States facing labor shortages because of Biden's $300 unemployment boost will introduce hiring bonuses and tax credits for businesses to try and lure people back to work

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States and lawmakers are devising new incentives and business tax breaks to try to get employees back into the workforce amid labor shortages in an improving economy with dropping covid cases.

The efforts – which include tax credits for businesses who hire from among the long-term unemployed – come amid reports from companies that they are struggling to fill positions – and concern from Republicans that $300 federal unemployment incentives are a hindrance.

The tactics come as fewer than 400,000 Americans sought unemployment benefits last week, the fifth straight weekly drop.  

Republican governors and members of Congress are pushing new business tax credits and bonuses as a way to entice people back into the workforce

One idea is to tap into the federal jobless aid to create bonuses payments for people who land a job. The bonuses, which states would be permitted to distribute, would range from $600 to $1,200 under legislation proposed by House Ways and Means Committee Chairman Rep. Kevin Brady (R-Texas) and Sen. Mike Crapo (R-Idaho).  

Another proposal, by Sen. Chris Van Hollen (D-Md.) and Andy Levin (D-Mich.) would boost groups that provide aid to people unemployed for more than six months, the Wall Street Journal reported. 

It all comes as COVID cases continue to drop, with average new daily cases falling below 20,000.

The $300 federal payments supplement state unemployment aid. The nation still has unemployment of about 6 per cent, or nearly 10 million unemployed, even as the economy continues to pick up steam. 

Many elected Republicans believe the payments are contributing to the problem, and Republican governors are producing their own incentives, relying on funds from the $1.9 trillion covid relief bill. 

Republican governors from 24 states are ending $300 per week unemployment benefits from President Joe Biden in an effort to encourage citizens to return to the workforce. States who will opt out of the federal relief program by the end of June are: Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Maryland, Mississippi, Missouri, Montana, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, and Wyoming

The efforts come amid worker shortages the Chamber of Congress is calling a crisis

A paper by two researchers at the Federal Reserve Bank of San Francisco found that the payments had 'small but noticeable effects' on the decisions by workers of whether to rejoin the force, meaning other factors could be at play.  The $300 boost expires after Labor Day. They found an earlier $600 boost served as a 'moderate disincentive' to accept work.

The U.S. Chamber of Commerce is calling out a worker shortage 'crisis.'

The business group on Tuesday unveiled its 'America Works' program to mobilize government and industry resources to boost the number of qualified job seekers across the country. 

The Chamber says that there are now just 1.4 workers available for each new opening, down from 4 in 2012, as a huge wave of Millennials was hitting the workforce, and half the 2.8 average over the past 20 years. 

Maryland is the latest Republican-run state to snub President Biden's $300-per-week unemployment payments. The extensions were included in the $1.9 trillion covid relief law he signed.

Governor Larry Hogan announced the move Tuesday as more states get on board with ditching the boosted benefits that have allowed workers during the coronavirus pandemic to make more sitting at home than if they returned to work.

'Our health and economic recovery continues to outpace the nation, and we have reached the benchmark set by President Biden of vaccinating 70% of adults,' Hogan said in a statement. 'While these federal programs provided important temporary relief, vaccines and jobs are now in good supply.'

'We have a critical problem where businesses across our state are trying to hire more people, but many are facing severe worker shortages,' he added.

The payments, as well as two other pandemic-era unemployment benefits, will end on July 3 – rather than remaining in place through their federal-level expiration in September.

Maryland, which normally votes blue in presidential elections but has a Republican governor, is now the 25th state to stop doling out the $300 per week payments to jobless citizens. 

Van Hollen and other Maryland congressional Democrats urged Hogan to reconsider, saying instead of 'taking a measured, phased-in approach' that he 'unnecessarily bowed to partisan pressure and ignored the needs of struggling workers and families.' He said the payments were helping 300,000 Maryland residents.

The states' governors argue that there are plenty of jobs available – and that the boosted benefits disincentivize their constituents to go back to work because they make more sitting and home and collecting.

There are also concerns from local leaders, as well as economic experts, that the artificial employee shortage combined with federal handouts will lead to massive and undue inflation.

Maryland Governor Larry Hogan is the latest to end the program, announcing Tuesday that his state would opt out of the boosted federal benefits by July 3

All states who said they will stop accepting the federal payments this summer have Republican governors, but there are still two GOP-run states holding out – Massachusetts and Vermont. 

