Some GOP states are moving to end federal unemployment benefits, which could impact at least 276,000 workers

• Some GOP-led states are opting to end expanded unemployment benefits early to entice workers back.
• The move could affect the finances of at least 276,000 people, an unemployment expert told Insider.
• Disparate state employment systems may have already caused inequities, especially for Black workers.
• See more stories on Insider's business page.

At least 276,000 workers are at risk of losing federal unemployment benefits in GOP-led states.

Several states are moving to cut expanded unemployment insurance in an effort to push those collecting jobless benefits to return to work.

The move comes as April's surprisingly dismal jobs report showed just a fraction of anticipated jobs returning, and anecdotal evidence of (generally low-paying) companies having difficulty hiring enough workers to reopen in a fuller capacity.

South Carolina, Montana, and Arkansas are ending their participation in federal assistance programs for the unemployed in late June. They are chiefly targeting the $300 federal unemployment supplement, a key part of President Joe Biden's $1.9 trillion stimulus law which expires on Labor Day.

Republican Gov. Greg Gianforte in Montana slammed the enhanced unemployment insurance on Friday, calling it "no-work bonuses" in a tweet. Prior to the jobs report, South Carolina Gov. Henry McMaster - another GOP member - said the state will stop its participation in federal unemployment by the end of June.

"This labor shortage is being created in large part by the supplemental unemployment payments that the federal government provides claimants on top of their state unemployment benefits," McMaster wrote.

'They're canceling federal pandemic benefits'

"They're not just taking away the $300 supplement, they're canceling federal pandemic benefits," Andrew Stettner, an unemployment expert at the Century Foundation, told Insider.

"Those who are on PUA and PEUC, their benefits will get cancelled," he said, referring to Pandemic Unemployment Assistance, the program providing benefits to gig workers and contractors, and Pandemic Emergency Unemployment Compensation, which doles out aid to the long-term unemployed.

Stettner calculated that at least 276,000 people could be affected in the states slashing aid two months before it is set to expire, though the amount is likely to grow as other GOP-led states like Indiana suggest they could soon follow suit.

Other states are reinstating job-searching requirements that were waived during the pandemic. Those include Maine, New Hampshire, North Carolina, Pennsylvania, and Rhode Island, The Associated Press reported.

Individual states rolling back federal unemployment benefits could have a disproportionate impact on marginalized workers. A report from the left-leaning Economic Policy Institute (EPI) looked at how much of the UI disbursed in each state was from federal benefits. The EPI report notes that this could impact workers along racial lines, since states where Black Americans make up a larger share of the population tend to have weaker UI benefits.

In South Carolina, for instance, around 76% of total UI came from federal programs in the fourth quarter of 2020. Arkansas and Montana both leaned heavily on federal benefits in disbursement of UI benefits, with federal UI making up 74.7% and 68.7% of their total disbursed benefits, respectively.

"The US economy is still down 8.2 million jobs from what we had prior to the pandemic - and if you account for people newly entering the workforce since then, we are down over 11 million jobs," David Cooper, a senior economic analyst at EPI, said in an email to Insider. "So, the economy is simply not at a place where we should be cutting back UI benefits. There are far more people looking for work and unable to find it than there are employers unable to fill vacancies, and pulling back on UI will only slow down the recovery."

President Joe Biden doubled down on the need for unemployed workers to get back to work in a Monday address, saying "we're going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits." But, he noted, COVID-19 exceptions are still in place "so that people aren't forced to choose between their basic safety and a paycheck."

Biden's statements don't amount to a new policy change from his administration, therefore they only underscore steps already on the books that states can take to encourage people to jump back into the workforce.

But, Biden said, his father used to tell him that a job is more than a paycheck.

"I think that people who claim Americans won't work, even if they find a good and fair opportunity, underestimate the American people," Biden added. "So we'll insist that the law is followed with respect to benefits, but we're not going to turn our backs on our fellow Americans; 22 million people lost for jobs in this pandemic through no fault of their own."