Federal Unemployment Supplement to Be Discontinued in Many States

The number one concern for companies as the United States emerges from the COVID-19 pandemic is how to fully staff their organizations. Jobs are being added back into the economy – more than half a million in the new May jobs report. More are ready, but employers are having trouble finding workers and staffing shortages exist nearly everywhere in the United States. Despite staffing shortages, the unemployment figures are still high. Just looking at the numbers, there are enough jobs available to cut the unemployment numbers down nearly 2%. Experts are offering many theories to fix the disconnect.

One potential solution is discontinuing the federal unemployment compensation supplement of $300 per week. This supplement is in addition to any state unemployment compensation that an out-of-work person receives. Many employers and government officials believe that the federal supplement has created a disincentive for people to rejoin the workforce.  It comes as no surprise, then, that many states are discontinuing the federal supplement as a way to encourage people to return to work.

So far, 25 states have announced plans to end the federal supplement, a decision that seems to fall along political lines. All of the states that are discontinuing the supplement are led by Republican governors, with just two states led by Republican governors that have not rejected the supplement: Massachusetts and Vermont. No states with Democratic governors have announced that they are discontinuing the federal supplement. The list of states discontinuing the supplement can be found at the end of this article.

While the supplement is certainly playing a part in the decision about whether a person is returning to work, it is not the only factor that is at play. Consequently, discontinuing the supplement will likely improve the staffing shortage, but will not fully solve it because the pandemic created a monumental shift in the workforce. This crisis, unprecedented in the modern era, caused people to rethink what they wanted to do for their careers and the terms of their employment, including reconsideration of their wages, benefits, location, and flexibility. In addition, women left the workforce in staggering numbers to act as caretakers for children and family members during the lockdown. Older workers who had been considering retirement made that move during the pandemic.

Employers should see some workforce relief in states where the federal supplement is being discontinued, but the companies that are most successful in attracting workers will also examine their compensation and benefits offerings, as well as policies related to employees’ renewed focus on responsibilities outside of work.

States that are discontinuing the federal unemployment supplement are:

1. Alabama
2. Alaska
3. Arizona
4. Arkansas
5. Florida
6. Georgia
7. Idaho
8. Indiana
9. Iowa
10. Maryland
11. Mississippi
12. Missouri
13. Montana
14. Nebraska
15. New Hampshire
16. North Dakota
17. Ohio
18. Oklahoma
19. South Carolina
20. South Dakota
21. Tennessee
22. Texas
23. Utah
24. West Virginia
25. Wyoming

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