BOISE — Idahoans next month will no longer receive the additional federal unemployment benefits that helped tens of thousands of people who lost work as a result of the coronavirus pandemic.
Gov. Brad Little announced Tuesday, that starting June 19, he will end the state's participation in three federally funded pandemic unemployment compensation programs, including one that provides an additional $300 per week to state unemployment benefits. The withdrawal will come about 11 weeks prior to the date Congress scheduled the benefits to expire.
Little suggested the benefits are the cause of recent worker shortages across various Idaho industries.
“Employers are telling me one of the big reasons they cannot recruit and retain some workers is because those employees are receiving more on unemployment than they would while working," Little said in a news release. "We see ‘Help Wanted’ signs everywhere. Idaho has the strongest economy in the nation, and we are a top 10 state for best employment, but there is more we can do. It’s time to get back to work."
Little continued, "My decision is based on a fundamental conservative principle — we do not want people on unemployment. We want people working. A strong economy cannot exist without workers returning to a job.”
In March — the most recent available data — the state's seasonally adjusted unemployment rate was 3.2%, nearly 29,000 people, compared to the 6% national rate for that month, according to the Idaho Department of Labor and U.S. Bureau of Labor Statistics.
The American Rescue Plan, signed into law in March, allows for $300 per week in additional unemployment benefits through September. Little joins Republican governors in Alabama, Mississippi, Montana, South Carolina and Arkansas in opting out of the programs, CBS News reported.
The Idaho Press last month reported employers in the Treasure Valley, in various industries, from food and beverage to manufacturing to ride-hailing companies, are seeing a shortage of available and skilled workers. Some business owners, along with Republican lawmakers, argue the expanded benefits are a disincentive to working.
Little last year launched a return-to-work bonus program, funded by federal coronavirus relief money, which provided $750 to $1,500 payments to workers if they chose to forgo unemployment benefits and return to work. Idaho has provided more than $36.5 million in back-to-work bonuses to employees at businesses operating in Idaho — the state allocated $100 million in coronavirus relief funds for the program. Idaho’s U.S. Sens. Mike Crapo and Jim Risch last month proposed their own federal back-to-work bonus legislation, modeled on Idaho’s program and designed to “counteract” unemployment benefits.
The claim that enhanced unemployment benefits are leading to worker shortages has been disputed. A 2020 study by Yale University, for example, found no evidence “that more generous benefits disincentivized work either at the onset of the expansion or as firms looked to return to business over time.” Other factors, such as fear of catching the virus at work, low wages compared to other industries or conflicting responsibilities (kids at home, for example), may also be contributing to a decrease in available workers in a particular industry.
Effective June 19, the following federal unemployment programs will end in Idaho:
- Federal Pandemic Unemployment Compensation (FPUC), which provides an additional $300 weekly payment
- Pandemic Unemployment Assistance (PUA), which provides benefits to those who would not usually qualify for unemployment, such as the self-employed and others
- Pandemic Emergency Unemployment Compensation (PEUC), which extends benefits once regular benefits have been exhausted
During the week ending May 1, of the more than 21,000 Idahoans who filed unemployment benefit claims, 4,874 received Pandemic Unemployment Assistance and 6,493 received Pandemic Emergency Unemployment Compensation, according to the labor department. Everyone receiving benefits will be impacted by the elimination of Federal Pandemic Unemployment Compensation, said Department of Labor Policy Coordinator Darlene Carnopis.
The labor department is seeing a steady decline in the number of people receiving unemployment benefits, Carnopis said in an email. By June 19, the number of claimants impacted by the withdrawal from the programs should be less than it is today, Carnopis said.
The Idaho Chamber Alliance, the lobbying arm of the state's chambers of commerce, supported the withdrawal from the programs.
"We feel that this is an important next step to helping businesses recover and we look forward to working with the Governor's Office as we seek ways to improve workforce availability for Idaho’s businesses," said Chip Schwarze, chairman of the Idaho Chamber Alliance, in the news release.
The Idaho Department of Labor last month reinstated the pre-pandemic work search requirements for unemployment insurance claimants, which mandate Idahoans who are out of work and collecting unemployment benefits must look for full-time employment.