Several Governors are deciding to shorten the amount of time that individuals are allowed to claim pandemic unemployment benefits due to shortages in their state’s workforces. Missouri and Iowa are two prominent states that are planning the reduction, while other states like Wyoming and Idaho are also planning a similar reduction.
So what exactly is being shortened? The specific reduction in these states will relate to the $300 federal payment that applies to all unemployment benefits through September, in accordance with the $1.9 trillion stimulus package that is commonly recognized as the ‘American Rescue Plan’.
States are allowed to withdraw themselves from outputting these unemployment benefits due to specific conditions that have been included within the legislation. It’s worth noting that expanded unemployment benefits will also be shortened, which includes compensation for unemployed freelancers and gig workers. Any state that decides to follow through and shorten the amount of time that their citizens can stay on benefits will likely see a spike in their workforce and an improvement in their employment numbers.
There’s been discussions that the amount of money that is being provided through federal unemployment is preventing some people from searching for work, simply because they are making the same, if not more money, for sitting at home and collecting benefits. This is especially true in states with smaller populations, particularly because the cost of living is lower and therefore the $300 per week expansion to unemployment is much more significant than it would be in a place like California, New York, or Florida.
Figuring out which states will follow through on this will probably be challenging. A lot of it is going to depend on unemployment numbers from each state, as well as the amount of people that are currently collecting benefits compared to the number of job openings that are available in each state.
There will likely be several more states that join in on this effort to reduce the length of the unemployment benefits in the near future. It’s more likely that Republican states will stop offering jobless benefits because Republicans didn’t exactly have the opportunity to have a say in the $1.9 trillion package that offered them in the first place.