Home Posts Beginning This Weekend, Unemployment Benefits Will Be Reduced.
Beginning This Weekend, Unemployment Benefits Will Be Reduced.
Unemployment

Beginning This Weekend, Unemployment Benefits Will Be Reduced.


Shannon Meyer of Louisburg, Missouri, is about to lose the $363 weekly income she has received from the federal government since she stopped working as a home health aide due to the coronavirus pandemic last year.

“I will go back to being very, very poor and not spending any money on anything other than basic necessities,” Meyer told Stardia, recalling how she felt after her job ended but before her benefits began last year.

Missouri, Alaska, Iowa, and Mississippi are the first states to see federal unemployment benefits end early, with no more checks being issued after Saturday, June 12. Congress created the extra benefits last year to help workers cope with the pandemic, but Republican governors in 25 states have pulled out of agreements with the US Labor Department in recent weeks.

Missouri Gov. Mike Parson (R) stated last month that “many business owners and employers across our state are still struggling, not because of COVID-19, but because they can't find people to fill the jobs.”

Democrats intended for the benefits to last until September, but President Joe Biden has given his approval to states canceling them early, despite the fact that Democrats never expected states to refuse the money. Some labor law experts and Sen. Bernie Sanders (I-Vt.) have said the benefits must be paid, but the White House disagrees.

Republicans claim that the federal government's $300 increase in weekly benefits made it impossible for businesses to hire, despite the fact that businesses complain about worker shortages even when federal benefits are not in place. For example, nearly half of Missouri businesses surveyed by the state labor department in 2019 reported a shortage of qualified workers.

States are not only canceling the extra $300, but also programs that cover gig workers, part-time workers, and the long-term unemployed, groups that are ineligible for regular state benefits, which have stringent earnings requirements and cover only a fraction of the workforce. (Four states are canceling only the extra $300 and keeping the other programs.)

Aside from anecdotal complaints from employers and weaker-than-expected job reports from the U.S. Labor Department, there isn't much evidence that the benefits were hurting hiring. Indeed.com job search activity actually decreased in the four states that ended federal unemployment insurance benefits this week.

Indeed Hiring Lab economist Jed Kolko wrote in a blog post, “It is unclear why search activity is below the baseline in states where federal UI benefits are ending soon.” If overly generous federal UI benefits were holding back job seekers, “we would expect search activity to increase, relative to the national trend, in states where those benefits are ending sooner.”

According to a Century Foundation analysis, more than 4 million workers will lose their benefits prematurely in the next two months.

Are you about to lose federal unemployment benefits? Will losing benefits motivate you to look for work? Tell us about it by emailing [email protected] and including your phone number if you're willing to be interviewed.

Meyer, 57, said she worked as a home health aide for several years prior to the pandemic, earning only $9.45 an hour, Missouri's minimum wage, and now receives only $63 per week from the federal Pandemic Emergency Unemployment Compensation Program, which provides a continuation of what workers received in state benefits after they have used up all available weeks of state benefits.

The extra $300 was critical in Meyer's case.

“With the extra money coming in, I could buy things I needed,” she explained, citing hardware store materials for winterizing her home and a $100 used barbecue grill.

She used to be a cook and a waitress, but despite the restaurant industry's claims of a "labor shortage," she has not received callbacks.

Meyer has recently been babysitting for her daughter, who works at a medical clinic but cannot afford child care for her infant; when her benefits run out, her daughter will pay her $100 per week for her assistance, Meyer said.

Meyer does not understand why governors would cancel federal benefits that do not cost the state money but provide residents with a lot of money to spend in local economies. Missouri, for example, will forego $770 million in federal income for 147,000 workers, according to The Century Foundation.

“They just took away everyone’s purchasing power,” she said, predicting a difficult summer.

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