It Worked! States Ending Federal Unemployment See Claims Fall By Up to 32%

Time to suit up. Federal Unemployment Insurance Expires September 6, 2021

If you needed data to prove what common sense already told you, the data is in. Of the four states to officially end unemployment insurance on June 12, all of them saw unemployment claims fall the following week.

Mississippi topped the list with a 32% reduction in weekly unemployment claims. Iowa, Missouri, and Alaska also ended federal UI on June 12 and saw initial unemployment claims fall 30%, 25%, and 7%, the very next week, according to DOL data.

All of these states were already seeing upticks in employment in the weeks leading up to their states dropping the $300 a week federal unemployment insurance, proving what governors have been saying for months: people would rather work than live on the dole.

“From conversations with business owners across the state, we know that they are struggling not because of COVID-19 but because of labor shortages resulting from these excessive federal unemployment programs,” Missouri Gov. Governor Parson said

“While these benefits provided supplementary financial assistance during the height of COVID-19, they were intended to be temporary, and their continuation has instead worsened the workforce issues we are facing. It’s time that we end these programs that have ultimately incentivized people to stay out of the workforce.”

“The purpose of unemployment benefits is to temporarily assist Mississippians who are unemployed through no fault of their own,” Mississippi Gov. Tate Reeves said

“After many conversations over the last several weeks with Mississippi small business owners and their employees, it has become clear that the Pandemic Unemployment Assistance (PUA) and other like programs passed by the Congress may have been necessary in May of last year but are no longer so in May of this year.”

Keen readers will notice that nobody is laying blame on the unemployed for losing their jobs. Nobody is saying unemployment isn’t an often necessary tool to help people get back on their feet. And nobody is saying that high-skilled workers who refuse a minimum wage job are bums. 

They’re saying that federal unemployment insurance was a temporary aid intended to offset job losses caused by the Coronavirus pandemic, and now that their states are full re-opened, federal UI is no longer necessary.

Iowa and Alaska lifted COVID restrictions in February 2021. Mississippi lifted its last restrictions in late April. And Missouri opened in early May.

While lockdowns, operation capacity, and mask mandates varied by state, those with the strictest policies saw the worst economic effects. This comes at a price, and no reasonable person should claim otherwise. 

It will take years for some states to recover economically from COVID’s effects, and that means workers may be competing for fewer jobs than there were pre-pandemic. For states that watched as businesses closed indefinitely, the burden of providing for their workers is their burden. Which is why citizens are still eligible to apply for state unemployment benefits.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act gave states “the option” of providing workers extended unemployment compensation. Federal unemployment assistance was not mandated by law, and neither did the federal government require extended lockdowns under a national COVID policy.

For states that didn’t destroy their economies with harsh COVID policies, it’s not the federal government’s job (funded by taxpayers) to continue providing federal assistance.

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