Before Hogan, Florida Governor Ron DeSantis was the latest to hop on board, announcing last week that he would no longer accept Biden's federal unemployment benefit boost.

Floridians will no longer be eligible to receive the weekly Federal Pandemic Unemployment Compensation starting June 27, the Florida Department of Economic Opportunity (DEO) announced Monday.

Joining Maryland and the Sunshine State in opting out of the supplemental payments are Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, and Wyoming.

Nebraska's Governor Pete Ricketts said said last month: 'Now it's time to return to normalcy.' He followed up by saying the $300 payments will end June 19.

Massachusetts and Vermont, the last two remaining states with GOP governors, have not considered ending the benefits. The two states are widely blue despite having Republicans in the statehouse.

Governor Charlie Baker of Massachusetts has even doubled down on the boost remaining in place until it expires in the fall.

The move to reject the extra money from nearly half of U.S. states comes after expert analyses showed people who made $32,000 pre-pandemic are now making more in benefits staying at home than if they were to go back to the workforce.

The average U.S. salary for an individual in 2019 was $31,133. This means the average American could earn more money in coronavirus-era benefits instead of returning to their old jobs. 

The shortages in U.S. labor and high demand for jobs to be filled is causing concern among economists and experts who say it will lead to a massive spike in inflation. 

Florida Governor Ron DeSantis announced this week that he would opt out of Joe Biden's boosted unemployment benefits making Florida the 23rd state to do so

Some, like Moody's Investors Service's chief economist Mark Zandi, insist things like higher demand than supply, higher housing prices and increased inflation are likely to return to normal with time.

Others, like Clinton and Obama-era economist Larry Summers, say 'not everything we are seeing is likely to be temporary.'

In a Monday op/ed in The Washington Post, Summers said some of these factors will even push inflation even higher. 

'Florida's economy has bounced back tremendously with over 460,000 jobs available throughout our state and the strongest economic conditions in the nation,' the state's DEO Secretary Dane Eagle said in a statement. 'Florida's employers are also seeing employment growth, as more Floridians, including some who completely left the workforce, are now eagerly reentering the workforce.

'Transitioning away from this benefit will help meet the demands of small and large businesses who are ready to hire and expand their workforce,' he added. 

The weekly boost in jobless benefits from the federal government were passed last year under Donald Trump as the coronavirus saw a record number of Americans lose their jobs or be furloughed.

Democrats tried to get the benefit boosted to $400 per week in the American Rescue Plan, which is the latest COVID-19 relief package signed into law by President Biden in mid-March. However, to get more support – especially from moderate Democrats like West Virginia Senator Joe Manchin – the boosted benefits remained at $300 per week for unemployed Americans.

All of the 23 states who are opting out of the enhanced unemployment benefits from the federal government, still have remaining unemployment benefits at the state level that will be available to those who remain jobless.

Texas Governor Greg Abbott said last Monday the federal benefits are 'no longer necessary' and announced he would stop accepting these specific funds allocated for his state as part of the $1.9 trillion coronavirus stimulus package. By June 26, no Texan will receive the additional weekly $300 payments.

'TX will opt out of further federal unemployment benefits tied to the #COVID19 pandemic,' Abbott wrote on Twitter on May 17. 'There are nearly 60% more jobs open in TX today than there was in Feb. 2020, making these unemployment benefits no longer necessary.'

He also assured in a tweet the following day that 'Texas has more job openings than the number of unemployment claims on file.'

'Also, almost 20% of unemployment claims filed during the pandemic appear to be fraudulent,' he accused.

'Texas is 100% open — it's time to get back to work.'

Texas Governor Greg Abbott (pictured left in October 2020) announced last week that his state would stop taking federal unemployment funds and the $300 per week payments will stop for Texans in late June

Since announcing an end to benefits, thousands of Texans have signed a petition attempting to compel Abbott to reinstate the $300 weekly benefits.

As of Wednesday morning the petition 'Reinstate State of Texas Federal Unemployment Benefits' on Change.org garnered nearly 7,5000 signatures.

In a letter to Abbott, petition creator Muhammad Ifzal writes: 'The last year has been hard on so many of the sons and daughters of Texas.'

