Shocker: Cutting Federal Unemployment Benefits Is Getting People Back to Work

AP Photo/Evan Vucci

We can file this one under “water is wet.” Contrary to what Democrats and their close friends and allies in the activist media tried to tell us, extended federal unemployment benefits were one of the primary contributors to the joblessness issue that many states have been experiencing. Small businesses complained bout the lack of available workers to fill necessary positions. Some companies even offered bonuses and $15 per hour to entice people to take jobs.

The issue, of course, was the fact that in many cases, people were being paid more to stay home than to return to the workplace. Naturally, this created a serious problem for businesses struggling to stay afloat after being hit with the COVID-19 pandemic.

But, according to a recent report, jobless claims have been on the decline, particularly in states that nixed federal benefits earlier than September when the payments were supposed to expire. The Wall Street Journal reported: “The number of unemployment-benefit recipients is falling at a faster rate in Missouri and 21 other states canceling enhanced and extended payments this month, suggesting that ending the aid could push more people to take jobs.”

In its report, the Journal referred to an analysis conducted by Jefferies LLC which found that “the number of workers paid benefits through regular state programs fell 13.8% by the week ended June 12 from mid-May – when many governors announced changes – in states saying that benefits would end in June.”

Aneta Markowska, chief financial economist for Jefferies, told the Journal: “You’re starting to see a response to these programs ending.” Workers can still receive state unemployment benefits after the federal payments end.

While the enhanced benefits are set to expire on Sept. 6, many other states are planning to discontinue them sooner. This should be welcome news to struggling businesses. According to Markowska, “employers were having to compete with the government handing out money, and that makes it very hard to attract workers.”

Of course, the decision to end federal benefits is being met with opposition in some states. According to Yahoo News, “workers in Indiana, Texas, and Maryland have filed lawsuits against their respective states for canceling pandemic-era unemployment benefits early, a growing movement that one expert said could be successful in some states.”

In Indiana, Marion Superior Court Judge John Hanley temporarily reinstated the payments pending a final ruling.

“The decision by Judge Hanley was a breakthrough, as many states have similar state law provisions that could be brought up in court,” Andrew Stettner, an unemployment insurance expert told Yahoo Money. “I expect more judges to be sympathetic to the facts in the cases.”

The Unemployed Workers Union in Maryland filed a class-action lawsuit against Gov. Larry Hogan for his decision to end federal benefits on July 3.

“Our petition is that this order is illegal and a threat to the public welfare,” said Alec Summerfield, an attorney representing the six jobless workers suing, during a Thursday press conference. “People are depending on these $300 even if it’s just for three months to carry them through to find a job and put food on the table.”

Two Facebook jobless workers groups in Texas organized a lawsuit to place a temporary restraining order against Gov. Greg Abbott who is also planning to end benefits. The request was denied, but the groups involved plan to seek an injunction.

Regardless of the naysayers, this is a step in the right direction. As the coronavirus pandemic abates, it is time for things to get back to normal. Some are resisting progress, insisting on maintaining mask mandates and shutdown orders. These are likely the same type of folks who wish to continue federal benefits until the September expiration date. Indeed, it would not be surprising if Democrats pushed to extend these benefits until well after the fall.

However, it seems that despite their protestations, normalcy is making a return.