‘Time to end’ federal unemployment programs that incentivize people not to work: Oklahoma governor
Oklahoma Governor Kevin Stitt on his state opting out of federal unemployment benefits and banning the teaching of critical race theory.
Far more Americans are receiving unemployment benefits than the last time the jobless rate was at the current 6.1%, thanks to a major expansion of the federal safety net that has provided aid to millions of people out of work.
Yet many businesses and Republican officials say all that jobless aid has contributed to worker shortages in some industries, which is why most GOP-led states are moving to cut off the federal support.
About 15.8 million people received unemployment aid through one of several benefit programs during the week of May 8, the latest period for which data is available, according to a Labor Department report Thursday. That's nearly eight times as many people as received jobless payments in August 2014, when the unemployment rate was where it is now and roughly the same proportion of adults had jobs.
The decision by some states to end the aid early highlights the key role the benefits payments have played since the onset of COVID-19. Now, more people — and a higher proportion of the jobless — are receiving unemployment aid than in any past recovery, according to data that extends to the late 1960s. That expansion of aid, economists say, captured millions of people who in previous recessions had fallen through the cracks.
Arindrajit Dube, an economics professor at the University of Massachusetts Amherst, suggested that the enhanced aid was a key reason — along with three rounds of stimulus checks for most individuals — why Americans' incomes, as a whole, actually rose during the recession despite the loss of millions of jobs.
"That is a success story," Dube said, "and I think that's something we should look at and recognize as a good thing."
Another reason incomes rose is that so many people who lost jobs had been paid comparatively little, while higher-paid professionals who mostly worked from home generally kept their jobs. In fact, total wages and salaries have already rebounded to pre-pandemic levels, even though the economy has 8.2 million fewer jobs.
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In the fall of 2014, when the job market was in similar shape, just one-quarter of the unemployed were receiving aid. By then, emergency programs that provided benefits in the aftermath of the Great Recession for as long as 99 weeks had ended. And as the economy slowly improved, many states took steps to limit the availability of unemployment payments, such as reducing the duration of aid.
Now, more Americans are actually receiving jobless benefits that are officially counted as unemployed, though that reflects quirks in the data. The government says 9.8 million people are unemployed. But that doesn't include several million who lost jobs in the pandemic and have stopped looking for work; they aren't counted as unemployed.
As the economy improves, analysts say that the large proportion of people receiving benefits, along with the $300-a-week supplemental payment, may contribute to labor shortages. But jobless aid can also allow people the time to find work that is a good fit for their education and experience, which is helpful for the economy.