Unemployment Benefits

What has Biden said about states restarting unemployment benefits?

As lawsuits mount to prevent 26 states from abandoning extra benefits early, Governors' resistance were quashed in the appeals court.

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What has Biden said about states restarting unemployment benefits?
Leah Millis Reuters

The Republican state-led move to end the unemployment benefits three months had prompted outcry from workers and politicians alike.

The legal fights that challenged the move had prevented the sudden termination of benefits but Governors were determined to appeal and overturn the judges' rulings.

But the President's camp has poured cold water over these plans and said the unemployment programmes can restart after the Governors' appeals were dismissed in appeals court.

The payments are still scheduled to end federally on September 6.

What has the Biden administration said?

The administration said on Monday states that have terminated pandemic unemployment benefits early can restart the programmes, but there may be a break in payments for some unemployed Americans.

The states were sued on the grounds that there is a state requirement to "cooperate with the US Department of Labor and maximize benefits for unemployed residents."

The appeals court agreed with the lawsuit and the resumption of payments have been green-lit by both the President and the judges, potentially allowing millions of Americans further respite from the covid-19 depression.

What next for the states that have restored the benefits?

Maryland residents will likely receive pandemic benefits until the federal end, after securing another court victory Tuesday, lawyers for the plaintiffs said.

Payments in Indiana could restart as soon as Friday, a state official said.

In a climb-down from comments last week Indiana Governor Eric Holcomb said in a statement, "We acknowledge the court of appeals decision today. Notwithstanding, the Department of Workforce Development will continue to work with the US Department of Labor on finalizing the pandemic unemployment insurance benefits to comply with the judge's order."

There are outstanding lawsuits in Oklahoma, Ohio and Texas, the results of which will determine whether residents can rejoin the unemployment benefits scheme.

Why are the payments being ended early?

Some 26 states are ending the extra benefits early with Governors arguing that the extra money is disincentivizing workers from coming back into the workplace.

But the evidence does not support this view and think there are larger and more varied reasons rather than giving the unemployed extra money per week.

A 5,000 person survey conducted by job search site Indeed listed these reasons behind people's unwillingness to find jobs:

  • nearly 25% listed covid-19 fear.
  • just over 20% listed a partner in work, which shows the link with needing childcare.
  • slightly under 20% said they had a suitable financial cushion to sit on.
  • barely 10% listed extra benefits as the reason to not look for work.

Between May and June the jobless rate rose by 0.3% to 5.9%, showing an early sign that the reduction in benefits is not incentivising people back into the workplace.