'Covid19 (sic) brought with it unexpected consequences in multiple areas of life. Socially, physically, emotionally, financially, and probably more than we haven't realized yet,' he continued in the text urging Abbott to not end the benefits. 'The times we went through will be remembered in history for years to come, and document either the success or failure of our leaders.'

'I pray that you consider this petition to reinstate State of Texas Federal Unemployment Benefits till September 06, 2021.'

So far, no states with Democratic governors have withdrawn from the program to incentivize workers back into the job market.

Earlier this month, a Department of Labor report showed the country added an underwhelming 266,000 jobs in April, fueling GOP claims that the benefits were keeping people at home.

Despite the dismal job growth, governors assure there is a surplus of open positions in their respective states.

Idaho governor Brad Little announced the state would withdraw from the scheme saying in a statement 'it's time to get back to work.' 

In eight states, unemployed Americans can earn at least $600 per week in benefits. Massachusetts offers the most generous benefits. The White House denied that these benefits are to blame for the historically low jobs numbers and underwhelming April growth

In March 2019, the average weekly payment to an unemployed person was $348 when combining federal and state payments. That nearly tripled to $938 in March 2020. Now they're at $638  per week – $300 more than they were pre-pandemic. Someone who was working 40 hours a week in 2019 now gets nearly $16-an-hour to do nothing at home, which is more than double the federal minimum wage of $7.25

Iowa governor Kim Reynolds also said the state would decline the aid and tweeted: 'This country needs to look to the future, and Iowa intends to lead the way.' 

President Biden was forced to defend his controversial expanded benefits policy amid criticism it keeps Americans from taking jobs.

Encouraging states to reinstate a pre-pandemic policy requiring people to search for work, he said in remarks on May 10, '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.'

He claimed the White House does not 'see much evidence' that the $300 per week federal unemployment benefit in place until September has deterred people from taking jobs, adding that 'Americans want to work.' 

Kim Reynolds of Iowa opted out of the federal benefits in an effort to get Americans back to work

North Dakota governor Doug Burgum also announced the state would cease offering the $300 a week from June

Tennessee became the six state to decline the unemployment package earlier in May

The program was created last year to assist those put out of work in the midst of the coronavirus pandemic, but governors are now worried their states' economies won't recover if people continue to be incentivized to not work.

Announcing the change earlier in May, Missouri governor Mike Parson said: 'While these benefits provided supplementary financial assistance during the height of COVID-19, they were intended to be temporary, and their continuation has instead worsened the workforce issues we are facing.'

Mississippi's governor Tate Reeves tweeted May 10: 'It has become clear to me that we cannot have a full economic recovery until we get the thousands of available jobs in our state filled'.

Other Republican-led states have made changes to their unemployment benefits scheme. Vermont and Indiana, for example, have reinstated the search for work rule for unemployed workers to receive benefits.

The stipulation that jobless Americans receiving unemployment benefits had to show proof they were actively searching for a job was waived during the pandemic.

Iowa's governor tweeted the announcement, saying: 'Iowa will end its participation in federal pandemic-related unemployment benefit programs. 

'Our unemployment rate is at 3.7 percent, vaccines are available to anyone who wants one, and we have more jobs available than unemployed people.'

Reynolds added: 'Regular unemployment benefits will remain available, as they did before the pandemic, but it's time for everyone who can to get back to work.  

'This country needs to look to the future, and Iowa intends to lead the way.'  

Arkansas Governor Asa Hutchinson told CNN on Tuesday morning: 'The extra compensation was very helpful during the dark days of the pandemic... But now our economy has come back, we have jobs aplenty... We cannot pay extra compensations for workers to stay home'

North Dakota governor Doug Burgum also announced the state would cease offering the $300 a week from June in a statement on Tuesday, joining Tennessee governor Bill Lee. 

Burgum said in a statement: 'These federal unemployment programs were meant to supplement state benefits and provide short-term relief for displaced and vulnerable workers, and these programs have accomplished their goals but are now counterproductive. 

'Safe, effective vaccines have been available to every adult in North Dakota for months now, and we have an abundance of job openings with employers who are eager to hire'.  

Mississippi's governor wrote in a statement declining the boost: '[I]t has become clear that the Pandemic Unemployment Assistance (PUA) and other like programs passed by the Congress may have been necessary in May of last year but are no longer so in May of this year.'  

