Maryland announced Tuesday that it will end emergency federal unemployment benefits early, bringing the total of states doing so to 25.
According to an analysis of Labor Department data by CNBC, the decision means that at least 3.7 million people will see a reduction or elimination of their unemployment benefits in the coming weeks, starting as soon as June 12.
Unemployed workers in the 25 states – all led by Republican governors – will stop receiving the $300 per week federal supplement that Congress scheduled to run through Labor Day, and some will also lose benefits provided for the self-employed and the long-term unemployed.
Maryland Gov. Larry Hogan said Tuesday that his decision was based on what he perceived as a shortage of workers, driven by the enhanced federal benefits. “While these federal programs provided important temporary relief, vaccines and jobs are now in good supply,” he said. “And we have a critical problem where businesses across our state are trying to hire more people, but many are facing severe worker shortages.”
But many economists say that the labor market is deeply unsettled right now, and that the elimination of benefits will only hurt vulnerable people. “It’s like a classic example of blaming the victim,” Andrew Stettner of The Century Foundation told CNBC. “It’s a crazy policy response to a situation that’s obviously a lot more complex than that.”
In a research note last week, analysts at JPMorgan said that politics, not economics, is likely driving the decisions to end benefits early. While the federal benefits are probably limiting the labor supply in some places, labor market tightness at the state level does not appear to be the deciding factor in ending the aid programs, the researchers found. Instead, the common factor is having a Republican governor.