What are the consequences of the end of unemployment benefits according to May data?

On March 12, the American Rescue Plan, an economic relief package that includes, among other measures, a extension of federal subsidy to pandemic unemployment. This support consists of a $ 300 extra weekly pay for recipients of state unemployment benefits.

Thanks to the extension of these benefits, which will be delivered until September 6, 2021, millions of Americans have received extra income to cope with the crisis caused by the coronavirus pandemic. However, some states will stop providing this support.

According to the authorities of those states, increased unemployment assistance contributes to labor shortages, So they hope that by withdrawing benefits, unemployment will decrease, but what are really the consequences of withdrawing support?

What are the consequences of the end of unemployment benefits?

For now, It is difficult to determine the effect or consequences of the end of unemployment benefits, since not enough time has passed to adequately measure the unemployment rate in the states that withdrew the payments. After a couple of months it will be known for sure whether the measures taken by the authorities achieved the goal of combating the labor shortage.

At the moment, in states such as Alabama, Idaho, Indiana, Nebraska, New Hampshire, North Dakota, West Virginia and Wyoming, which ended the benefits on June 19, job search decreased by 1%, according to the Indeed portal.

In addition, job searches are about 4% below the national average in Alaska, Iowa, Mississippi and Missouri, where federal benefits were withdrawn on June 12.

On the other hand, a recent article in The Wall Street Journal indicated that In several states where support was withdrawn, the unemployment rate has fallen below the national average.

Which states will end the payments?

During June, 21 states of the American Union have withdrawn support: Alaska, Iowa, Mississippi, Missouri, Alabama, Idaho, Indiana, Nebraska, New Hampshire, North Dakota, West Virginia, Wyoming, Arkansas, Florida, Georgia, Ohio, Oklahoma, South Dakota, Texas, Utah y Montana.

Soon, the benefits will end in: South Carolina (June 30), Maryland and Tennessee (July 3), Arizona (July 10) and Louisiana (July 31).

Which states will still keep the $ 300 unemployment benefit payments?

For now, Michigan, North Carolina y Wisconsin they have legislation pending the signature of their respective governors to end the payments. On Kansas and New MexicoLegislators have asked Governors Laura Kelley and Michelle Grisham to end weekly payments, but it has yet to pass.

The states that will continue with the payment of $ 300 until September 6, 2021 are: California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Maine, Massachusetts, Minnesota, Nevada, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia y Washington.