States Have Varied Responses to Unemployment Benefits | Citizens Against Government Waste

States Have Varied Responses to Unemployment Benefits

The WasteWatcher

The Pandemic Unemployment Assistance (PUA), which was created under the CARES Act, was meant to provide temporary assistance for individuals who found themselves out of work as a result of the COVID-19 pandemic and the resulting economic shutdown.  It helped those who found themselves on unemployment through no fault of their own. PUA legislation provided an additional $600 weekly stipend to any state unemployment compensation an individual might be eligible to receive, and some states provided additional relief to those who found themselves on the unemployment line due to the COVID-19 pandemic.

On July 31, the Coronavirus Aid, Relief, and Economic Security (CARES) Act’s $600 weekly PUA benefits came to an end.  However, nearly 68 percent of workers made more on the unemployment benefits than their regular weekly income from performing their regular jobs prior to its expiration.

Ryan Guina, a contributor toForbes, offered several reasons for someone to return to work even if they receive more on unemployment insurance compensation.  The increased compensation was limited in duration by Congress, so everyone knew that the additional benefits would have to end at some point. As businesses continue to reopen after being closed to stop the spread of COVID-19, more individuals have been returning to work.  However, even with businesses reopening, 31.3 million Americans were still receiving the increased unemployment checks in mid-July.

After Congressional Democrats pushed the $3 trillion HEROES Act, which passed the House in March, and the Senate suggested its $1 trillion alternative, no agreement was reached to extend the unemployment benefits or several other provisions on which there was at least some agreement.  On August 8, 2020, President Trump signed an Executive Order (EO) to provide $300 in a federal subsidy with an option for states to add $100 more on top of their normal unemployment insurance.  States are responding in different ways to provide for those who remain unemployed.

In California, more than 8.7 million people have filed for unemployment.  In order to continue the additional payments, the state plans to use its federal COVID-19 funding.  Governor Gavin Newsom (D) was been waiting for Congress to act in order to provide more financial assistance.  He criticized President Trump by saying that the state will not be able to provide funding for the $400 in additional unemployment benefits.  California currently has a $54.3 billion deficit.

Arizona Governor Doug Ducey (R) plans to provide the nearly 400,000 unemployed residents in the state of Arizona who are eligible to receive unemployment benefits of $540 a week, with $300 from the federal government and $240 from the state each week they remain out of work until December 6, 2020.  Gov. Ducey has decided to not contribute the additional $100 for the $400 in federal funding and stated that “payments will be made retroactively for each week after July 26 where additional federal payments lapsed.”  The state has a $1 billion rainy day fund, and $600 million in existing unemployment funds. 

The state of South Dakota did not shut down during the coronavirus pandemic, and nearly 80 percent of the job losses in the state have been recovered.  As workers in South Dakota continue to rejoin the workforce, Governor Kristi Noem (R) has refused unemployment aid from the White House. 

The state of West Virginia started fiscal year (FY) 2021 with a $243.9 million surplus after finishing FY 2020 with a $28 million surplus. It was estimated that the state would have a $500 million fiscal hole.  The state received $1.25 billion in CARES Act funds and used $607, or 48.6 percent Governor Jim Justice (R) plans to implement President Trump’s unemployment benefits executive order.

Unemployment benefits are always meant to be temporary, even during a pandemic.  If a state finds that enough of its citizens are returning to work, the state should be able to reject additional federal assistance for unemployment.  The COVID-19 PUC compensation should not be unreasonably extended or extended without a sunset date.  While the new funding is less than the original $600 from the CARES Act, people should still be encouraged to return to or find work.