Louisiana became the first Democrat-run state to stop participating in the federal government’s enhanced unemployment benefits.
Gov. John Bel Edwards (D-LA) signed legislation that would bring Louisiana out of the unemployment insurance program on July 31. However, it boosts the state-offered maximum weekly unemployment benefit from $247 to $275 per month in a provision that takes effect next year.
Louisiana joins most Republican-led states in planning exits from the augmented unemployment insurance program. As Idaho Gov. Brad Little (R-ID) explained, “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.”
Louisiana’s decision also comes as the United States saw an unexpected increase in weekly jobless claims. Driven almost entirely by Pennsylvania and California, the nation’s uptick in claims exceeded economists’ forecasts by nearly 15%. Along with other blue states, both Pennsylvania and California have not yet announced exits from the enhanced federal benefits, which expire on September 6.
In a Wednesday press conference, Federal Reserve Chair Jerome Powell cited slow job market recovery — encouraged by heightened unemployment benefits — as a noteworthy economic challenge for the United States.
“Factors related to the pandemic, such as caregiving needs, ongoing fears of the virus, and unemployment insurance payments appear to be weighing on employment growth,” Powell remarked. “These factors should wane in coming months against a backdrop of rising vaccinations leading to more rapid gains in employment.”
According to Moody’s Analytics and CNN Business’ Back-to-Normal Index, Louisiana ranks 39th in the nation for economic recovery from COVID-19 and the lockdown-induced recession. Its economy is performing at 87% of pre-recession levels.
Meanwhile, the economies of South Dakota and Florida are respectively operating at 106% and 101% of pre-COVID strength. Rhode Island, Nebraska, and Idaho — which were among the first states to rescind their lockdown orders — are functioning at 100% of pre-recession capacity.
“We will never do any of these lockdowns again, and I hear people say they’ll shut down the country, and honestly, I cringe,” noted DeSantis in August. “And at best, what the lockdown will do is delay. It does not reduce the ultimate mortality… it creates a lot of other problems with mortality that a lot of people don’t necessarily focus on.”