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Republican governors in three states announced this week that they are cutting off extended federal unemployment aid to residents that was set to expire in September.
As states begin relaxing coronavirus restrictions, governors in Arkansas, Montana and South Carolina have revived long-running GOP arguments that unemployment payments prevent people from returning to work, despite mounting fears among workers of Covid-19 exposure in low-wage jobs, and childcare costs in areas where options are limited or unavailable during the public health crisis and other concerns.
The cuts will prematurely target the $300 in additional weekly federal payments on which millions of Americans have relied throughout the pandemic in addition to their state-level payments.
“The $300 federal supplement helped thousands of Arkansans make it through this tough time, so it served a good purpose,” Arkansas Governor Asa Hutchinson said in a statement. “Now we need Arkansans back on the job so that we can get our economy back to full speed.”
Montana Governor Greg Gianforte claimed that “too many employers” in the state “can’t find workers”. South Carolina Governor Henry McMaster claimed that “in many instances, these payments are greater than the worker’s previous pay”.
A statement from the US Labour Department said that “we’ve seen no evidence of lower rates of workers reentering the workforce or higher rates of businesses worried about employee availability”.
The GOP arguments are nothing new – Republicans have long stated that they believe unemployment insurance payments can discourage work, and business owners have often complained that workers are not willing to work for the wages offered.
But their complaints are now inflamed by a nation eager to resume business as usual and opposition to a Democratically controlled Congress and White House that supports extending unemployment assistance as well as a number of federal safety nets.
House Majority Whip James Clyburn of South Carolina said he was “disappointed” in the statement from his state’s governor.
“We might be talking about the ‘big lie’ as it related to the elections, but very close to that is this notion that people don’t want to work,” he told CNN’s State of the Union on Sunday.
“I have met a lot of people who have stayed out of work because they can’t find childcare for their children,” he said. “This notion that people are not going to work because they’d rather stay at home, make more money drawing unemployment – I’ve been hearing that all of my life. It’s not true, it’s never been true.”
Employers added 266,000 jobs in April, according to Friday’s April jobs report from the US Labor Department, but unemployment overall rose slightly from 6 per cent to 6.1 per cent.
But 331,000 jobs were added in leisure and hospitality, the most gains in any sector, signalling that the narrative of a slowdown or labour shortage for bars and restaurants – among the first signs of returning to “normal” as more hospitality businesses open – has not happened.
Job increases last month were largely among the lowest-paying sectors, like hospitality, which are more likely to benefit from the supplemental federal benefits.
Heidi Shierholz, policy director at the Economic Policy Institute, said that Labor Department data reveals that claims of worker shortages in the hospitality industry “are largely the result of frustration on the part of restaurants that they can’t find workers to fill jobs at relatively low wages”.
“Hard to single out unemployment benefits as ‘dampening’ job growth in the lowest-wage industries when those same industries are the ones with the fastest job growth,” said economist Ben Zipperer.
South Carolina’s labour department estimated that if half of the people currently receiving unemployment go back to work, a best-case scenario considering the number of jobs available, they will earn roughly $372m in collective wages from employers – compared to the more than $600m in benefits that the state is rejecting from the federal government.
The jobs report also underscored the stark disparities in distribution of domestic labour. Roughly 165,000 women ages 20 and older dropped out of the workforce between March and April, meaning they are neither working or looking for work, after 495,000 women returned to work in March, according to an analysis from the National Women’s Law Center.
The net number of women who have left the labor force since the start of the pandemic is nearly 2 million, the report found.
“We’re still digging out of an economic collapse,” Joe Biden said in remarks on Friday. “The economy still has 8 million fewer jobs than when this pandemic started. More workers are looking for jobs and many can’t find them. While jobs are coming back, there are still millions who are looking for work.”
Regrowing the economy also is in tandem with a public health crisis that officials are working to combat through an aggressive vaccination campaign that is beginning to plateau, as demand winnows and hesitancy persists.
More than 4.2 million Americans are not working because they are concerned about getting or spreading Covid-19, according to Census survey data from the second half of April.
Nearly 2.5 million Americans experienced coronavirus symptoms or were caring for someone who did, and 6.8 million said they were caring for children who were not in school or daycare, the survey found.
Rebecca Dixon, executive director of the National Employment Law Project, said in a statement that ending “fully federally funded pandemic unemployment insurance programs is cruel, ill-informed” and will disproportionately impact women and communities of colour that need aid the most.
“This crisis is far from over,” she said.
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