SCOTT SIMON, HOST:
Today in four states, several hundred thousand people are losing their enhanced unemployment benefits. Millions more will see these extra payments cut off in the weeks to come. Republican governors in 25 states are ending them ahead of schedule. They argue the special jobless benefits the federal government offers workers makes it hard for employers to hire the workers they need. NPR chief economic correspondent Scott Horsley joins us. Good morning, Scott.
SCOTT HORSLEY, BYLINE: Good morning.
SIMON: Which states are cutting benefits and why?
HORSLEY: Mississippi, Missouri, Iowa and Alaska are the first states to cut benefits as of this weekend. Twenty-one other states are going to follow in the coming weeks. The Republican governors in all those states say the extra $300 a week that the federal government's been paying during the pandemic is discouraging people from taking jobs that are available. Here's Mississippi Governor Tate Reeves.
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TATE REEVES: For our economy to fully recover, we have to get our people back to work. And we think that the pandemic, for all intents and purposes, is behind us.
HORSLEY: Mississippi, by the way, ranks last in the country in COVID vaccinations. The state's unemployment rate is also higher than the national average. But Governor Reeves' state is at the front of the pack when it comes to cutting off benefits, starting today.
SIMON: What are the indications and information? Have the enhanced benefits truly kept people from looking for work?
HORSLEY: You know, economists are divided on that question. I've been asking people who've been getting the payments, like Nicole Jones (ph) in Jackson, Miss. She says there are a lot of different factors keeping people out of work. One is health concerns. She, for example, has not been vaccinated yet. Child care is also an issue for a lot of parents, especially if they have kids who are not in school. But money is part of the equation. Before the pandemic, Jones worked a lot of different jobs in customer service and at Head Start and as a nursing assistant. What they all had in common was pretty low wages.
NICOLE JONES: The job market here - they really do not pay enough just - really just paycheck to paycheck.
HORSLEY: An extra $300 a week in unemployment benefits - that is the equivalent of 7.50 an hour for a full-time worker. So where those benefits are available, they might make low-wage jobs less attractive. Employers might have to pay more in order to find workers. By doing away with the benefits early, the Republican governors are taking some of that pressure off employers
SIMON: And what's happening in states that are not ending benefits early?
HORSLEY: The other 25 states are going to keep paying an extra $300 a week, but only through the beginning of September. After that, the benefits phase out across the country. So we've basically got a three-month experiment here with half the states ending benefits early, half keeping them in place through the summer. And then at some point, we will be able to see, did the states that cut off benefits early actually put more people back to work more quickly?
SIMON: What will this mean for people losing benefits and for their families?
HORSLEY: Obviously, it's going to be a hardship for some. They are losing money that might have been helping to pay the rent or to buy groceries. In some instances, they might be forced into taking a job they don't feel comfortable at and possibly missing out on a job that would be a better fit down the road. To be sure, some people might find jobs right now that are going to be very satisfying. But Elise Gould, who's with the left-leaning Economic Policy Institute, says she doubts this experiment is actually going to result in a lot more people going back to work more quickly than they otherwise would.
ELISE GOULD: Those workers and their families are, all of a sudden, going to lose a vital lifeline without really having any safety net behind them. I think it'll be interesting to see what happens in terms of filling jobs in those states versus the states that have continued to provide that support to workers and their families. And I would be very surprised if we see much difference.
HORSLEY: Cutting off benefits early also means billions of dollars in federal aid is not going to be flowing to those 25 states. Unless that money is replaced in the economy by wages, it could mean a lot less spending power and a blow to the local economies.
SIMON: NPR chief economic correspondent Scott Horsley, thanks so much.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
