By Casey Harper (The Central Square)
The increase in federal benefits last year perpetuated unemployment and prevented millions of Americans from returning to the workforce, reports a new study released Wednesday.
The Public Policy Foundation of Texas published The report, which evaluated the impact of federal subsidies, in particular the controversial federal unemployment payments of $300 per week. More than two dozen states opted out of the federal program before it expired last year, citing high unemployment, while blue states largely continued to receive the federal money.
The report found that “3 million more people remained unemployed in states that maintained increased benefits compared to states that ended the program early.”
“The bottom line is not just that some states improved their employment numbers and others didn’t,” said report author EJ Antoni. “It is that extending unemployment benefits had a significant negative impact on the ability of communities to recover from the pandemic. Lives and livelihoods were put on hold for a much longer period than necessary as a result of this misguided policy.”
Weekly unemployment payments wouldn’t be enough for many Americans to live on, but when combined with state unemployment, stimulus checks and a variety of other state and federal programs, they were enough to make staying home more attractive than coming back. to work for millions. of Americans, according to the study.
“Even with higher incomes, fringe benefits, along with other government programs and payments, provided the equivalent of $100,000 in annual income for a family of four in 19 states and the District of Columbia,” Antoni said.
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Federal jobless payments ended in September of last year, but many states left months earlier. The report adds that states that turned down federal funding saw their job numbers increase by more than 2 million.
Antoni said the federal programs “created a significant disincentive for many people to return to work or even continue working at an existing job.”
Critics of the program also point to the rampant fraud and abuse that occurred while billions of dollars in federal funds were being delivered. A Government Accountability Office report found that in the first year of the pandemic alone, from April 2020 to March 2021, states and territories overpaid unemployment benefits by $12.9 billion in taxpayer dollars.
Congress gave the Department of Labor $2 billion to prevent waste and fraud, but it did not stop the rampant waste uncovered by the government watchdog report.
“The American Bailout Act of 2021, signed into law on March 11, 2021, subsequently awarded the DOL $2 billion to detect and prevent fraud, promote equal access, and ensure timely payment of unemployment insurance benefits.” says the report. “As of May 20, 2021, DOL officials said that the DOL was working to develop detailed plans for this $2 billion in coordination with the Office of Management and Budget, noting that developing spending plans in 53 states and territories involves complex considerations.
Distributed with permission from The Center Square.