We’ve come a long way from the pandemic’s rock-bottom. The national unemployment rate has sunk to 5.8%, down from a peak of 14.8% last April.
And new data shows Americans are returning to work more rapidly in states that have chipped away at unemployment benefits.
The Top-Up Is Going Out Of Style
Last year, the federal government agreed to supplement unemployment benefits, which are doled out by states, by $300 a week for up to 18 months. Although the benefit bump runs until September, states are welcome to opt out early.
And almost half of them — like Ohio, Texas, Missouri, Georgia, and New Hampshire — have already moved to do so. Supporters of the move say removing the federal top-up will encourage more people to get back to work, especially as the labor shortage has pushed wages skywards:
- The number of people receiving unemployment benefits fell almost 14% from mid-May to mid-June in states that announced extended federal benefits would end this month, according to Jefferies.
- In states offering the extended unemployment benefits until September, there has been just a 5.7% decrease in the number of people on unemployment benefits.
Those against cutting benefits early say many workers are still impacted by a lack of child care access, and that many current job openings are in lower-paid service roles as the global computer chip shortage has stunted growth in more lucrative fields.
Frustrated Youth: While the pandemic took the biggest medical toll on older Americans, it’s young adults who suffered the greatest financial repercussions. One fifth of U.S. adults 20 to 24 didn’t work or go to school in the first quarter of 2021 — a 24% increase from last year. And last month, for the first time in history, the 20-24 age group reported a higher jobless rate than teenagers — a group they’re competing with for low-paying service jobs.
Vox Populi: A slim majority, 52%, of Americans polled by Momentive and the New York Times, said the $300 a week booster to unemployment should end immediately. Only 30% said it should continue until September.