More than 400,000 people are poised to lose unemployment benefits this weekend as eight states withdraw early from pandemic-era programs.
While $300 a week federal supplements to state benefits are not ending until September, eight states (Alabama, Idaho, Indiana, Nebraska, New Hampshire, North Dakota, West Virginia and Wyoming) join seventeen others who have already cut this benefit or plan to do so soon, affecting about four million recipients altogether.
Supporters of these cutoffs argue that the supplements are keeping workers from returning to the workforce, leading to complaints from employers that they cannot find workers.
The supplements no doubt give unemployed workers more choices about whether and when to go back to work, and under what conditions and with what pay. But these states are saying that’s too much power for working people to have; they need to be pressured to satisfy employers’ requirements for staff.
Even if one were to agree that filling job openings with less-than-willing workers were more important than allowing those who have been dislocated from work through the pandemic to return to work under their own conditions, there are good reasons why these efforts are misguided.
First, we are a long way from recovering from the pandemic recession, and states are shooting themselves in the foot by rejecting the federal aid that costs them nothing and yet boosts demand—and thus their economies—through the additional spending provided by the federal supplement.
Second, unhappy workers are less reliable and less likely to remain at their jobs than those who have willingly chosen to return to a job that fits their expectations and pay needs, thus undercutting the stability of a state’s economy in the short term, even if this reduces employers’ complaints about “not enough willing workers.”
Hiring has been picking up, but there are still millions of long-term unemployed workers. Allowing workers to return to jobs that they actually want, and that will offer them the pay and conditions that they find attractive, is the way to stabilize the labor market for the long run. Perhaps the suit against the cutoff in Indiana by unemployed workers there, if successful, will lead some of these states to reconsider. But all of them should reverse a poorly thought-out policy.
By Brent Kramer
Brent Kramer, PhD is a senior economist at the Fiscal Policy Institute.