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Nine More States to End Pandemic Unemployment Bonuses on Saturday

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On Saturday, nine states will join Iowa, Mississippi and Missouri in ending their pandemic-related unemployment benefits early in an effort to encourage people to go back to work.

CBS News reported these states are Alabama, Alaska, Idaho, Indiana, Nebraska, New Hampshire, North Dakota, West Virginia and Wyoming.

And by the end of July, an additional 14 states will join them in eliminating or modifying the federal bonus.

Of the 26 states going this route, only one has a Democratic governor: Louisiana.

How Did We Get Here?

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Last March, former President Donald Trump signed into law the CARES Act that included the Federal Pandemic Unemployment Compensation plan, which doled out an additional $300 in weekly unemployment compensation for those affected by the pandemic.

President Joe Biden extended the bonus through the week ending on Sept. 6 of this year.

While the extra money helped many families truly impacted by the lockdown to survive, many states soon realized that individuals received more money in unemployment benefits than they ever could earn in working.

Jobs Are Everywhere, But Nobody Wants Them

The most recent Bureau of Labor Statistics report showed that a whopping 9.3 million jobs were created in the month of April, a 6 percent increase from March and the highest number ever reported by the BLS, which began keeping records in 2000.

Has your state ended pandemic-related unemployment benefits?

Interestingly, the hiring rate also remained unchanged. It is worth noting that May’s unemployment number was coincidentally the same — 9.3 million.

Essentially, for every unemployed person, there is more or less one available job. Of course, this ratio varies substantially by region, but the truth remains that if an unemployed person wants a job, a job is generally available.

Incentivizing the Wrong Behavior

In reviewing how the weekly bonus affected each state, some startling statistics jumped out. Recipients in Mississippi, for example, instead of receiving a maximum benefit of $235 per week, were receiving more than twice as much at $535 before the state ended the program.

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But for more liberal states that are still letting the money flow, like Massachusetts, recipients are now receiving a maximum benefit of $1,155, up from $855. And that doesn’t include other benefits such as nutrition assistance or state-covered medical insurance.

If an unemployed person in Massachusetts can make $60,060 a year, what incentive is there to leave the couch?

Some States Get Creative

A few states are not merely turning off the money tap and walking away. They are creating programs to use federal money more wisely.

Take Arizona, for example, which announced its new Arizona Back To Work program that will cancel the extra $300 on July 10.

In its place, the state will offer a $2,000 bonus if the currently unemployed can find and keep a job for at least 10 weeks.

“In Arizona, we’re going to use federal money to encourage people to work … instead of paying people not to work,” GOP Arizona Gov. Doug Ducey said in a statement.

The strength of the American economy is our Gross Domestic Product, which at $22 trillion is the highest in the world. Only by having a large and productive workforce can we continue to grow our economy, which now is even more necessary to lower government spending and tackle the debt.

“There is dignity in work,” Ducey said. “Ronald Reagan said the best social program is a job. I agree with that.”

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Eric Nanneman is a business and technology writer with more than 20 years of investment and banking experience, including stints at Bank of America, Charles Schwab, and Goldwater Bank. He was previously securities registered, holding the Series 7, 63, 9 and 10 FINRA licenses.
Eric Nanneman is a business and technology writer with more than 20 years of investment and banking experience, including stints at Bank of America, Charles Schwab, and Goldwater Bank. He was previously securities registered, holding the Series 7, 63, 9 and 10 FINRA licenses.

He graduated from Arizona State and the Pontifical College Josephinum with degrees in English and philosophy. He has one adult son and resides in Phoenix.




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