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Unemployment benefits: Is the rate lower in states that are cutting benefits?

Texas, Ohio, Florida, and over twenty other states are ending federal unemployment benefits this summer, but is the labor situation better in those states?

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Unemployment benefits: Is the rate lower in states that are cutting benefits?
AMIRA KARAOUD REUTERS

The Bureau of Labor Statistics has released the May unemployment rates for each state and the District of Colombia. Compared to data from April, the average rate in unemployment fell .3%, from 6.1% to 5.8% with Delaware (-.5%), Rhode Island (-.5%), Connecticut (-.4%), Hawaii (-.4%), New York (-.4%), and South Carolina (-.4%) seeing the largest decreases.

The average unemployment rate for all states that are ending these additional payments is 4.6%, lower than the national average, and the average, 5.9%, for states keeping the benefits in place. This data serves as an important point of reference as twenty-six states have or plan to end all pandemic-related federal unemployment benefits this summer.

Compared to data from February 2020, in states where the payments will continue through the summer, the unemployment rate fell two percent on average, while the rate for the other states decreased less than one percent. 

How does unemployment compare to the national average in states that have already ended additional benefits?

Eleven states, Alabama, Alaska, Idaho, Indiana, Iowa, Mississippi, Missouri, New Hampshire, North Dakota, West Virginia, and Wyoming, have ended the additional benefits. These cuts include the $300 topper paid with state benefits.

Each of these states recorded an unemployment rate in May that was lower than than the national average.

However, of these states, five, Alaska, Indiana, Iowa, Missouri, and Wyoming did not see any changes or experienced an increase in the unemployment rate from April to May.

Additionally, none had reached the rate seen in February 2020, before the pandemic forced millions to lose their jobs. Altogether, when comparing the size of the employed civilian workforce of these eleven states to levels before the pandemic, there are still around 262,000 jobs missing. Only one state, Idaho, has actually grown the number of people working during the pandemic.

What about all states that have ended the federal benefits?

In addition to the five states above, Arizona, Florida, Arkansas, Ohio, and South Dakota, saw no changes or an increase in the percent of the labor force without work.

In Florida, unemployment has increased by 0.10% each month since March of this year. Ohio saw the greatest increase, 0.3%, compared to the April figure. Only four have reached their pre-pandemic level.

This could indicate that the economy may not be ready to bring in all workers employed before the pandemic began. However, leaders in all these states may argue that to inch closer to levels seen in February 2020, the benefits must be taken away to encourage workers to find a new job.

When looking at the size of the employed workforce across all states ending benefits, a gap of more than a million jobs still exists compared to data from early 2020. The gap is around four million for those states that will keep the benefits. But, those states employ around 20 million more workers than the other group of states.

Four states, Kansas (Not ending), Oklahoma (Ending), Oregon (NE), and South Dakota (E), recorded a larger workforce when compared to pre-pandemic levels.

Have any leaders rescinded their announcement to end federal benefits?


So far, no. All states plan to move forward with their plans.

On 26 June, Arkansas, Georgia, Texas, Ohio, Oklahoma, South Dakota, and Utah will become the latest states to stop the additional payments.