Missouri and Tennessee are the newest states to join the growing number of states ending federal pandemic-related unemployment benefits, arguing workers were disincentivized to rejoin the workforce.
Republican Missouri Gov. Mike Parson announced Tuesday the state would end participation in the program beginning June 12.
“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,” Parson said. “It’s time we end these programs that have ultimately incentivized people to stay out of the workforce.”
While federal unemployment benefits provided necessary financial assistance during the height of COVID-19, they were intended to be temporary.
It’s time that we end these programs that have incentivized people to stay out of the workforce.
— Governor Mike Parson (@GovParsonMO) May 12, 2021
“Across every industry, businesses cannot compete against federal largesse. Our economy is built upon an active and vibrant workforce, and we should be cultivating job-creation and unemployment rather than inhibiting them,” Lt. Gov. Mike Kehoe of Missouri said. “The jobs exist and the demand exists.”
Republican Tennessee Gov. Bill Lee also made the announcement Tuesday. It will go into effect on July 3.
“We will no longer participate in federal pandemic unemployment programs because Tennesseans have access to more than 250,000 jobs in our state,” Lee said. “Families, businesses and our economy thrive when we focus on meaningful employment and move on from short-term, federal fixes.”
We will no longer participate in federal pandemic unemployment programs because Tennesseans have access to more than 250,000 jobs in our state. Families, businesses & our economy thrive when we focus on meaningful employment & move on from short-term, federal fixes.
— Gov. Bill Lee (@GovBillLee) May 11, 2021
Tennesseans have been required to complete three weekly job searches since October in order to remain eligible for the benefits, Lee’s office said.
Alabama, Arkansas, Mississippi, Montana and South Carolina have all also announced they would no longer be offering the additional $300 bonus.
As part of Biden’s $1.9 trillion relief package, the benefits were extended.
Republicans have blamed April’s jobs report – which saw the economy add just 266,000 jobs– on the federal unemployment bonus. (RELATED: ‘Magic Fairy Dust’: Florida Restaurant Owner Says People Started Applying As Soon As Gov. DeSantis Nixed Unemployment Waivers For Job Search)
“The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market,” U.S. Chamber of Commerce Chief Policy Officer Neil Bradley said in a statement Friday. “One step policymakers should take now is ending the $300 weekly supplemental unemployment benefit.”
Bradley said he estimates that about 25% of unemployment recipients are earning more than they did while working.
The National Federation of Independent Business released a report Thursday that found approximately 60% of small business owners were trying to hire workers and 40% were struggling to fill openings.
President Joe Biden denied accusations from Republicans that federal unemployment benefits were disincentivizing workers.
“I never said, and no serious analyst ever suggested, that climbing out of the deep, deep hole our economy was in would be simple, easy, immediate or perfectly steady,” the president said Tuesday.
“I know there’s been a lot of discussion since Friday’s report that people are being paid to stay home rather than go to work,” Biden said. “Well, we don’t see much evidence of that.”