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The State of Missouri is the first state to join the Extended Benefits program and then drop out voluntarily. Why would a state reduce the unemployment benefits available to its citizens when it is the federal government that is footing the bill? Politics. This is a political statement designed as a show of self-sufficiency and as statement for federal government to stop spending money on long term unemployment benefits.
Consequences
According to estimates, this change in unemployment benefits will affect over 34,000 workers who will no longer receive Extended Benefits. 10,000 have been cut off from benefits immediately and 24,000 who would otherwise be eligible will not receive EB payments. This will mean $105 million in benefits that will not be available to unemployed workers.
Other States
Missouri is not alone among states that are not requesting funds from the federal Extended Benefits program. Arkansas, Louisiana, Montana, Oklahoma, Utah, Mississippi and Maryland have also decided to not join the program, but Missouri is the first to join and then opt out.
This is a matter of principle. Republicans argue that unemployment benefits are too high for a country with a climbing deficit, Democrats reason that a stimulus is required to help the most vulnerable find work and get out of financial difficulties. This is similar to the Republican’s argument that the wealthy, those more likely to invest in new jobs, need tax cuts as a way to stimulate the economy and create more jobs.
Sadly, this ideological struggle is not helping the thousands of unemployed workers (over 9 percent of all workers) who are still searching for employment.
Other states have opted for a different route. They have accepted the EB program but have decided to reduce their state Unemployment Compensation program. This reduces cost of UI on the state while accepting federal handouts. States who have done this include, Florida, Massachusetts, Michigan and Oregon.
Supporters of cancelling unemployment aid from the federal government feel extended benefits stifle self-sufficiency and promote laziness. Of course, many unemployed workers and and union leaders beg to differ. In states like Mississippi, where unemployment rates have remained so high during so long (over 9 percent for two years) can make it hard for the most enthusiastic of work searchers to find work.
A similar scenario occurred in South and North Carolina. North Carolina had the opportunity to pass a law that would allow the eligibility requirements for the State EB program to continue but preferred to let the deadline pass. In South Carolina, however, legislation was passed so the EB could continue despite the unemployment rate having dropped three months in a row, which is the most usual trigger for EB benefits to end.
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