Reeves said in a statement: 'Programs passed by the Congress may have been necessary in May of last year but are no longer so in May of this year'

Biden said in remarks from the White House on May 10 that anyone taking unemployment who gets offered a 'suitable job' must take it or lose benefits. The new demand comes after experts claim those who made $32,000 before the pandemic, can now make more by collecting benefits at home

Arkansas Governor Asa Hutchinson said May 11 it's time to stop paying workers to stay home. 

'The extra compensation was very helpful during the dark days of the pandemic when unemployment rates were so high,' Hutchinson told CNN's 'New Day'. 'But now our economy has come back, we have jobs aplenty, we have employers that are begging workers to come to their place of business.'

'We cannot pay extra compensations for workers to stay home – we need them in the place of employment,' he added, claiming: 'If they need assistance in finding a job, we'll provide that to them. If they did child care assistance we have more than ample resources to assist in that, as well.'

'People of Arkansas want to work,' Hutchinson said, 'but we found that that enhanced benefits was simply an impediment.'

Idaho governor Brad Little said in a statement online:  '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, 

'We see 'Help Wanted' signs everywhere. Idaho has the strongest economy in the nation, and we are a top 10 state for best employment, but there is more we can do. It's time to get back to work.' 

Little added: 'My decision is based on a fundamental conservative principle – we do not want people on unemployment. We want people working. A strong economy cannot exist without workers returning to a job.'   

South Carolina governor Henry McMaster slammed the idea of continued boosted unemployment benefits as part of the left's way to lead the U.S. toward socialism.

The South Carolina governor told Fox News' Tucker Carlson earlier in May that his state is experiencing a labor shortage as a result of the enhanced federal payments for jobless in his state.

'This is about as close to socialism that I've seen,' McMcaster told the conservative Fox host. 'We've got help-wanted signs up everywhere, we get calls and letters, and texts from all sorts of businesses all across the state looking for people to work.'

'People won't come to work because they're getting as much money or more in some cases by staying home,' he lamented, adding: 'It's a counterproductive policy and I'm afraid what the Biden administration is doing is that they're telling everybody that the virus is still rampant and still in great danger. Everybody has to stay home. That's not true.'

'Go get a job, get back to work. That's how you build an economy and a family and everything else.'

'The Biden proposals are totally underproductive, killing incentive, and it puts us right on the road to socialism. We've got to stand up and fight against this,' McMaster said. 

The South Carolina governor ordered the second week of May that his state's Department of Employment and Workforce (DEW) to withdraw from the federal government's pandemic unemployment programs. 

'South Carolina's businesses have borne the brunt of the financial impact of the COVID-19 pandemic. Those businesses that have survived — both large and small, and including those in the hospitality, tourism, manufacturing, and healthcare sectors — now face an unprecedented labor shortage,' McMaster wrote in a letter to DEW Executive Director Dan Ellzey.

The state will stop accepting the additional aid starting June 30, a decision that was endorsed by South Carolina Senator Lindsey Graham.

'We are currently facing a labor shortage created in large part by the supplemental unemployment payments that the federal government provides,' McMaster wrote on Twitter on Thursday. 'Since the Biden Admin and Congress appear to have no comprehension of the damage being done the State of South Carolina must take action.' 

South Carolina's unemployment rate reached nearly 13 per cent in April of 2020, but in March 2021, the unemployment rate was down to 5.1 per cent, which is below the national rate of 6 per cent.

McMaster said his state still has more than 81,000 available jobs as the economy has reopened and restrictions have been lifted.

Alabama Governor Kay Ivey also announced her state was ending engagement in boosted unemployment benefits from the federal government.

'As Alabama's economy continues its recovery, we are hearing from more and more business owners and employers that it is increasingly difficult to find workers to fill available jobs, even though job openings are abundant,' Ivey said in a statement announcing the move. 

She insisted: 'Among other factors, increased unemployment assistance, which was meant to be a short-term relief program during emergency related shutdowns, is now contributing to a labor shortage that is compromising the continuation of our economic recovery.'

'Our Department of Labor is reporting that there are more available jobs now than prior to the pandemic. Jobs are out there,' Ivey added.  

