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Study: States that cut federal unemployment benefits added jobs twice as fast

September 9, 2021

Federal pandemic unemployment benefits ended for millions of jobless Americans Monday, creating mixed feelings about the future of the recovery.

While the expanded unemployment benefits provided a critical lifeline to people who lost jobs due to the pandemic, some economists argued the extra $300 weekly federal payments, on top of state unemployment benefits, disincentivized workers from rejoining the labor force. Federal relief programs also allowed people to receive benefits for up to 53 weeks, on top of 26 weeks of state benefits, on average.

Business leaders claimed the generous UI benefits were creating a worker shortage. Employers posted a record 10.1 million job openings in June, exceeding the number of unemployed Americans for the first time since the start of the pandemic. Meanwhile, the National Federation of Independent Business reported last week that a record 50% of small business owners had job openings they couldn’t fill.

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Filed Under: Business, Home Featured

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