$300 unemployment benefit: which states still keep payments?

Citing labor shortages due to overly generous unemployment compensation, the governors of more than two dozen states have ended or will end at least one or all of the federal unemployment insurance programs early, nearly all Republican led. In a handful of other states with Democrat governors but Republican-controlled legislatures, Republican lawmakers are pushing to end the $300 weekly unemployment booster.

States are taking different approaches to encourage their residents to go back to work as the economy reopens. Four of the states that are ending participation in the federal programs have opted to give those that reenter the workforce a cash bonus. Many other states have simple reinstated work search requirements instead of dropping the enhanced jobless compensation.

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Ending enhanced unemployment compensation hasn’t moved people to search for work

The move to end federal unemployment benefits so far hasn’t had the desired effect in the states where participation has ceased. Four states stopped paying the $300 weekly extra to jobless compensation as of 12 June. In those states - Alaska, Iowa, Mississippi and Missouri - the job searches were about four percent less than the national average according to data from the US Bureau of Labor Statistics for May.

Eight other states which ended their participation a week later showed dampened enthusiasm to look for work as well. Alabama, Idaho, Indiana, Nebraska, New Hampshire, North Dakota, West Virginia and Wyoming saw job seeking activity one percent below the national average.

“You’d think they’d be searching more,” Indeed economist AnnElizabeth Konkel told CNBC regarding the job data. “At least right now, this does push back on the idea that federal unemployment benefits are the main reason there are labor market frictions.”

Lawmakers push to end $300 weekly booster to benefits

Three states – Michigan, North Carolina and Wisconsin, now have legislation pending the signature of their respective state’s governor to end the $300 a week in extra unemployment compensation. All three states have Republican-controlled state legislatures and Democrat governors. It is expected that two of the three governors will veto the bills while it isn’t certain if North Carolina Governor Roy Cooper will do so.

The North Carolina bill includes using federal covid-19 relief money to provide subsidies for child care to everyone who is on the waiting list. Child care and paying for it has been one of the major hurdles to getting mothers back into active employment. The bill left out an earlier proposal to offer a $1,500 signing bonus for those who go back to work using federal funds.

A statement from Republican North Carolina Senators Richar Burr and Thom Tillis to Governor Cooper read “The employment shortage caused by exorbitant federal unemployment benefits is a real and serious threat to North Carolina’s recovery.”

Lawmakers in Kansas passed a non-binding resolution calling on Governor Laura Kelly to end the $300 weekly extra payment. Governor Kelly is opposed to such a move. Likewise, New Mexico Governor Michelle Grisham received a letter from Republican leaders in the state House of Representatives with a similar request to encourage jobless New Mexicans to return to work. In the case of New Mexico though lawmakers asked for a “one-time $1,200 return-to-work bonus once an unemployed worker has been on the job for a month,” to be created in place of the weekly additional payment.

States without plans to end $300 weekly extra unemployment benefit until September

California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Maine, Massachusetts, Minnesota, Nevada, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington

States that will end one or all enhanced federal unemployment compensation

26 June

27 June

30 June

3 July

10 July

31 July

(*) states that will only end $300 weekly boost to unemployment assistance