Unemployment Benefits

Have pandemic payments cuts been effective for people to get back to work?

850,000 new jobs in June could support Republican views on unemployment benefits but it is too soon to tell.

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Have pandemic payments cuts been effective for people to get back to work?
Alba Vigaray EFE

In June the Labour Department reported a labour growth of 850,000 jobs, a large increase on the 559,000 workers of May.

The decision by 25 states to end their federal unemployment programmes was aimed at coaxing people back into the workplace and by numbers of workers it seems to have worked.

But the multiple and varying factors make it difficult to accurately tell at this stage.

Have the cuts worked?

On first look it may appear that the cuts have pushed up the numbers returning to the workforce. The number of people in new jobs has risen faster than the three-month average.

But analysts say it will take more time before the real results of the cuts can be seen, although it

Furthermore, the jobless rate remained at 5.9%, showing how people are not leaving unemployment benefits as quickly as Republicans would like.

It will be seen in future months how much these states will be affected by the end of the enhanced benefits although it is expected that June will be the last month where labor supply will be "constrained."

Why are the programmes being ended?

The states are withdrawing from all federal programmes created by the CAREs Act, including the $300 dollar weekly supplement to benefits.

Critics of the programmes say that these funds make it more profitable to stay at home rather than look for work.

However it is difficult to say with certainty why Americans could be reluctant to go back to work.

With only 47.6% of Americans fully vaccinated there are still risks at working in the sectors desperate for jobs. The McDonald's and Chipotle restaurant chains have announced they are increasing the wages of workers to fill the shortage, with McDonald's giving their workers a wage of $17 an hour, up from $11.

Who is being affected by the cuts?

Looking at Labor Department data, CNBC estimates that across the US around 3.7 million Americans will be affected by states’ opting out of the enhanced unemployment programmes.

A list of all states that have ended or are ending the programmes: Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Maryland, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia and Wyoming.