When the American Rescue Plan was signed into law this past March, it did more than just put $1,400 stimulus checks into recipients’ bank accounts — it also boosted and extended unemployment benefits for those who were jobless. In fact, anyone entitled to unemployment benefits gets an extra $300 a week through early September. So, why work, right? This from microsoft news.
Well, some states are planning to pull the plug on boosted benefits early. And jobless residents in those states should prepare to make alternative plans.
Critics of boosted unemployment benefits have long said that giving the jobless that extra money would take away their incentive to seek out work. And now, a number of states are facing labor shortages as companies struggle to hire.
As such, there are already five states that will be ending boosted unemployment well ahead of the September deadline:
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Alabama will be opting out of boosted benefits starting June 19
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Arkansas will stop the $300 weekly boost on June 26
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South Carolina will end boosted benefits at the end of June
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Montana will stop paying extra benefits by June 27, though it will, instead, grant the jobless a one-time $1,200 bonus for returning to work
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Mississippi will end boosted benefits on June 12
Of course, anyone collecting unemployment and living in one of these five states will have to gear up for the fact that their extra $300 a week will be going away. And that may, in turn, prompt more people to go out and apply for jobs.
But things are never so simple.
For one thing, many school districts across the country have yet to open for full-time, in-person learning. As such, some people may be staying out of the workforce not because they don’t want a job, but because they don’t have access to childcare that would allow them to work full-time. Also, for some lower-wage earners, the cost of childcare can effectively wipe out their income, so even if it’s possible to find an alternative to in-person school, it may not make sense for some families financially.
Time will tell if pulling boosted unemployment benefits early will address some states’ labor shortages, and likewise only time will tell if the moves the above states are making will lead to an increase in employment. In April, the U.S. jobless rate actually rose slightly when economists were largely expecting it to decline. Part of the reason could very well be that there are jobs out there, but some people on unemployment didn’t rush to take them.
