Terminating Employment Benefits Early Is Not Encouraging People to Find Work

An unrecognizable woman files for unemployment benefits after losing her job during the COVID-19 pandemic.
SDI Productions / Getty Images/iStockphoto

Some state governors have blamed pandemic-related unemployment benefits for discouraging workers from finding new jobs. However, new data suggests that for the 12 states that terminated unemployment benefits early, it isn’t working.

See: Ending Unemployment Insurance State Benefits Caused An Increase in Job Searches
Find: More States Move Toward Ending Federal Unemployment Benefits Early — Is Yours One of Them?

Job hunting in the 12 states that ended federal unemployment programs — including the extra $300 a week — has been subtle, indicating that the strategy may not be working as planned, according to a new analysis by Indeed published Tuesday and as reported by CNBC. The original expiration date was September 6.

There are 25 Republican-led states to end unemployment programs early. According to Daniel Zhao, a senior economist at Glassdoor, 3.9 million Americans will be affected by these state decisions, reports CNBC.

Popular job site Indeed found that job searches were 4% below the national average for Alaska, Iowa, Mississippi and Missouri, which halted the federal benefits June 12, noted CNBC. In Alabama, Idaho, Indiana, Nebraska, New Hampshire, North Dakota, West Virginia and Wyoming — which ended benefits June 19 — searches were 1% lower.

Make Your Money Work for You

See: 24 Ways To Stretch Your Unemployment Benefits
Find: Here’s a Full List of Unemployment Resources for Your State

Governors claimed that these benefits were an incentive to stay home, contributing to the worker shortage felt across the nation, mentioned CNBC. Meanwhile, critics argued that these federal programs aren’t making a big impact on people’s decisions and that reeling back benefits will only hurt the economy.

“The share of national job search activity in these states, measured by clicks on job postings, is below the late April baseline,” said Jed Kolko, chief economist at the Indeed Hiring Lab. “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 have ended.”

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About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.

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