Jobless Texans will soon lose access to all additional federal unemployment aid — including a $300-per-week supplemental benefit — that was extended as a result of the pandemic after Gov. Greg Abbott on Monday, May 17 said Texas will opt out of the federal assistance.
Following pressure from business groups, Abbott is withdrawing from the program that allowed Texans to receive a weekly unemployment supplement from the Federal Pandemic Unemployment Compensation program. Abbott also cut off another lifeline called Pandemic Unemployment Assistance, which extended jobless aid to gig workers, self-employed people and others who aren’t traditionally covered by unemployment insurance, the Texas Workforce Commission said. Congress extended those programs through September, but Abbott said they will end for Texans on June 26.
Approximately 344,000 Texans were receiving assistance through the PUA program as of April 30, according to data compiled by economist Julia Coronado, economics professor at the University of Texas at Austin. That number is down from the approximately 563,000 Texans receiving aid through the PUA program to start the year, a sign that Texans have steadily exited the program and returned to work even with the program still in place, Coronado said.
Monday’s decision comes amid a trend of Republican governors announcing plans to cut benefits in order to encourage people to return to work.
According to a press release, Abbott’s office said the decision was made to focus on connecting unemployed Texans with jobs instead of paying them unemployment benefits.
“The Texas economy is booming and employers are hiring in communities throughout the state,” Abbott said. “According to the Texas Workforce Commission, the number of job openings in Texas is almost identical to the number of Texans who are receiving unemployment benefits. That assessment does not include the voluminous jobs that typically are not listed, like construction and restaurant jobs.”
The unemployment rate in Texas was 6.9% in March, which is more than double the record low of 3.4% in May 2019. The Texas Workforce Commission did not immediately respond to a request for comment about how many Texans were receiving the federal benefits.
As governors withdraw from the federal benefits, critics say the payments are still necessary because some Texans are also still facing difficulties returning to the workforce while dealing with COVID-19 or coordinating child care, according to The Dallas Morning News.
“We can’t even imagine the thinking behind Gov. Abbott’s callous decision to strip the remaining federal Unemployment Insurance benefits out of the pockets of Texas working families,” Rick Levy, president of the large labor group Texas AFL-CIO, said in a statement. “If he took the time or had any interest in understanding the challenges working people face, Gov. Abbott would see clearly that folks across Texas desperately need these funds as they try to navigate their way through the economic carnage of the pandemic.”
Coronado, the economics professor, said despite a desire to “return to normal,” the world has changed.
“Our perceptions of risks and rewards have changed — navigating child care, navigating our own personal vulnerabilities,” Coronado said. “This notion of people being lazy — are you lazy if you have an elderly mother at home and you don’t want to go work in a bar? No, you’re probably a good son or daughter. People are making choices on a lot of dimensions, not just the pay.”
Abbott said there are nearly 60% more listed jobs open in Texas today compared to February 2020. According to the Texas Workforce Commission, approximately 76% of posted jobs pay more than $11.50 an hour, and 2% of posted jobs pay around the minimum wage.
Late last week on May 13, the Texas Association of Business and 37 other business organizations wrote a letter to Abbott asking him to pull out of the extra $300 a week to encourage productivity and lower unemployment. According to the letter, unfilled jobs in the state are threatening the “state’s recovery and economic future.”
“Texans want to get back to work, back to school and back to normal. Employers believe that supplemental UI benefit payments from Washington are disincentivizing work and resulting in many good Texas jobs going unfilled,” the letter said. “We believe it is time to realign government incentives behind the goal of rebuilding our economy together.”
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