Home Posts Some Republican States Are Exchanging Unemployment Benefits For "return To Work" Bonuses.
Some Republican States Are Exchanging Unemployment Benefits For "return To Work" Bonuses.

Some Republican States Are Exchanging Unemployment Benefits For "return To Work" Bonuses.

Republicans in four states want to pay people receiving unemployment benefits a bonus if they return to work.

Twenty-four states, including Montana, Arizona, New Hampshire, and Oklahoma, have said they will soon cancel the additional $300 per week and other benefits created by Congress to combat the coronavirus pandemic.

Connecticut Gov. Ned Lamont (D) is increasing the bonus without reducing federal benefits.

Montana Gov. Greg Gianforte (R) announced earlier this month that the state would discontinue federal benefits and instead offer “return to work bonuses.” People who were receiving benefits on May 4 and then took and held jobs for four weeks will receive one-time bonuses of $1,200, the equivalent of four weeks of $300 payments.

“Our return-to-work bonus and reinstatement of pre-pandemic unemployment programs will assist in getting more Montanans back to work,” Gianforte said.

Montana and the other states will pay for the bonuses with funds from the American Rescue Plan, the Democratic relief bill that Republicans chastised for its "blue state bailout." The bill sent checks to most households, increased unemployment benefits, and provided about $350 billion to state and local governments to help them deal with the ongoing economic impact of the pandemic.

Democrats did not anticipate states canceling federal unemployment benefits and then using the relief money to pay return-to-work bonuses, but Senate Finance Committee Chair Ron Wyden (D-Ore.), who opposes canceling federal benefits, said the bonuses were a legitimate use of the funds.

“The American Rescue Plan’s state and local aid was designed to give states flexibility to meet their needs,” Wyden told Stardia in a statement.

“I have no objections to states using state and local aid funding for back-to-work incentives,” Wyden continued, “but those incentives do not give red state governors a pass on canceling jobless benefits and pulling the rug out from under millions of workers.”

More than 4 million workers will lose the extra $300 next month as states cancel benefits that would otherwise be in effect until early September. Congressional Republicans largely supported the benefits last year, while Donald Trump was president, but this month urged states to follow Montana's lead and cancel the benefits.

Return-to-work bonuses in Montana and elsewhere are similar to a 2020 proposal floated by Rep. Kevin Brady (R-Texas) last year as an alternative to additional federal unemployment benefits.

The Republican anti-unemployment-benefits campaign gained traction this year as businesses, particularly restaurants, complained that workers would not accept the wages they were offering.

The bonuses vary by state. Arizona announced that it will use $300 million from the Rescue Plan to pay workers $2,000 if they work full-time for 10 weeks and earn less than $25 per hour. Oklahoma is offering $1,200 to anyone who filed for unemployment in May and finds work for at least six weeks. New Hampshire will pay $1,000 for eight weeks of full-time work.

Many states have also used coronavirus relief funds to shore up their unemployment trust funds, allowing them to avoid raising business taxes to replenish them.

The bonus policies are a bad trade for people whose benefits are canceled and they are unable to find work, according to Andrew Stettner, an unemployment policy expert at The Century Foundation, a liberal think tank; however, the policy will benefit people who take jobs but are not paid for the first two weeks.

“Having a bonus helps with that, as well as expenses for child care, car repairs, uniforms, and other job-related expenses,” Stettner explained in an email.

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