21 States Cancel $300/Week Unemployment Benefits

I trust everyone reading this has heard by now that 21 state governors – all Republican – have set plans in motion to stop participating in the federal government’s supplemental unemployment benefits program, which provides an extra $300 a week to the jobless. The benefit cutoffs in most of these states will go into effect in June or early July.

The Republican governors and other officials claim the payments disincentivize workers to get back on the job. Most liberals, who never met a government handout they didn’t like, say workers are not returning to their jobs because: 1) they’re afraid of getting COVID 19, 2) they don’t have adequate childcare yet, 3) they’re caring for an elderly loved one at home, etc., etc.

Liberals also complain, perhaps rightly so, that eliminating the $300/wk. benefit negatively impacts traditionally lower-income households. In other words, liberals maintain that the reason more Americans remain on unemployment is NOT because they are making more money staying home than going back to their jobs.

The Republican governors who are dropping the $300/wk. benefit strongly disagree. They say small and medium-sized businesses in their states are struggling mightily to find enough workers to staff back up to full capacity. So, which is it? Let’s look at some numbers.

First, the average American on unemployment receives $387 per week from their state, according to the Center on Budget and Policy Priorities. With the boost of $300 from the federal government, this number rises to $687 per week.

Based on a 40-hour workweek, this means the average unemployed American is getting the equivalent of $17.17 an hour. This is clearly more than the $15 per hour the progressives want, more than the average hourly earnings of around $11.50 over the last year (see chart below), and more than twice the federal minimum wage of $7.25.

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