The federal government had granted enhanced unemployment benefits to workers in response to the pandemic, providing an extra $1200/month to the unemployed. Now nearly half the states are planning to end these benefits according to SHRM.org.
Four states, Alaska, Iowa, Mississippi, and Missouri, will drop the benefits on June 12, the earliest possible date. The federal government plans to pull the program completely on September 6. Critics of the enhanced unemployment benefits program say that the extra money has dis-incentivized workers to return to work.
Employers have also complained that their unemployment insurance taxes have gone up because of the program along with the lack of candidates. There have been several theories about why there are so few applicants right now, including:
- The lingering effects of the pandemic
- More pandemic-related early retirements than expected
- People holding out for their old jobs based on receiving a temporary layoff or furlough
- Underqualified applicants
The federal government disagrees with the idea that American workers do not want to seek jobs when the government is giving them extra money for unemployment. Democratic lawmakers have defended the bump in payments by citing the costs of child care.
We will need time and research to understand the reasons why the demand for workers has remained so high despite the lowering of pandemic-related restrictions.