress last year passed a series of bills designed to help Americans and small businesses avoid bankruptcy during the pandemic. This includes legislation that expanded eligibility requirements for unemployment benefits and increased the dollar amount of those benefits.

But as pandemic restrictions eased, it became clear that many Americans were taking advantage of the enhanced benefits to remain out of work. Others say they can’t rejoin the workforce due the inability to find childcare. 

Polls suggest 65% of Democrats and 19% of Republicans think unemployment benefits should continue past September (this is not surprisingly considering Democrats’ affinity for federal handouts). 

To date, roughly half of states have opted out of one or more federal jobless programs earlier than the expiration date of September 6th, 2021. With the exception of Louisiana, all states that chose to opt out have Republican governors. Efforts to end federal jobless programs in GOP-led Indiana and Maryland have been blocked by legal arguments.

According to data from the US Labor Department, unemployment rates are lower in states that opted out early than in states that did not. Unemployment claims fell to 360,000 last week (the lowest since the start of the pandemic) after exceeding 900,000 in January.

There were roughly 9 million job openings in the US as of May 1st (a new high since 2000). The job openings rate for leisure and hospitality is particularly high as businesses in that sector struggle to hire workers at pay rates lower than what the federal government offered during the pandemic through enhanced unemployment benefits.

“Montana is open for business again, but I hear from too many employers throughout our state who can’t find workers,” laments Governor Greg Gianforte, a Republican who argued that federal unemployment programs were “doing more harm than good.”

The so-called “hiring crisis” has given workers a golden opportunity to demand higher wages and increased benefits, though businesses are likely to pass those extra costs to consumers in the form of higher prices. This trend has contributed to inflation, which hit a YOY increase of 5.4% last month (click here to read more).


Half of U. S. States Ended Federal Covid-Related Jobless Benefits Early. Here Is How They Compare With the Other Half. 

What happened when some GOP-led states cut the $300 unemployment benefit 

US unemployment claims fall to 360,000, a new pandemic low 

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