Nearly Half of the States Changing Unemployment Rules

Nearly Half of the States Changing Unemployment Rules

(UnitedVoice.com) – In the early months of the pandemic, tens of millions of Americans lost their jobs as governors locked down their economies and forced people to stay home. Former President Donald Trump argued that the federal government should temporarily offer a weekly $600 federal unemployment benefit to help those suffering at no fault of their own due to the pandemic. However, by fall 2020, Democrats were pressing to reinstate the expired benefit as unemployment continued to run high. In early February, Congress authorized a $300 weekly unemployment benefit.

Now that the states are fully reopening, the economy is beginning to recover. However, some businesses are struggling to meet customer demands as a labor shortage crisis emerges. Some argue that the weekly federal benefit hinders people’s willingness to go back to work because they either earn more on unemployment or enjoy the couch lifestyle they can currently afford. To solve the problem, nearly half of the states are rolling back unemployment benefits.

States Say It’s Time to Return to Work

According to the US Bureau of Labor Statistics latest report on May 7, the unemployment rate remained steady at 6.1% in April. Approximately 9.8 million people collected unemployment checks. Another 6.6 million didn’t participate in the labor workforce and weren’t counted for unemployment because either they weren’t actively looking for work or available for four weeks.

The average American receives approximately $387 in weekly state benefits. Add the additional $300, and it rises to $687 per week. That means the average person is collecting $17.17 per hour in unemployment benefits, assuming a 40-hour workweek.

As of May 17, 36 states said they already reinstated or would be reinstating work requirements in June as a condition of collecting unemployment benefits. Each state’s requirements are different but generally, it means one is required to actively be looking for work to keep their benefits. In addition, another 21 states say they will be dropping the $300 weekly federal benefit.

Federal Government Can’t Stop the States

As governors choose to stop paying the federal unemployment benefit, the Department of Labor (DOL) says there isn’t much they can do to stop them or go around the states. Legally, the states aren’t obligated to pay the benefit. The US unemployment system is a federal-state partnership. A state is entitled to drop out at any time for any reason.

Second, the federal government says it doesn’t have the means to pay it directly to claimants without setting up an extensive and time-intensive system themselves. Plus, they would be dependent on states to share their unemployment databases with the federal government.

In the end, governors are right to create incentives that put people back to work as the economy fully reopens. Currently, Congress has set the $300 weekly federal benefit to expire at the beginning of September.

Don Purdum, Independent Political Analyst

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