Idaho Gov. Brad Little announced Tuesday that he would end the state’s participation in three federal unemployment programs meant to aid those struggling financially because of the COVID-19 pandemic.
Little said Federal Pandemic Unemployment Compensation, Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation would end on June 19. Together, those programs offer an additional $300 weekly payment to unemployed individuals, extend unemployment benefits after regular limitations are exhausted, and provide unemployment for people usually ineligible for unemployment, such as the self-employed.
“Employers are telling me one of the big reasons they cannot recruit and retain some workers is because those employees are receiving more on unemployment than they would while working,” Little said in a news release. “We see ‘Help Wanted’ signs everywhere.”
Little lauded Idaho’s strong economy and employment — the state’s March unemployment rate was 3.2% compared with the national 6%, and U.S. News & World Report ranks the state’s economy third in the country. Still, he said he wanted to do more.
“My decision is based on a fundamental conservative principle – we do not want people on unemployment,” Little said. “We want people working. A strong economy cannot exist without workers returning to a job.”
State officials have already taken steps to dissuade Idahoans from staying on unemployment. Last month, Idaho reinstated unemployment work-search requirements that were lifted during the pandemic. People receiving unemployment benefits must demonstrate that they are actively seeking full-time work.
Idaho also opted out of the federal government’s Mixed Earner Unemployment Compensation program, which would have provided an additional $100 per week to certain unemployed individuals.
Local businesses feeling pressure from employee shortage
In the news release, Chip Schwarze, chairman of the Idaho Chamber Alliance, said Idaho chambers of commerce support Little’s decision.
One local business owner, Stephanie Camarillo of Molly Maid in Meridian, said she hopes Little’s move will bring back those who have left the workforce.
“Workers seem to chase money, whether it is from the government or other employers that keep raising wages,” Camarillo said in the news release. “We work hard to be an outstanding employee-centered business, and we compensate our people well. But the current environment is making it difficult to run operations smoothly. We have had to turn down lots of business because we don’t have the people to deliver services, and I fear that if not dealt with, there will be lasting effects.”
Last month, Treasure Valley restaurant owners told the Statesman that they were calling up former workers in an attempt to fill empty shifts and bumping up pay in hopes of attracting new employees.
At the same time, Craig Shaul, a research analyst supervisor for the Idaho Department of Labor, told the Statesman that competition from higher-paying industries — like Amazon, which offers a $15 minimum wage — and concerns over lingering pandemic issues like remote learning were likely contributing to the worker shortage.
Idaho Democrats raised similar concerns Tuesday evening.
“Unemployment benefits, by definition, are a fraction of what people earned before they lost their job. The enhanced benefit helps families keep up with rent, utilities, groceries, and other basic necessities,” Asst. House Democratic Leader Lauren Necochea said in a news release. “Gov. Little’s decision shows that he is out of touch with working Idahoans.”
The Democratic Caucus blasted Little, saying he “turned his back on workers in struggling industries, as well as self-employed Idahoans who will be cut from benefits under his decision.” They also cited research from the Federal Reserve Bank of San Francisco that found previous pandemic unemployment benefits of $600 per week had no impact on recipients’ willingness to pursue employment.
According to The Wall Street Journal, the average unemployment recipient makes the equivalent of about $15 an hour. And while that’s motivation for some workers to wait for their preferred job to come along, the WSJ reported, economists are citing similar complicating factors like Shaul mentioned.
“If you lost a near-minimum-wage job with a 15-minute commute, it may not be worth taking a near-minimum-wage job with a 60-minute commute, especially if schools are closed and you don’t have child care,” University of Chicago economist Steven Davis told the Journal.