By sending a letter to the U.S. Department of Labor Monday, Abbott officially pulled Texas out of the federal government’s COVID-19 unemployment relief program. Jobless Texans will stop receiving their extra $300 a week from Uncle Sam effective June 26, due to federal rules that require state governments to give at least 30 days notice before leaving the program.
Over a million jobless Texans would miss out on the extra $300 a week once Texas leaves the federal program according to The Century Foundation, a progressive policy think-tank.
Abbott is hopping on the wave of other states whose Republican governors decided to prematurely pull-out of the federal assistance program, which is set to expire nationwide in September if Congress doesn’t approve additional funding. So far, 20 states have turned away the extra benefits from the Federal Pandemic Unemployment Compensation program after business groups complained that the additional cash may be making some folks less likely to try and find jobs.
The Texas Business Association and nearly 40 other groups representing Texas business interests wrote Abbott a letter last week asking him to opt-out of the extra unemployment payments. The additional cash, they argued, “is disincentivizing work and resulting in many good Texas jobs going unfilled.”
In his letter to U.S. Secretary of Labor Marty Walsh, Abbott claimed that “The Texas Economy is thriving and employers are hiring in communities throughout the state.”
“In fact, the amount of job openings in Texas is far greater than the number of Texans looking for employment, making these unemployment benefits no longer necessary,” he argued.
Abbott touted that “there are nearly 60 percent more jobs open (and listed) in Texas today than there was in February 2020, to the month before the pandemic hit Texas” in a statement celebrating his decision to pull-out of the federal benefits. That said, Texas’ unemployment rate is still at 6.9 percent — higher than the 4.9 percent rate in March 2020 and nearly double Texas’ all-time low jobless rate of 3.5 percent in May 2019.
The Texas Democratic Party did not immediately respond to a request for comment from the Houston Press about Abbott’s decision to turn down the extended jobless benefits.
During a Thursday White House press briefing, President Joe Biden’s Press Secretary Jen Psaki argued that Republican governors who had pulled out of the extra federal jobless benefits were ignoring “the actual issues at play here” about why so many U.S. residents are still out of work, like “people needing to address things like childcare, [or] being fearful about going back to work” before they could get vaccinated.
She said the Biden administration isn’t buying the argument that the extra cash payments are somehow keeping able-bodied people from getting new jobs.
“We have not seen that as a widespread driving factor in people not going back to work,” Psaki said.
Annie Spilman, director of the Texas branch of the National Federation of Independent Business, thanked Abbott for his move Monday, claiming it could help companies in the state fill more open positions. “This was a difficult decision, but we believe it is the right one for Texas,” Spilman said.
“Today, our economy is stronger, but job openings outnumber job applicants,” she said, citing a recent NFIB report that found 44 percent of small businesses nationwide have job openings they supposedly can’t fill.
“That’s making it hard for businesses to meet customers’ needs and slowing the state’s economic recovery. NFIB believes that ending the supplemental federal unemployment assistance will encourage more people to return to work,” Spilman said.
Texas Democrat and former presidential candidate Julián Castro blasted Abbott’s decision on Twitter Monday.
Gov. @GregAbbott_TX believes that the one million Texans who are still out of work are just lazy.— Julián Castro (@JulianCastro) May 17, 2021
He’s now blocking a $300 weekly payment to unemployed Texans who are struggling to pay rent and buy groceries—even though it costs our state nothing. Unbelievable. https://t.co/v7ebCNfmb6
Andrew Stettner, the Century Foundation policy expert who authored the group’s unemployment report, tweeted Monday that he thinks the decisions of Abbott and his fellow Republican governors to leave the federal unemployment aid program are less about getting people back to work than they are about the political optics of slapping away another Big Government handout.
“This is about ideology folks, not worker shortages,” Stettner said.