The Foundation for Government Accountability Responds to Boosted Unemployment Benefits that are Impeding Economic Recovery

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The $300 weekly UI bonus is continuing to drive unemployment and make it more difficult for employers to find workers. With 7.4 million open jobs, the problem is that businesses can’t get people to go work.

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“Businesses need workers and employers are still competing with the government backed unemployment checks,” said Sam Adolphsen, Policy Director. “The unemployment program is supposed to help people get back to work – instead it’s creating unemployment by paying people not to work.”

Last week the Bureau of Labor Statistics (BLS) reported an increased unemployment rate of 6.1%. The Foundation for Government Accountability (FGA) issues the following response:

It is vital that federal lawmakers take steps to end boosted unemployment insurance (UI) benefits in order to fast-track the economic recovery. Ending the unemployment boost would fuel a desperately needed American recovery, encourage individuals to reenter the workforce, and aid small businesses desperate for workers.

The $300 weekly UI bonus is continuing to drive unemployment and make it more difficult for employers to find workers. The median duration of unemployment continued to increase, while 200,000 fewer workers outside the labor force actually want a job compared to the previous month’s report. This is a key sign that these workers are content remaining on unemployment. In fact, 3.3 million fewer Americans want a job today compared to the same time a year ago.

Due to Congress extending an additional $300 per week cash benefit through September, unemployment and other cash benefits are now equivalent to a more than $44,000 annual salary for a family of three.

“With 7.4 million open jobs, the problem is that businesses can’t get people to go work. That’s what happens when you pay people to stay home,” said Joe Horvath, Senior Fellow. “Biden and Congress have made a huge mistake by giving out big bonuses for not working. Businesses don’t create new jobs when they can’t fill the open positions they already have.”

States with the biggest rise in unemployment from week to week are generally states with the strictest lockdown policies. In fact, some of the largest increases in initial weekly UI claims have been reported from perpetual shutdown states like Illinois, California, and New York, while Republican-led states like South Dakota, Iowa, and Nebraska have seen state unemployment rates drop to pre-pandemic levels. Recently, Governor Henry McMaster rightly directed South Dakota’s unemployment agency to end participation in federal, pandemic-related unemployment benefit programs.

“Now is the time to promote employment and reject government dependency. Congress and the states must continue to pursue solutions designed to help move Americans off the sidelines and back into the economy,” said Tarren Bragdon, President and CEO.

“Businesses need workers and employers are still competing with the government backed unemployment checks,” said Sam Adolphsen, Policy Director. “The unemployment program is supposed to help people get back to work – instead it’s creating unemployment by paying people not to work.”

The Foundation for Government Accountability (FGA) is a non-profit, multi-state think tank that specializes in health care, welfare, work, and election reform. To learn more, visit TheFGA.org

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