With millions of Americans still unemployed and getting enhanced unemployment benefits, there’s been a lot of debate on whether the extended federally funded extra unemployment benefits ($300 FPUC, PUA and PEUC) are helping or hurting the post pandemic economic recovery. The argument is that the extra unemployment benefits, and the $300 extra weekly payment in particular, are incentivizing workers to stay at home and collect money for free (often more than they could get working) versus finding a job. This has been compounded by many business owners saying they are unable to fully reopen due to the shortage of workers to fill open vacancies.
Many state governors (mainly Republican) have already advised their state UI agencies to cancel these extended programs in their state (see full list) many weeks ahead of the September 6th, 2021 end date. To further encourage workers to find a job many states are also reinstituting the need to be available for work to get basic traditional state UI benefits, which was initially waived due to the COVID crisis and associated unemployment provisions.
But the biggest incentive or stimulus states are now providing is a back-to-work bonus to encourage people to start looking for work. The following states have implemented or have announced plans to provide extra payments in 2021, assuming certain job and working hour criteria are met.
State Return to Work Stimulus Programs (2021 to 2022)
(Click state link for details)
|Additional Return to Work Stimulus Payments|
|Arizona||$2,000 payment (after 320 hours of work) and $1,000 to those who obtain part-time employment and work at least 160 hours|
|California||Golden State Stimulus payment of $600 or $1200. Expanding to provide another $600 payment to middle-class families that make up to $75,000, will provide $600 direct payments for adults and $500 for dependents. (see more)|
|Colorado||$1,600 payments for unemployed people who transitioned into full-time work in May and $1,200 for those returning in June (contingent on eight weeks of employment)|
|Connecticut||$1,000 payment to the first 10,000 long-term unemployed people who return to work in 2021 for at least eight consecutive weeks|
|District of Columbia|
|Massachusetts||1,200 "sign-on bonuses," payable in three increments spread out over a full year.|
|Montana||$1200 return to work bonus with early end of federal unemployment benefits|
|New Hampshire||One-time employment bonus of $1,000|
|New York||Proposal for $1200 bonus for returning to work.|
|North Carolina||$1200 return to work bonus with early end of federal unemployment benefits. Still in proposal stage|
|Oklahoma||$1200 return to work bonus for up to 20,000 eligible workers who are currently receiving PUA, PEUC, or UI from May 2 through May 15 and when they complete 6 weeks of continued employment of 32 hours of week or more with the same employer|
Many who support extending current and enhanced unemployment benefits argue that back-to-work bonus’ won’t help because high qualify jobs are simply not available – just the low end minimum wage kind. And by removing these benefits many unemployed Americans would go back to living below the poverty line and be unable to pay bills rent and meet basic living needs. This would subsequently have a detrimental impact to state and local economies.
Those who argue against extending enhanced unemployment benefits and instead prefer a back-to-work bonus say that a true recovery can never really start unless people are encouraged to go back to work and not rely on state or federally funded subsidies.
Not surprisingly the debate is divided along political party lines. Some states had already forging ahead with programs to encourage workers back to work. Idaho has already instituted a scheme to pay jobless residents a one time $1,500 payment to lure them back to work and off unemployment benefits. The state is directing $100 million from the $1.25 billion it received in federal CARES program that could benefit up to 70,000 residents.
So while debates will rage at the federal level on extending enhanced UI benefits versus promoting return-to-work programs, my bet is many states struggling with managing and paying unemployment claims (e.g. Florida, Ohio, Georgia) will focus on redirecting federal funds to encourage workers to return to work.