The move from Republican states to opt out of the federal programs comes after Biden rejected calls by Republicans to cut the extra $300 weekly unemployment benefit passed under his COVID relief plan.

The benefit already expires in September. The expiration of the program has been extended several times since it was first passed by Congress under former President Donald Trump last year.

'Twenty-two million people lost their jobs in this pandemic, through no fault of their own,' Biden said. 'For many of those folks, unemployment benefits are a lifeline.'

Biden's administration argues the boosted benefits are not the main factor keeping people from returning to the workforce. 

'We don't see much evidence that the extra unemployment insurance is a major driver in people not rejoining the workforce,' White House Press Secretary Jen Psaki said at her daily briefing.

In April, only 266,000 people joined the workforce - a quarter of the 1 million that were predicted. The loss stunned experts with many concluding there isn't enough of an incentive to go back

The darkest shaded states - many of which are Democrat states - are where unemployment rates are the highest. Massachusetts has the highest combined benefits with a max of $855 a week. The unemployment rate there is at 7.1 per cent  - higher than the national average 

States who voted for Biden in 2020 on average lost people in the workforce at a disproportionately higher rate than red states.

Many of these states also have the highest combined unemployment benefits when taking into account state and federal benefits during the last year.

Massachusetts has the highest unemployment benefits with a max of $855 per week. The unemployment rate in the Northeast state is 7.1 per cent – higher than the 6 per cent national average.

The average weekly payment to an unemployed person in March 2019 was $348 when combining federal and state payments. That number nearly tripled to $938 in March 2020, when the pandemic first really hit the U.S. – resulting in a record number of unemployed Americans.

Now that average payout is still at $638 each week, which is $300 more than they were before, meaning someone who was working 40 hours every week before the pandemic now gets nearly $16-per-hour to do nothing at home, which is more than double the federal minimum wage of $7.25.

The Labor Department reported historically low jobs numbers on Friday, showing the U.S. added only 266,000 jobs in April, well below the one million jobs that most forecasters expected.

Psaki blamed the disappointing report on factors other than the unemployment benefits disincentivizing people to go back to work. She said lack of vaccination access, schools remaining closed, lack of childcare options and the need for a livable working wage as reasons why people aren't returning to the workforce.

Unemployment skyrocketed to 14% in April 2020, when the country shut down along with the rest of the world. It has since dropped to 6 percent but it's around double the 3 percent it had been in 2019

'The majority of economists, internally and externally of the White House, don't feel that unemployment insurance - something that was done at a time where, to help unemployed people get through a very difficult economic downturn, during a pandemic - is a major driver in our unemployment data, that there are other factors, bigger factors that were contributing,' Psaki said. 

Biden said during remarks on the economy on May 10 that anyone taking unemployment who gets offered a 'suitable job' must take it or lose their benefits. 

'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,' he said at the White House.

'There are a few COVID-19 related exceptions, so that people aren't forced to choose between their basic safety and a paycheck, but otherwise, that's the law,' Biden added.

The president didn't specify what he meant by a 'suitable job'. He did, however, note companies that 'provide fair wages and safe work environments' will 'find plenty of workers.'

To enforce the matter, Biden directed Labor Secretary Marty Walsh to reaffirm to states that individuals receiving unemployment benefits may not continue to receive benefits if they turn down a 'suitable job' due to a non-coronavirus specific concern.

The administration noted in a fact sheet that 'workers may not misreport a COVID-related reason for unemployment.'

States that voted for Biden lost jobs at a higher rate during COVID than states that voted Republican

The process of proving an individual has been offered a 'suitable job' but not taken it usually requires some sort of self-reporting, which is unreliable

They listed acceptable reasons for turning down a job as the worker has a child at home who cannot go to school because of the COVID pandemic or that the worker is offered a job at a worksite that is out of compliance with federal or state health requirements.

The process of proving an individual has been offered a 'suitable job' but not taken it usually requires some sort of self-reporting, which is unreliable.

Twenty-nine states have already reinstated work search requirements, which mandates unemployed individuals must be actively looking for a job. Walsh will work with the remaining states to reinstate that requirement, as well.

During his speech, Biden also dismissed experts' claims that Americans can earn more by staying home and collecting unemployment. 

'Americans want to work,' he assured. 'I think the people [who] claim Americans won't work, even if they find a good and fair opportunity, underestimate the American people,' he added.