Iowa governor to end federal pandemic unemployment aid

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Data: U.S. Bureau of Labor Statistics; Chart: Axios Visuals

Gov. Kim Reynolds (R) announced this morning that Iowa is joining a group of red states that are ending the federal government's pandemic unemployment aid — including the supplemental $300 per week — June 12, months before it sunsets in September.

Why it matters: The federal supplement is meant to keep Americans afloat after a year of enormous financial hardships and job losses. But with the economy on the verge of reopening, employers say they're struggling to find enough workers to fill open jobs.

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Reynolds and other Republicans argue that the benefits are keeping the unemployed out of the labor market.

  • But that relies on the belief that unemployed Iowans are unmotivated to find jobs, resulting in a surplus of job openings — as I reported in Axios Des Moines daily newsletter.

The big picture: Thanks to the pandemic-era rules, self-employed Iowans, part-time workers and employees working fewer hours than normal may be claiming unemployment to help supplement their wages.

  • Since the start of the pandemic, more Iowans chose to leave the workforce altogether — double the national average.

  • And we're witnessing a spring surge in job openings. Industries that rely on consumer confidence like travel and dining are suddenly seeing an uptick again, so openings may just be outpacing hirings.

Another trend to note: Parents, and moms, in particular, continue to face barriers in returning to the workforce.

  • In an Iowa unemployment Facebook group, some moms said they felt uncomfortable returning to work, especially since younger children and babies don't qualify for vaccinations.

A local variable: Amazon's Bondurant warehouse opened at the end of 2020 — offering 1,000 jobs starting at $15.

  • That competition could be stealing away workers from other jobs, especially if they were unemployed last year.

The bottom line, via Axios' Courtenay Brown: This unemployment debate, which is already dividing businesses and economists, has no clear answer — but Iowa is the latest state to pick a side.

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