WASHINGTON — More than 1.9 million Americans in Alabama, Mississippi, and 14 other Republican-led states are set to have their unemployment checks slashed significantly starting in June, as GOP governors seek to restrict jobless assistance in an effort to force more people to return to work.
The cuts are likely to fall hardest on roughly 1.4 million people who benefit from stimulus programs Congress adopted at the height of the pandemic, including one targeting those who either are self-employed or work on behalf of gig-economy companies such as Uber. Beginning next month, many of these workers are likely to receive no aid at all.
A campaign is emerging by GOP leaders to combat what they consider a national worker shortage. On Thursday, Arizona and Ohio became the latest states to announce plans to scale back benefits, out of a belief the generous federal payments parceled out over the past year have deterred people from returning to their old positions even though the health crisis is waning.
The reality is more complicated, labor experts say.
The slowdown in hiring may instead reflect workers’ concerns about their safety and their difficulty obtaining child care, or their trouble finding suitable positions in hard-hit industries, such as tourism, on top of mounting frustration about wages they consider too low. That means the loss of unemployment benefits over the next month threatens to inflict new financial harm on those who say they’re already struggling.
At least 16 GOP-led states have announced plans to cut benefits: Alabama, Arizona, Arkansas, Georgia, Idaho, Iowa, Montana, Mississippi, Missouri, North Dakota, Ohio, South Carolina, South Dakota, Tennessee, Utah, and Wyoming.
Starting next month, more than 557,000 workers in these states are expected to have their payments decrease by $300 each week, according to a Washington Post analysis of federal claims data released Thursday. Millions of Americans have received the extra allotment under a stimulus program Congress passed earlier this year. In these 16 GOP-led states, however, out-of-work residents soon will be able to collect only as much as their unemployment insurance programs allowed before the pandemic, which in some parts of the country is well below poverty-level wages.
For a second group of about 863,000 workers, their governors’ cuts mean they stand to lose all of their benefits outright. This includes out-of-work Uber drivers and others who are self employed. These workers had obtained aid for the first time under a second stimulus initiative, known as Pandemic Unemployment Assistance (PUA), but their states are ending participation in the effort.
A final group of about 513,000 workers who collect traditional unemployment benefits each week similarly may have their assistance reduced to zero. These Americans rely on a federal program that pays them extra weeks of jobless support even if they have exhausted their states’ annual allotments. Republican governors are cutting their participation in this effort, as well, leaving workers who have been unemployed for prolonged periods with potentially no more options to obtain aid.
For unemployed workers such as Stephanie Pannell, a 53-year-old single mother in Harrison, Ark., the Republicans’ efforts threaten to deliver another massive financial blow in what has been a grueling year. The pandemic aid has been a financial lifeline for her and her 14-year-old son, providing $419 a week after taxes — just enough to cover her $700 rent and take care of other living expenses, but little else.
On Friday, though, Arkansas Governor Asa Hutchinson announced the state plans to cut recipients off the program at the end of June.
’'For us to lose this is going to be catastrophic, because this is how we’ve made it,’' said Pannell, who receives money through the PUA program. ’'People are like, ‘You don’t want to work.’ Are you crazy? I want to work, because I can make a lot more than this pittance. But because of my son’s health, I cannot risk it . . . They’re acting like they’re giving us gold bullion.’'
More governors are expected to follow the lead of Arkansas and other GOP-governed states, which, combined with a recent decline in the number of Americans newly seeking unemployment, could change how many people are affected. On Thursday, the Labor Department said 473,000 Americans had filed new unemployment insurance claims last week, marking another pandemic low.
The state cuts follow by a week the US government’s reporting of slower-than-anticipated hiring in April. Even as the country ramped up efforts to vaccinate millions — and states began to lift their business restrictions — the economy added only 266,000 jobs last month.
The dour data prompted Republican lawmakers and lobbying groups, including the US Chamber of Commerce, to call on Washington to rescind its recent unemployment aid. They took aim at the most recent relief package, the American Rescue Plan, claiming its bigger weekly payments and other benefits had made it prohibitively difficult for employers to fill open slots.
The White House maintains that unemployment aid has not contributed to a worker shortage. But President Biden did appear to extend an early concession to his GOP critics this week, promising to ’'make it clear’' that Americans must take a job if they are offered one that is suitable — or risk losing their benefits. States long have maintained such a policy, anyway.