Editorâs Note: This article wasÂ originally publishedÂ byÂ Stateline, an initiative of The Pew CharitableÂ Trusts.
Republican governors in at least 22 states are ending federal unemployment assistance. The cuts will hit hard in rural areas and communities of color.
After Lisa Wilkinson, 54, got laid off from her factory job in December 2019, she knew it would be difficult to replace it. Sheâs older and lives in rural Tennessee, where work is scarce.
She immediately began her search, but in March 2020, Covid-19 forced employers to shut their doors.
She applied for state and federal pandemic unemployment and received $300 a week plus back pay in June 2020?â?a lifeline, she said in an interview. Several weeks later, the benefits ran out, and she still couldnât land a job. Then, in the midst of that, Wilkinson, her 79-year-old husband and her 82-year-old mother contracted Covid-19.
Wilkinson recovered, but her husband and mother did not.
âIf youâre not a saver, you lose everything you got. And if you lost a spouse or member in your family?â?last year, this year?â?it makes it worse,â Wilkinson said. ?âYou have anxiety, depression âŚ and thoughts of where your next meal is coming from.â
Wilkinson feared for her health and that of others if she entered the workforce, but she kept applying anyway, she said. To date, she has sought more than 300 jobs. Since January, she has recertified and reapplied for extended benefits at least three times. Her claim is still processing, she said.
Now, sheâs waiting?â?on unemployment benefits or a job, whichever comes first.
âPeople are like, ?âJobs [are] out there, if you need ?âem,ââ she said. ?âBut theyâre not the ones trying to apply for ?âem.â
In at least 22 states, the federal unemployment assistance Wilkinson is fighting to get is being retracted by Republican governors, who plan to end the pandemic-related aid as early as June.
The governors argue that the benefits discourage people from taking jobs. But economists say cutting off federal aid affects peopleâs livelihoods?â?especially for people of color and residents of rural areas saddled with slow job growth, lackluster transportation options and limitedÂ opportunities.
âWe know [communities of color in rural areas] suffer from chronic high unemployment and have been really hurt by the pandemic, so I do think that this is an issue thatâs gonna be hitting different communities harder,â said Andrew Stettner, a senior fellow at The Century Foundation, a left-leaning independent think tank.
âWe saw in the data that African Americans are really taking advantage of these programs,â he said, ?âand theyâre going to be hurt by the revocation of some of these programs. I would say economic distressed communities, writ large, are going to be losing out on a lot of these benefits.â
About 16 million people nationwide would receive a total of $100 billion in benefits if all states continued federal unemployment funds through their set expiration date of Labor Day, Sept. 6, according to an analysis of U.S. Department of Labor data by The Century Foundation. Of the states that planned to pull benefits, almost $11 billion in unemployment benefits could be lost, affecting nearly 2 million workers, the analysis found.
States have never before made this reversal?â?accepting the federal funds, then turning them down?â?Stettner said.
Montana was the first state to announce it would end the program, on May 4, cutting off the benefits June 27. Other states followed suit, including Alaska, Alabama, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Mississippi, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia and Wyoming. All are led by Republican governors.
Focused on Vacancies
Economists told Stateline that the decision to opt out of pandemic unemployment affects the recipients who receive the funds, which in turn reduces the flow of money into local economies.
Some Republican governors are focusing on filling job vacancies.
âEliminating these pandemic programs will not be a silver bullet for employers to find employees, but we currently have about 116,000 available jobs in the state,â said Indiana Gov. Eric Holcomb in a statement.
U.S. Labor Secretary Marty Walsh and President Joe Bidenâs administration will ?âtake concrete action to prevent anyone from falling through the cracks,â a spokesperson from the U.S. Department of Labor said in a statement. The statement doesnât specify whether states are required to continue providing payments, as some advocacy groups have argued the department could force them to do.
Some governors and the U.S. Chamber of Commerce?â?which also called for an end to the $300 weekly extended benefits?â?opposed the extra support because, they said, benefits would disincentivize people to go back to work in industries such as food service and hospitality.
However, there is no evidence that federal pandemic unemployment benefits had a substantial effect on employment after the $600 benefits expired in July 2020, according to a February 2021 study by a researcher with the National Bureau of Economic Research.
More than half of people who received a $600 federal unemployment check returned to work before the supplement expired, found a separate February paper from the University of Chicago Becker Friedman Institute for Economics.
Many lawmakersâ views on the extended benefits fall along partisan lines.
Arkansas Gov. Asa Hutchinson said itâs time for employees to work to bring the economy up to speed.
âThe $300 federal supplement helped thousands of Arkansans make it through this time, so it served its purpose. Now we need Arkansans back on the job,â Hutchinson said in a May 11 statement.
Arkansas state Sen. Ron Caldwell, a Republican, told Stateline he agreed with the governorâs decisions to end the assistance early. Caldwell pointed to available jobs in the agriculture field in his state. People who are unemployed, but afraid of getting Covid-19, he said, have to ?âbalance their fear of going to work.
âItâs not very fair for working class people to get up every day and people stay at home because they afraid to get sick,â Caldwell said in a phone call. ?âTeachers, first responders are going into the field. I know [Covid-19] is very real, but we canât stick our head in the sand and continue on with people having grocery shelves stocked and other things that have to be done.â
Across the aisle, Arkansas state Rep. Fredrick J. Love, a Democrat, said painting the community with a broad brush hurts households.
