New Stats Prove Republican-Led States That Ended Enhanced Federal Unemployment Benefits Were Right
Pandemic-era unemployment is now a thing of the past, and a labor shortage is now the greatest threat the U.S. economy faces.
In April, even as the economy added 559,000 jobs, job openings soared to a record high 9.3 million vacancies.
Among the culprits for the shortage have been enhanced federal unemployment benefits, which give a $300 boost in addition to other state level unemployment benefits. Since traditionally low paying sectors such as food service and leisure and hospitality have yet to recover fully, there’s a strong case to be made that the extra benefits are deterring people from looking for work (and who can blame them?). Due to the enhanced benefits, many are in the position where they can either earn more by not working, or earn close enough to what they would working that work isn’t worth the effort.
Twenty-six Republican-led states have decided to do away with the weekly $300 boost. The benefits are set to expire nationally on their own on September 6th, but these states ended them earlier this month, impacting 3.8 million people.
As expected, those states that did so are already seeing employment pick up faster than elsewhere. As Brad Polumbo, a writer with a questionably spelled surname explains:
Thanks to recently released Labor Department data on unemployment claims, we can now, quite predictably, see the welfare rolls expanding in the states where the unemployment bonus remains in place. Yet the number of people on welfare is rapidly shrinking in the states where the supplement is set to expire or already has expired.
“The 26 states that have announced their plan to end participation in the $300 weekly unemployment bonus have seen a 12.7 percent decline on average in initial claims over the past week,” the fiscally-conservative Foundation for Government Accountability reports. “Meanwhile, states that have indicated they will continue participating in the unemployment bonus programs have seen an increase in initial claims by an average of 1.6 percent during this same period. The 12 states that have officially opted out of the $300 weekly bonus thus far have seen consistent declines each week since ending participation in the bonus.”
In other words, people are leaving the welfare rolls and returning to work in the states where the government is getting out of the way. They are not doing so as much in the states where expanded welfare continues to create dysfunctional incentives.
Even before the enhanced benefit phaseout, Republican led states were outperforming Democrat led states in recovering. Of the top 20 states that recovered the fastest from the pandemic (measured in terms of the percentage of jobs recovered that were lost), 17 have Republican governors. Idaho and Utah lead the pack, having recovered more jobs than they lost from the pandemic. They recovered 114.4% and 113.2% of their respective job losses.
Matt Palumbo is the author of Dumb and Dumber: How Cuomo and de Blasio Ruined New York, Debunk This: Shattering Liberal Lies, and Spygate
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