GOP States that Cut Jobless Aid Still Suffering Worker Shortage, and Now Rise in Poverty


CBS News: In May, Missouri Governor Michael Parson explained he was directing the state to cut off $300 in weekly jobless payments, months before the federally funded benefits were due to expire in September. The “excessive” aid had “incentivized people to stay out of the workforce,” he said.

But Parson’s plan to supercharge hiring by curtailing jobless benefits may not be paying off, based on a new analysis of hiring data from Gusto, a company that handles payroll and other services for small and midsized businesses.

So far, a dozen states that were the first to cut pandemic jobless benefits have experienced hiring growth on par with states that kept the federal benefits, the Gusto analysis found. These 12 states, all of which have Republican governors, blamed the generous unemployment benefits for keeping workers on the sidelines, but early evidence suggests that other issues — ranging from pandemic health concerns to problems with childcare — may be weighing on the job market, Gusto economist Luke Pardue said.

“These benefits [were] ended early in order to try to speed up economic growth, but this data shows that this policy didn’t have that intended effect,” Pardue noted.

He added, “At the end of the day, if these governors have in mind creating a longer-term, sustainable recovery, and if we want a speedy recovery, ending unemployment insurance isn’t the silver bullet.”

The dozen states that ended unemployment aid by June 19 — Alabama, Alaska, Idaho, Indiana, Iowa, Mississippi, Missouri, Nebraska, New Hampshire, North Dakota, West Virginia and Wyoming — saw its employment headcount grow 11.6% since April 2021. By comparison, hiring has grown at relatively the same rate, 11.2%, in states that kept the benefits, the Gusto analysis found.

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