Boosted Jobless Benefits Are Being Pulled Early, but Some States Are Softening the Blow

by Maurie Backman | Updated July 25, 2021 - First published on May 14, 2021

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While at least 16 states are pulling boosted unemployment ahead of schedule, Montana and Arizona are offering incentives to get back to work.

The U.S. jobless crisis is still very much in play. In April, the unemployment rate actually rose after dipping steadily for many months, and millions of Americans are still out of work with no savings to fall back on.

Unemployed Americans have been entitled to a $300 weekly boost to their unemployment benefits -- a provision that was extended until early September as part of the recently-signed $1.9 trillion American Rescue Plan. But some states are pulling the plug on that boost early, which could potentially leave many Americans with a serious financial crunch on their hands.

So far, there are 16 states that are ending boosted unemployment ahead of schedule. But not all of these states are simply ending the benefits. To help encourage workers back out into the labor force, two states are offering up incentives. Keep reading to learn more about Montana and Arizona's plans for unemployed Americans in their states.

Helping the unemployed transition back to work

Montana was the first state to pull the plug on boosted unemployment. The reasoning is that the state is experiencing a widespread labor shortage, and the fear is that boosted unemployment has been keeping people from going out and seeking work. Montana's jobless rate is also a lot lower than the national average, which helped fuel the decision.

But Montana is at least making it easier to come off of unemployment and transition over to an employer-funded paycheck. The state is offering unemployed workers a one-time, $1,200 bonus to return to work.

Arizona is trying to make things a bit easier as well, offering unemployed workers a one-time, $2,000 bonus to return to work on a full-time basis and a $1,000 bonus to return to work on a part-time basis. To qualify, eligible workers must begin working by Labor Day and earn about $52,000 a year or less. Those funds will be payable after 10 weeks of work.

Arizona will also offer three months of childcare assistance to people who have children and return to the labor force after collecting unemployment benefits. And that touches on a big issue that some lawmakers may be overlooking.

Lawmakers have been quick to point out that jobless workers are disincentivized to return to the labor force because their weekly unemployment benefits are being boosted. But another reason many have yet to return, despite there being available jobs, is that they don't have childcare.

Families routinely rely on schools to provide care during the day, but since many districts have yet to fully reopen for full-time, in-person learning, lower earners face a predicament -- get a job and lose the bulk of their wages to childcare, or stay unemployed until their boosted benefits run out. For many, the latter makes more financial sense, but Arizona is helping to solve that problem by offering aid to cover childcare costs.

While ending boosted jobless benefits may end up hurting a lot of people financially, the good news is that two states are taking steps to try and encourage people back out into the workforce. There's a good chance more states will pull the plug on boosted benefits prematurely in the coming days or weeks, but if more follow in Montana and Arizona's footsteps, the blow may not be as harsh.

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