A new study has revealed that Republican-run states prematurely ending unemployment benefits last year did not have a significant impact on getting people back to work, as GOP lawmakers claimed it would — but it did result in financial hardship for millions of Americans.
In the summer of 2021, as many areas of the country were dealing with a supposed “worker shortage,” several Republican-led states’ governors decided to end extended federal unemployment benefits that included weekly increases to the typical insurance payment. The move affected some 4.1 million unemployed workersIn the 25 states that have ended the program. It was initiated to address the economic downturn triggered by the coronavirus epidemic.
Republican governors justifiably ended the benefits by Arguments that workers are not being given enough unemployment benefitsfrom returning to work. In reality, the so-called “worker shortages” were likely Because workers want to return jobs that offer better pay and benefitsMore employers were willing than ever to give.
The decision to end extended unemployment benefits prematurely seemed to have little or no effect on people returning to work. according to a paper published last week by the Federal Reserve Bank of San Francisco. In states that ended the unemployment benefits, hiring did pick up at a faster pace, on average — but the rate difference, when compared to states that didn’t end extended unemployment benefits, is incredibly miniscule.
The states that ended the benefit early only saw a hiring rate difference of 0.2 percent compared to other states, the study found — a difference that is “pretty much imperceptible,” said Robert Valletta, associate director of research at the Federal Reserve Bank of San Francisco and co-author of the paper.
Put another way, for every 1,000 people that were hired in states that kept the unemployment benefits in place, 1,002 people were hired in states that removed the benefits — hardly the significant change that GOP lawmakers promised would come from ending the benefits.
At the same time, Valletta added, a “meaningful fraction of people suffered real hardship as a result” of the cuts. Millions of Americans saw their unemployment insurance cut. the average worker lost around $6,000 in benefitsWorkers in states that preserved them intact are a better choice than workers in other countries.
Progressive lawmakers, including Sen. Bernie Sanders (I-Vermont), largely rejected conservatives’ claimsUnemployment insurance benefits were a problem for workers-seeking businesses. Even if that was the case, Sanders said, it wouldn’t justify ending the extended benefits.
If such benefits were “preventing employers from hiring low-wage workers there’s a simple solution,” Sanders said in the spring of 2021. “Raise your wages. Pay decent benefits.”