Republican governors have collectively decided it’s time for their residents to return to work—whether they’re ready or not. So far, 19 states, all with GOP leaders, have said they plan to opt out of the federal unemployment programs created in response to the coronavirus crisis some time this summer, well before their scheduled expiration in early September. Echoing the complaints of business owners, they argue that the aid, which provides an extra $300 a week on top of what states typically offer and is available to the long-term unemployed who’ve exhausted their normal benefits, is creating severe labor shortages in their states, because people are choosing to collect a government check instead of finding a job.
“Employers are telling me one of the big reasons they cannot recruit and retain some workers is because those employees are receiving more on unemployment than they would while working,” Idaho Gov. Brad Little said in a typical statement last week. “We want people working. A strong economy cannot exist without workers returning to a job.”
These officials may not be entirely wrong when they say unemployment insurance is making life harder for employers. There are now more job openings than before the pandemic, yet hiring slowed down significantly last month, and workers in some industries, like hospitality, are clearly being choosy about when and where they return to work, in part because federal support allows them to be.
At the same time, there are other obvious reasons it might be taking a while for the labor market to rev back up to full strength. The pandemic, after all, isn’t actually over: Cases are declining, but the totals are still nearly as high as they were last summer. Given that many people have yet to be vaccinated, health concerns may be keeping some people like the immunocompromised on the sidelines of the labor market. Also, schools are only partially reopened in much of the country, meaning parents still have significant child care responsibilities that may keep them from working. According to the the Return to Learn Tracker, a project by the American Enterprise Institute and Davidson College that monitors school reopenings, as of May 3 just 50 percent of the nation’s school districts were offering fully in-person instruction, meaning that “all grade levels can attend school in buildings five days per week, though families can opt for fully remote instruction or a hybrid model.”
Notably, most of the states that have chosen to opt out of federal unemployment programs have done a lackluster job with their vaccine rollouts and are still leaning on some amount of remote learning. As of this weekend, all but two of them—Iowa and New Hampshire—had vaccinated less of their residents than the national average of 47 percent, according to the New York Times’ tracker. (New Hampshire’s impressive 85 percent figure may require an asterisk: The state reported a large bump in the number of fully vaccinated residents on May 16 that the Times says might be an error; before then, about 60 percent of the population had reportedly received one shot.)
Perhaps unsurprisingly, given their aggressive reopening plans, these GOP-led states are further along in the process of reopening schools. In several of them, however, at least a third of districts have yet to return to full in-person learning, and in Tennessee not even one third have made it to that point.
In other words, Republican states are blaming unemployment benefits for labor shortages at a moment when they have yet to fully address the public health or child care challenges that are almost certainly keeping some residents from working. And while cutting off government aid would successfully force some parents with kids at home or people with serious health concerns like the immunocompromised back into the workforce just as a matter of necessity, it’s not necessarily a humane way of going about things.
It might help to think about these issues in terms of a matrix. The more that people are vaccinated in a state, and the more schools that are open, the more it makes sense to nudge people back to work. If a state was firmly in the upper right-hand corner of this graph and was still experiencing severe labor shortages that were hindering the economy, it would have a stronger case for weaning people off UI. But as of now, almost none are really there. Maybe red states will be closer in a month or two when they’re set to cancel benefits, though by then schools will be out for the summer anyway.
It’s worth remembering that Republicans spent much of last summer complaining that unemployment benefits were holding back the country’s economic recovery, even though we’d yet to even get a vaccine and were in the thick of the virus’s early waves. Nudging Americans back to work at this moment isn’t as egregious now that shots are widely available. But they’re still putting a burden on workers in the interest of business.
Update, May 17, 2021, at 1:48 p.m.: This post has been updated to reflect that on Monday morning Indiana also announced that it would opt out of federal unemployment programs early.