Unemployment checks are shrinking fast in nearly half of US states

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Fed up with generous US unemployment perks that critics say are impossible to effectively oversee for abuses, a fast-growing number of states are turning them down altogether.

Some 21 Republican governors are now looking to force workers back into the labor market by withdrawing from the federal program that provides an extra $300 in additional unemployment benefits every week, noting that it adds up to more than many employers can pay for entry-level jobs.

Last week, Arizona announced it would stop distributing the US supplement on July 10, instead offering a $2,000 bonus for those who return to work. States including Montana, Oklahoma and Connecticut are dangling similar cash incentives as they prepare to wean residents from the federal funds, which some economists say are threatening to slow down the US recovery.

“Although more people are ready to work today in Arizona than before the pandemic, many businesses are struggling to fill vital positions,” Arizona Gov. Doug Ducey said. “We cannot let unemployment benefits be a barrier to getting people back to work.”

Last week, Republican lawmakers in Washington led by House Minority Leader Kevin McCarthy piled on, claiming the handouts are a major cause of the worker shortage as people draw checks while pretending to pound the pavement. White House officials countered that US companies should pay workers more to compete with the handout after getting stimulus funds themselves.

Last week, the Labor Department said US job openings soared to a record 8.1 million in March while companies struggled to recruit new workers and the economy continued to heat up. That was just days after the agency said the US economy added a paltry 266,000 jobs, sorely short of the 1 million that had been expected by economists.

In response, President Biden last week defended the federal perks, even as he admitted there was a problem.

Nobody should be able to “game the system,” Biden said, adding, “If you’re receiving unemployment benefits and you’re offered a suitable job, you can’t refuse that job and just keep getting the unemployment benefits … We’ll insist that the law is followed with respect to benefits.”

He neglected to mention, however, that state governments are responsible for disbursing jobless benefits and ensuring that no one bilks the system. It’s largely an honor system, experts add, that relies on workers to self-report that they are actively looking for work.

Making matters worse, the latter requirement was lifted during the pandemic for states taking federal funds.

State agencies “don’t have the resources to confirm what filers are telling them,” said labor attorney Carolyn Richmond of Fox Rothschild.

By June and July, millions of workers across Alaska, Alabama, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Mississippi, Missouri, Montana, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia and Wyoming will see their unemployment checks drastically reduced as their states nix Pandemic Unemployment Assistance program. The checks will keep flowing to participating states through Sept. 6.

At least four states are paying residents one-time bonuses to accept jobs. Arizonians stand to get $1,000 for part time jobs and $2,000 for full time jobs after they complete 10 weeks of work while Montanans are eligible for $1,200 after they work in a full-time position for four weeks.

Oklahoma is offering the first 20,000 people who qualify $1,200 after completing six weeks of a new job and Connecticut is offering $1,000 for completing eight weeks of full time work, but it’s not opting out of the federal unemployment benefits.

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