Republican governors are increasingly rejecting the supercharged federal unemployment benefits in the $1.9 trillion coronavirus relief package, saying the additional cash is discouraging potential workers from seeking employment as the economy reopens.
Texas Gov. Greg Abbott is among the latest to announce that his state is opting out of the boosted benefits — a change that will take effect at the end of June.
Mr. Abbott said the current number of job openings in his state is almost identical to the number of residents who are receiving unemployment benefits.
“That assessment does not include the voluminous jobs that typically are not listed, like construction and restaurant jobs,” Mr. Abbott said this week. “In fact, there are nearly 60% more jobs open (and listed) in Texas today than there was in February 2020, the month before the pandemic hit Texas.”
Indiana Gov. Eric Holcomb and Oklahoma Gov. Kevin Stitt made similar announcements this week.
At least 21 states have announced plans to opt out. Montana Gov. Greg Gianforte was the first governor to make such an announcement this month.
The relief package Congress passed in March extends into September a $300-per-week boost to people’s regular state unemployment benefits.
Republican lawmakers have floated alternatives, such as “return-to-work bonuses,” that are intended to incentivize people to take jobs instead of relying on unemployment.
Mr. Stitt’s office said this week that the first 20,000 residents in his state who were on unemployment in the first half of May and who return to the workforce will receive $1,200 from the federal relief package.
Mr. Gianforte’s office had said Montana would offer $1,200 payments to individuals on unemployment who accept a job and remain employed for at least a month.
Arizona Gov. Doug Ducey said his state plans to set aside $300 million in federal funds to offer one-time back to work bonuses of up to $2,000 for eligible residents.
On Capitol Hill, Republicans have been pushing for similar plans.
“We’ve been warning about this predictable crisis for a year now: Americans want to work, but the federal government is paying more for unemployment than for work,” said Sen. Ben Sasse, Nebraska Republican. “Well-meaning but stupidly designed policy is holding Main Street back.”
Mr. Sasse announced legislation last week that would convert the boosted unemployment benefits into a signing bonus worth 101% of what people would receive by taking the federal dollars.
Mr. Gianforte’s office said Montana would offer $1,200 payments to individuals on unemployment who accept a job and remain employed for at least a month.
Republicans also have raised concerns about reports of at least $60 billion worth of improper unemployment benefit payments since March 2020, when lawmakers approved a $600-per-week boost.
“Unchecked unemployment fraud is delaying legitimate payments, diverting funds away from unemployed workers, and turning thousands of Americans into unwitting identity theft victims,” said Rep. Jackie Walorski, Indiana Republican.
The push comes after the U.S. experienced slower-than-expected job growth in April. The economy added just 266,000 jobs last month, well below expectations.
The White House has downplayed the potential effects the enhanced benefits have had on discouraging people from seeking work.
“Available data suggest that the biggest barrier to workers coming back is still COVID-19,” Brian Deese and Cecilia Rouse, two of President Biden’s top economic advisers, said in a memo to senior staff Tuesday.
“As we get the majority of working age adults fully vaccinated, we anticipate companies that provide fair wages and safe work environments will find Americans eager to work,” they said. “In some cases, employers will raise wages to attract workers. This is a positive development, particularly for lower wage workers who have seen little wage growth over the past decades.”
Mr. Biden delivered a similar message earlier this month.
“People will come back to work if they’re paid a decent wage,” the president said.
Bank of America announced Tuesday it will boost its hourly minimum wage for U.S. employees to $25 per hour by 2025.
Chipotle said last week that the restaurant chain will offer an average hourly wage of $15 and employee referral bonuses by the end of June.
As part of Mr. Biden’s $1.8 trillion “American Families Plan,” the White House says the president wants to work with Congress to automatically tie unemployment benefits to economic conditions, an idea that has strong support among liberals on Capitol Hill.
Senate Budget Committee Chairman Bernard Sanders of Vermont petitioned Labor Secretary Marty Walsh last week to keep the enhanced benefits flowing.
“Allowing state governors to cut this assistance off will guarantee jobless Americans plunge into poverty,” Mr. Sanders said in a letter to Mr. Walsh. “As secretary, you are obligated to ensure this aid gets to workers.”