Unemployment Benefit Cuts Start This Weekend

Four Republican-led states are dropping federal unemployment benefits after Saturday.

Shannon Meyer of Louisburg, Missouri, is about to lose the $363 weekly income the federal government has paid her since last year, when she stopped working as a home health aide because of the coronavirus pandemic. 

“I will go back to being very, very poor and not paying any money on anything except basic necessities,” Meyer told HuffPost, recalling what it was like after her work stopped but before her benefits started last year. 

Missouri, Alaska, Iowa and Mississippi are the first states where federal unemployment benefits are stopping early, with no more checks going out after Saturday, June 12. Congress first created the extra benefits last year to help workers through the pandemic, but in recent weeks Republican governors in 25 states pulled out of agreements with the U.S. Labor Department. 

Missouri Gov. Mike Parson (R) said when he announced the cut last month that “many business owners and employers across our state are still struggling, not because of COVID-19, but because they can’t find people to fill the jobs.”

Democrats intended the benefits to continue until September, but President Joe Biden has given his blessing to states canceling the money early ― even though Democrats never expected states to refuse the money. Some labor law experts and Sen. Bernie Sanders (I-Vt.) have said the law requires the benefits to be paid, but the White House disagrees.

Republicans claim the extra $300 the federal government added to weekly benefits made it impossible for businesses to hire, even though companies complain of worker shortages when there are no federal benefits in place. Nearly half of Missouri businesses surveyed by the state labor department in 2019, for instance, said they faced a shortage of qualified workers. 

States aren’t just canceling the extra $300. They’re also cutting off programs that cover gig workers, part-timers and the long-term jobless, groups that are ineligible for regular state benefits, which have stringent earnings requirements and cover only a fraction of the workforce. (Four states are canceling only the extra $300 and keeping the other programs.)

There’s not much evidence that the benefits were hurting hiring beyond anecdotal complaints from employers and weaker-than-expected jobs reports from the U.S. Labor Department. Job search activity on Indeed.com, a website where employers post open positions, actually declined in the four states ending federal unemployment insurance benefits this week. 

“It is unclear why search activity is below the baseline in states where federal UI benefits are ending soon,” Indeed Hiring Lab economist Jed Kolko wrote in a blog post. “If overly generous federal UI benefits were holding back job seekers, then we would expect search activity to increase, relative to the national trend, in states where those benefits are ending sooner.

More than 4 million workers will prematurely lose benefits in the next two months, according to an analysis by The Century Foundation. 

HuffPost readers: Are you about to lose federal unemployment benefits? Will losing benefits encourage you to find a job? Tell us about it ― email arthur@huffpost.com. Please include your phone number if you’re willing to be interviewed. 

Meyer, 57, said she worked as a home health aide for several years before the pandemic, earning just $9.45 an hour, Missouri’s minimum wage. She receives just $63 per week from the federal Pandemic Emergency Unemployment Compensation Program, which provides a continuation of what workers received in state benefits after they’ve used up all available weeks of state benefits. 

In Meyer’s case, the extra $300 has been crucial.  

“With the extra money coming in, I could buy things I needed,” she said, such as material from the hardware store to winterize her house and a secondhand barbecue grill for $100. 

She used to work as a cook and a waitress but hasn’t received callbacks when she’s applied for those jobs, despite the hype of a “labor shortage” in the restaurant industry. 

More recently, Meyer said, she’s been babysitting for her daughter, who has a job at a medical clinic but can’t afford child care for her infant. With her benefits ending, she said, her daughter will pay her $100 a week for her help. 

Meyer doesn’t understand why governors would cancel federal benefits that don’t cost the state money but give residents a lot of cash to spend in local economies. Missouri, for instance, will forgo $770 million in federal income for 147,000 workers, according to The Century Foundation

“They just took away everyone’s spending power,” she said. “It’s going to be a rough summer.”