Arizona has become the latest state to announce it will stop taking the federal government’s pandemic unemployment benefits, which some argue have caused a labor shortage by creating a disincentive to work.
The Grand Canyon State will offer a $2,000 Back to Work bonus for eligible workers — with a goal of getting as many Arizonans as possible to rejoin the workforce by Labor Day, Sept. 6, Western Growers explains. The state will stop paying federal benefits July 10.
With the move, Arizona joins Idaho, Montana, Utah, Wyoming and at least 13 other states in ending the extra benefit before Sept. 6 -- the date the aid from the American Rescue Plan is set to end, according to Forbes magazine
Arizona's bonus will be awarded when the individual has left the unemployment insurance program and completed at least 10 weeks of work with an employer, and be offered on a first-come, first-serve basis, the organization notes. The individual must also make $25 per hour or less, equivalent to a yearly salary of $52,000, at their new job and must begin working by Sept. 6.
“In Arizona, we’re going to use federal money to encourage people to work…instead of paying people not to work,” Gov. Doug Ducey said.
The state will also provide $7.5 million for community college scholarships for currently unemployed workers who are eligible for the Return-to-Work bonuses — as well as $6 million for GED test preparation and exam fees for eligible workers without a high school diploma.
Benefit causing labor shortage
Restaurants, stores and other businesses around the country have complained that the $300 a week in extra unemployment benefits included in federal coronavirus legislation disincentivizes workers to get back on the job.
“We have flooded the zone with checks that I’m sure everybody loves to get, and also enhanced unemployment,” U.S. Senate Minority Leader Mitch McConnell (R-Ky. recently told the Washington Post. “And what I hear from business people, hospitals, educators, everybody across the state all week is, regretfully, it’s actually more lucrative for many Kentuckians and Americans to not work than work."
Montana on May 4 signaled it would be the first in the nation to opt out of the federal benefit programs.
With the use of federal coronavirus relief funds, $1,200 return-to-work bonuses will be paid to unemployed individuals in Montana who rejoin the labor force and accept and maintain steady employment for at least one month, according to the governor's office.
Idaho and Wyoming are planning to opt out on June 19, while Utah will cease payments June 26, according to Forbes.