COVID & Unemployment

States that dropped $300 weekly unemployment benefits didn’t see hiring boost

Amanda Peacher Jul 28, 2021
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Hiring was roughly the same in states that cut unemployment benefits early as it was in states that did not, a new study found. Olivier Douliery/AFP via Getty Images
COVID & Unemployment

States that dropped $300 weekly unemployment benefits didn’t see hiring boost

Amanda Peacher Jul 28, 2021
Heard on:
Hiring was roughly the same in states that cut unemployment benefits early as it was in states that did not, a new study found. Olivier Douliery/AFP via Getty Images
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When 26 states opted to put an end to extra unemployment benefits, there was a common thought process behind it: take away the extra support and that’ll prod workers to jump back into the labor pool.

As it turns out, that is not so. Fresh data from the payroll and benefits platform Gusto shows that states that got rid of extra unemployment benefits did not experience a “hiring boom” as a result.

Gusto economist Luke Pardue has this takeaway from his new hiring analysis: “If we want a speedy recovery, ending unemployment insurance is not the silver bullet.”

Hiring in states that ended those extra weekly benefits was about the same as in other states.

“What that’s telling us is that there are so many other things happening in the labor force that are keeping workers out,” Pardue said.

Those things include lack of child care or concerns about the delta variant.

Karen Streicher, co-owner of Casanova Pizzeria in Boise, Idaho, said she needs kitchen and front house staff.

“We get people applying or calling, seeming to be interested. But then many of them will not show up,” Streicher said.

Streicher’s not sure why. Idaho is one of the states that ended extra unemployment benefits, but it also has low vaccination rates.

Pardue said that’s also a factor. “All of the increase in employment is driven by these states with higher vaccination rates,” he said.

So, COVID safety seems to be a bigger incentive than the loss of $300 a week, he said.

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