Ten states will exit the enhanced unemployment benefits at the end of the week — impacting roughly 2.5 million workers. Arkansas, Florida, Georgia, Montana, Ohio, Oklahoma, South Carolina, South Dakota, Texas and Utah will all be ending the $300 federal supplemental benefits in their states, joining 12 other states that previously opted out of the benefits in the past two weeks, as the U.S. emerges from the coronavirus pandemic.
In total, 26 states are ending the enhanced federal benefits before they’re set to expire in September. All of the states but one are run by Republican governors who began announcing the termination of benefits last month, claiming the increased unemployment benefits were causing workforce shortages by discouraging people from returning to work, even as pandemic-related restrictions eased.
In all but two of the states exiting the enhanced benefits June 26, Florida and Ohio, federal unemployment programs for gig and self-employed workers, as well as those unemployed long-term, will also end. Because of that, more than 1.1 million unemployed workers will see all unemployment benefits end, including more than 700,000 people in Texas alone.
Although Georgia does not report the number of people in its Pandemic Emergency Unemployment Compensation program for long-term unemployed workers to the Labor Department, The Century Foundation estimates more than 117,000 Georgians will see benefits disappear altogether.
Florida is the only other state that does not report the number of people receiving benefits from the Pandemic Emergency Unemployment Compensation program to the Labor Department, but it will not end all federal programs until they expire in September. The Century Foundation estimates 417,000 Floridians will be impacted as the state ends the $300 supplemental benefits early.
There has been fierce debate over how the enhanced benefits have affected the labor market. Republican lawmakers and some business groups claim they’re serving as a disincentive to work — but economists and federal officials have noted other influences are at play in keeping people from returning to jobs.
Testifying this week on Capitol Hill, Federal Reserve Chairman Jerome Powell said a number of factors affected the labor supply, including ongoing health concerns due to the pandemic, and parents still dealing with child care challenges. He also noted the shift as people move to new job opportunities rather than returning to pre-pandemic ones.
Powell also said the enhanced benefits may be a factor, suggesting it was allowing people to continue their job searches longer. He pointed out the impact of enhanced benefits on the labor force may become clearer in the near future as they expire. States not ending the enhanced benefits early will see them expire September 6.
At the same time, as some states opt-out of enhanced benefits early, job search activity is up in some but down in others according to a recent analysis by Indeed Hiring Lab. In the 12 states that ended the increased benefits June 12 and June 19, the job search activity is below the national trend.
Meanwhile, 411,000 people filed for unemployment claims across the country last week for the first time, down only 7,000 from the week before. More than 104,000 filed for the federal program for gig and self-employed workers. While the declines in initial claims have leveled off, continuing claims remained below 400,000, the lowest they’ve been since the pandemic began last year.