South Carolina, Montana declining federal unemployment funds a huge mistake, economists say

South Carolina, Montana declining federal unemployment funds a huge mistake, economists say

South Carolina and Montana residents will be deprived of federal epidemic unemployment benefits next month, and Republican governors in each state will claim the payments have caused a jobs crisis. Economists say it is not.

Heidi Shearholz, a senior economist and policy director at the Institute for Economic Policy, said in an interview that employers are simply frustrated that they can’t find relatively low-wage workers. Posted jobs are more stressful, riskier, and harder work than before Kavid. … you should be ordered to pay more when work is most stressful.

Both states will be the first to participate in the unemployment rate program, as both states seek to return to epidemic unemployment insurance eligibility and benefits by the end of June.

I just deeply hope that you don’t see any more states following this path because it is a huge mistake.

Unemployed beneficiaries will lose an additional 300 300 per week and temporary workers and contractors will lose their access to the unemployment assistance program due to the epidemic. As of March, 120,783 South Carolinians were still looking for work, according to the state Department of Employment and Workforce. In Montana, about 25,000 people filed unemployment claims, according to the state Department of Labor. There are approximately 9.8 million unemployed workers in the United States.

In many cases, these payments are higher than the workers’ previous wages, South Carolina Governor Henry McMaster said in a statement. What was intended as short-term financial assistance for the weak and displaced during the height of the epidemic has been transformed into a dangerous federal right.

In July 2020, a study by the National Bureau of Economic Research found that two-thirds of workers were deprived of more unemployment than their average salary.

Governor of Montana. Greg Gianfort further announced that the return of pre-epidemic benefits is part of the acute labor shortage and that the new measures will encourage Montanans.

However, according to the US Department of Labor, the number of Americans filing jobless claims in the week of May 1 dropped to an epidemic of 498,000. And more than 900,000 jobs were added to the job market in March.

At a press conference on Friday, President Joe Biden responded to the latest employment report by saying that only 266,000 jobs were added to the economy in April, compared to the forecast of close to a million.

You will be disappointed, Biden said, “but after passing the US Rescue Plan, I want to remind everyone that it was created for us in one year, not 60 days a year,” Biden said.

Shearerholz told ABC News that after the $ 600 unemployment bonus expired at the end of July, he should have seen a jolt towards employment and he doesn’t see it in the data, it just indicates that it didn’t actually cause the job. offer effect. It’s hard to imagine that something half as big is having an impact now.

However, a report from the Economic Policy Institute found that the main reason some employers don’t attract workers is that many of these companies pay very low wages. According to the report, the real labor deficit will increase wages and competition among workers. But wages are not increasing, at least not fast enough.

William E. Spriggs, an economist and professor at Howard University, told ABC News that there was no evidence to show that unemployment checks prevented Americans from returning to work.

There is no shortage of jobs for staff. There is a wage shortfall, Sprigs said, adding that research has shown that many employers want to pay rotten wages and want rotten hours.

Gianfort said that people who rejoin the workforce and keep their jobs for at least a month will receive a £ 1,200 back-to-work bonus. McMaster did not mention the bonus in his ad. Federal funding for the Back to Work program is part of the 9 1.9 trillion US Bailout Plan

Experts told ABC News that refusal to accept federal money would have a profound effect on the livelihoods of residents and their families and would likely worsen the state’s overall economy.

Shearer Holz said states will only make this prediction and allow all money outside of their economies to be cut off. I just deeply hope they don’t see any more statuses by following.

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