âIn rural Arkansas, some [businesses] arenât coming back. Some are permanently closed,â Love said. ?âIf people qualify for pandemic unemployment, itâs apparent they were working before. I think theyâre looking for work and canât find it or it was less [money] than they were looking for.â
In Georgia, state Rep. Kim Schofield, a Democrat, said the responsibility rests in part on some employers who donât pay livable wages.
âWe need workplace salaries to match the 21st century workplace,â Schofield said. ?âThere are larger companies who have made billions on the backs of workers. They can now give incentives back to workers, on-site child care, or raise some of the wages up to $15 and start there.â
Although itâs challenging for smaller businesses to find employees, there isnât a broad labor shortage, and people would go to work if jobs were available, said Wayne Vroman, an economist with The Urban Institute, an economic and social policy D.C.-based think tank.
Vroman added that the unemployment cutoffs put rural people of color at a larger disadvantage because they face higher unemployment rates. Although rural people donât participate in unemployment programs as much, there are many who do, and if cut off from the benefits, would suffer, Vroman said.
David Cooper, a senior economic analyst at the Economic Policy Institute, a nonprofit think tank in Washington, D.C., said the true indicator of a labor shortage is rising wages, but thereâs not accelerating wage growth across the board.
There is evidence, however, of a shortage in leisure and hospitality fields, he added.
âWages in leisure and hospitality employment make up just 4% of all wages in the U.S. economy, so this is a very small portion of the economy where employers may be struggling to find folks,â Cooper said. ?âThereâs no reason why difficulty for those employers should mean that we should turn off unemployment benefits for everyone.â
The industries experiencing shortages, such as leisure and trucking, donât provide job security for workers, Stettner argued. Taking a ?âsledgehammer to the problemâ by ending benefits wonât address deeper issues, he added.
About 9.8 million working-age people donât have jobs, even as the national unemployment rate is lower than last year. The rate stands at 6.1%, the most recent Bureau of Labor Statistics data show, and only 19 states and the District of Columbia exceeded the national rate. This is more magnified for Black and Latino people, who face higher unemployment rates than white people, at about 10% and 8%, respectively.
Meanwhile, statesâ troubled unemployment systems have been making headlines for months. Long wait times, website crashes and high traffic at call centers all contributed to barriers for people trying to navigate the unemployment system, according to New America, a public policy think tank.
And widespread unemployment fraud hurt all jobless residents in state after state: Maryland officials have frozen claimantsâ accounts because of potential unemployment fraud. Residents in Colorado are struggling to verify documents through a new technology system designed to halt potential fraud.
Communities of color also may have a harder time getting approved for unemployment assistance. A July 2020 survey by the Bipartisan Policy Center and Morning Consult found that Black and Latino workers were underrepresented in unemployment benefits. Black and Latino workers made up about 40% of the unemployed nationally, but were fewer than 20% of the recipients, the poll found.
The racial disparities in unemployment programs have always existed, said Michelle Holder, an economist and assistant professor at John Jay College of Criminal Justice. Since 1972, when the Bureau of Labor Statistics first began collecting data on unemployment among Black Americans, the rate has been more often than not twice the amount as white unemployment, according to the Center for American Progress, a left-leaning think tank based in Washington, D.C.
Holder added that Black people tend to live in states where unemployment payments are lower.
âThereâs already an imbalance,â Holder said.
And rural areas benefit the most from government programs because job growth is slower. Rural residents tend to be poorer, older, and lack transportation, access to the internet and health care.
Between 2010 and 2017, the yearly job growth for rural America was 0.5% compared with 1.8% in urban areas, data from the U.S. Department of Agriculture shows.
The families hardest hit in rural areas face other hurdles, from food and housing insecurity to difficulties paying for utilities, health and child care, said Neil Sealy, executive director the Arkansas Community Organizations, a grassroots group that focuses on social and economic justice.
âThis is a domino effect that affects people,â Sealy said. ?âNot having the money to survive will kick off a whole bunch of other things.â
This is why some grassroots organizers, economists and lawmakers insist that governors continue the assistance as well as administer unemployment programs more equitably.
âIf weâre counting on the system to help the economy and help to reduce poverty,â said Stettner of The Century Foundation,Â ?âwe cannot leave it to theÂ states.â
This blog originally appeared at In These Times on June 8, 2021. Reprinted with permission.
About the Author: Aallyah Wright reports on rural affairs and leads race and equity coverage for Stateline. Previously, Aallyah worked for Mississippi Today, aÂ digital nonprofit newsroom covering K?12Â education and government in the Mississippi Delta?â?her home region. As aÂ member of the Delta Bureau, she investigated Mississippiâs teacher shortage, finding it was six times worse than inÂ 1998Â when the Mississippi legislature passed aÂ bill to alleviate the crisis. She is aÂ 2020Â Mississippi Humanities Council Preserver of Mississippi Culture Award Recipient,Â 2019Â StoryWorks Theater Fellow, andÂ 2018Â Educating Children in Mississippi Fellow at the Hechinger Report. Wright graduated from Delta State University with aÂ bachelorâs in journalism and minors in communication andÂ theater.Â