Between May to June, over half the states in the US had decided to end federal unemployment benefit stimulus checks. All except one had Republican governments. The reason they cited was labor shortages.
The Unemployment Stimulus Checks Are Still Required
In the states where the unemployment stimulus checks (in the form of the PEUC and PUA programs) were ended early, there are not many indicators suggesting that the move has resulted in employment increasing. Moreover, some states where the unemployment stimulus checks were continued reported greater employment gains than similar size states where they were discontinued.
For example, in North Carolina and Georgia, the population is about 10.5Mn for both. WSJ reports that Georgia had ended the unemployment stimulus checks in June, whereas North Carolina had continued. Now, Georgia has seen an increase of 2.8% whereas North Carolina reports a 3.2% growth rate of jobs.
As of the middle of August, about 9Mn people had filed for federal unemployment stimulus check benefits via the PEUC and PUA programs. The programs ended on 6th September. However, Capitol Hill does not seem to be interested at all in extending the programs further. Rather, Biden’s administration has told states to us funds allotted to them via the American Rescue plan to deal with severe unemployment levels.
On the state level as well there have been other reasons cited for why there won’t be any further extensions. Arkansas said that the state’s unemployment rate has decreased. Currently, its 4.5% is 1 entire % higher than August 2019’s figure. Oregon’s representatives said that the emergency funds from Biden’s Rescue plan have been allotted to other important matters already. As such, they will not be able to extend the unemployment stimulus checks.
On top of that, the jobs report of August has indicated a decreased rate of hiring, which would surely impact personal income when paired with the unemployment programs coming to an end.