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FGA Research Finds Federal Pandemic-Related Unemployment Programs are Hurting Small Businesses

With wages at an all-time high, it is clear that unemployment benefits have discouraged Americans from returning to work. Labor shortages have also caused many employers to close or consider closing, and it is because of this that FGA urges states to end their participation in federally funded pandemic-related unemployment programs.

Image of Devon Walls By Devon Walls.
Updated May 26, 2021

NAPLES, Fla. (PRWEB) May 26, 2021 - New research from the Foundation for Government Accountability (FGA) found that federal actions that increased and extended unemployment benefits have discouraged Americans from returning to the workforce.

With 8.1 million open jobs, virtually every sector of the economy is struggling from mass labor shortages. Many argue that the labor shortage is due to unlivable wages these businesses offer workers, but FGA research shows that wages are at an all-time high and growing rapidly.

The real problem is that unemployed individuals can collect more in unemployment and other welfare benefits than they can earn from working, can stay on the program for more than a year, and have no expectation to even look for a new job in most states.

Businesses across the country are struggling to fill a record-high 8.1 million open jobs. Congress decision to pay people more to stay home than to work is making filling those jobs virtually impossible, said Jonathan Ingram, Vice President of Policy and Research at FGA. While Congress debates making these disastrous policies permanent, states are charting a different course.

So far, 23 states have recommitted to strengthening their economies by ending the unemployment bonus. Congress should allow the bonus and other pandemic-related programs to expire once and for all, as these programs are harming small businesses that have already suffered greatly due to the pandemic, said Hayden Dublois, Senior Research Analyst at FGA. States are sending a clear message to Congress: Workers should not be collecting more in unemployment and welfare benefits than what they could earn from a well-paid job.

Labor shortages have caused one in three employers to consider closing in the next year if they cannot fill enough open positions. FGA urges states to end their participation in federally funded pandemic-related unemployment programs.

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The Foundation for Government Accountability (FGA) is a nonprofit, multistate think tank that specializes in health care, welfare, work, and election reform. To learn more, visit TheFGA.org.