Americans Leaving Unemployment Rolls More Quickly In States That Cut Off Benefits

The rate of unemployment-benefit recipients is falling faster rate in 21 states that have canceled federally enhanced and extended payments.

Federal pandemic aid bills raised unemployment payments by $300 a person each week for as long as 18 months. While the enhanced benefits will expire nationwide in early September, states could opt out before then.

“The number of workers paid benefits through regular state programs fell 13.8% by the week ended June 12 from mid-May — when many governors announced changes — in states saying that benefits would end in June, according to an analysis by Jefferies LLC economists,” The Wall Street Journal reported.  “That compares with a 10% decline in states ending benefits in July and a 5.7% decrease in states ending benefits in September. Workers on state programs would lose the $300 weekly federal enhancement but could continue receiving the state benefits.”

“You’re starting to see a response to these programs ending,” Aneta Markowska, Jefferies’ chief financial economist, told the Journal. In recent months “employers were having to compete with the government handing out money, and that makes it very hard to attract workers,” she said.

When the Biden administration announced the boost in benefits, many Republican governors agreed that they are not going to accept the $300 per week, saying it disincentivized workers from going back to work.

“The move to reject the extra money comes as new expert analyses show those who made $32,000 before COVID-19 hit are now making more in benefits staying at home and collecting than if they were to go back to work,” The Daily Mail noted in May. “The average U.S. salary for an individual in 2019 was $31,133. This means the average Americans could earn more money in coronavirus-era benefits instead of going back to work.”

Republican Gov. Henry McMaster of South Carolina decried the benefits.

“This is about as close to socialism that I’ve seen. We’ve got help-wanted signs up everywhere, we get calls and letters, and texts from all sorts of businesses all across the state looking for people to work. People won’t come to work because they’re getting as much money or more in some cases by staying home. It’s a counterproductive policy and I’m afraid what the Biden administration is doing is that they’re telling everybody that the virus is still rampant and still in great danger. Everybody has to stay home. That’s not true. Go get a job, get back to work. That’s how you build an economy and a family and everything else. The Biden proposals are totally underproductive, killing incentive, and it puts us right on the road to socialism. We’ve got to stand up and fight against this,” he said.

McMaster tweeted, “We are currently facing a labor shortage created in large part by the supplemental unemployment payments that the federal government provides. Since the Biden Admin and Congress appear to have no comprehension of the damage being done, the State of South Carolina must take action.”

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