An unexpected slowdown in hiring nationwide has prompted some Republican governors to start slashing jobless benefits in their states, hoping that the loss of generous federal aid might force more people to try to return to work.
The new GOP cuts chiefly target the extra $300 in weekly payments that millions of Americans have received for months in addition to their usual unemployment checks. Arkansas on Friday became the latest to announce plans to cancel the extra benefits, joining Montana and South Carolina earlier in the week, in a move that signals a new effort on the part of Republicans to try to combat what they see as a national worker shortage.
Republican policymakers have long opposed these heightened unemployment payments and unanimously voted against extending them earlier this year. But party leaders nationwide have grown more emboldened in recent days, particularly as the U.S. government on Friday released new data showing the economy added only 266,000 jobs in April.
“More states are expected to follow,” predicted Rep. Kevin Brady, R-Texas, the top Republican on the tax-focused House Ways and Means Committee in a statement Friday, adding the White House is “in denial” about the economic effects of its policies.
Business groups including the U.S. Chamber of Commerce, meanwhile, called on Washington this week to cancel the program nationally before its planned expiration in early September. Such a repeal is unlikely, however, given Democrats’ majorities in Congress – and their broad support for expanding federal safety net programs writ large.
Many Democratic lawmakers stress the payments remain necessary because families are hurting and parents simply cannot afford to return to work in the absence of accessible, affordable child care. In some states, Republicans also have ended their participation in pandemic relief programs that benefit those who drive for Uber, deliver for Grubhub or otherwise participate in the so-called gig economy, further troubling congressional advocates for heightened unemployment aid.
“A deeply disturbing trend is emerging with Republican governors cutting off enhanced jobless benefits months early, and Republican interest groups pushing the move,” said Sen. Ron Wyden, D-Ore., the chairman of the Finance Committee. “Cutting off all benefits while millions of workers have not yet been able to return to work could cause tremendous financial pain and sabotage our economic recovery.”
The new political dispute over unemployment reflects the broader concern—and growing confusion—about the health of the U.S. economy as businesses reopen, states lift restrictions and doctors continue their push to vaccinate as many Americans as possible against the coronavirus.
Those developments count among the early achievements of the Biden administration, which attributes some of the gains—and a steady drop in the number of newly unemployed Americans—to the $1.9 trillion stimulus law that was passed in March. Biden has also sought to secure roughly $4 trillion in additional spending to repair the nation’s infrastructure and bolster federal safety net programs, believing big government investments can close the country’s persistent economic gaps.
But Republicans counter that the consequences of that spending are starting to show, threatening to raise prices for consumers and overheat the economy before it has fully recovered. In a sign of the fight to come, Senate Minority Leader Mitch McConnell, R-Ky., on Thursday said the president’s agenda already had caused inflation and spawned a national worker shortage, which he said is “directly related to this recent bill that just passed.”
The White House has said it does not believe the federal benefits have created a significant crunch in the labor market. Asked if enhanced unemployment benefits had any affect on Americans’ desire to work, President Joe Biden on Friday rejected the notion: “No, nothing measurable,” he told reporters.
Some Republican leaders outside of Washington still have sought to blunt the perceived impact of Biden’s agenda—beginning with the enhanced unemployment payments that Congress adopted in March. The stimulus, known as the American Rescue Plan, provides $300 per week in extra, federally funded unemployment benefits until early September.
Hours after the Biden administration reported lower-than-expected employment numbers, Arkansas Gov. Asa Hutchinson announced his state would cease providing the extra $300 in weekly unemployment payments in June. In a letter to Arkansas’s labor agency, Hutchinson attributed the decision to the fact that the state’s economy is “rebounding so quickly.”
South Carolina Gov. Henry McMaster announced his plan to cease participating in the program earlier this week. Indiana Gov. Eric Holcomb signaled to local reporters that the state could soon follow suit. And Montana Republican Gov. Greg Gianforte said he plans to offer residents a one-time return-to-work payment. He lambasted the federal stimulus benefits as “no-work bonuses” in a tweet Friday, stressing it would not encourage Americans to seek new jobs.
The early trend troubled labor experts. The enhanced unemployment payments for months have offered a critical financial lifeline to millions of Americans, including those in roughly a dozen states—some led by Republican governors—that normally do not offer benefits that meet or exceed the poverty line. In canceling the $300 weekly benefit, some GOP governors also announced plans to end their states’ involvement in a federal program that helps gig-economy workers and other independent contractors, who traditionally are not eligible to collect jobless support at all.
Rebecca Dixon, executive director of the National Employment Law Project, said the states now risk rolling back the much-needed federal aid too prematurely, putting families who do earnestly aspire to work at renewed financial risk. She said GOP governors nationwide similarly sought to reopen their states too soon in the more dire, and deadly, early months of the coronavirus pandemic.
“They’re misguided in their thinking about why people aren’t returning to work,” said Dixon, whose organization advocates for greater unemployment assistance. “There are all of these ways our care infrastructure is not back up.”
Other Republican governors, meanwhile, have newly reinstated requirements for unemployment aid that they had suspended earlier in the pandemic when millions of workers suddenly were thrust out of a job. Arizona Gov. Doug Ducey, for example, issued an executive order earlier this month that once again requires residents to prove they are seeking jobs to continue collecting benefits. And Florida Gov. Ron DeSantis this week pledged the Sunshine State soon would require the same.
“We absolutely can put more people to work,” he said Wednesday.