Utahns reacted with both celebration and fear on Wednesday after Gov. Spencer Cox announced the state will stop paying higher unemployment benefits in an effort to get people back to work.
The extra $300 a week bonus, supported by federal funding, was added to state unemployment benefits to get people “through the pandemic until our economy could get back to full strength to help those people who had lost jobs,” Cox said at a virtual town hall Tuesday night ahead of the announcement.
“And it was a very important thing,” he added, “and I know it has benefited lots and lots of people.”
But as Utah’s economy has roared back — the Beehive State was one of two in the nation, Cox said, that saw positive economic growth over the past year — the Republican governor said he thought it was time to eliminate those benefits.
The $300 weekly payment, as well as the other federal unemployment pandemic-related programs, will end June 26 in Utah, and benefits will return to pre-pandemic levels in the state.
“Because … we’re continuing those unemployment benefits, it’s getting more and more difficult for [businesses that are hiring] to find workers,” Cox said. “And so you’ve seen that several states, and this is something we’ll be working on here, [have moved] to roll those back, to get more people into the workforce to get those jobs, to get back to employment.”
Cox added that he doesn’t believe the government “should be competing against the private sector,” keeping people out of the workforce, and said that there are many programs available to people who want to receive training to find better jobs post-pandemic.
At least nine other Republican-led states — Alabama, Arkansas, Iowa, Mississippi, Missouri, Montana, North Dakota, South Carolina and Tennessee — will also halt their participation in the enhanced federal unemployment benefits this summer, according to Business Insider.
The unemployment boost will continue to be offered until September in states that don’t withdraw their participation.
‘Cutting off a lifeline’
Currently, 28,000 Utahns are receiving the additional $300-per-week benefit, the governor’s office said in a news release announcing the decision Wednesday.
That extra money has been a “lifeline” for workers like 25-year-old Cameron Colony, who lost his job at an acupuncture clinic when the pandemic hit.
“My wife and I rely on our double income to pay the bills and pay for our rent and such and her sole income was not going to be able to provide it, and unfortunately I’m not able to work in conditions where I might get COVID due to a health condition,” he said in an interview. “And so the unemployment was essentially a lifeline for us to be able to pay our bills and rent.”
With the extra boost from the federal government, Colony receives $425 a week in unemployment after taxes, a figure that ends up being higher than he was making at the clinic.
He said he’s been applying for jobs and looking for work, as is required to be eligible for the benefits, and he’s hoping he’ll be back in the workforce soon enough that he won’t be impacted by the end of the added unemployment benefit in June.
“But I’m extremely disappointed because I know there are many that aren’t in the same situation I am, where I am able to get back in the workforce,” he said. “It just seems like it’s cutting off a lifeline for people who need the lifeline.”
Krista Bowers, 56, said Cox’s announcement sent her into a full on “panic” on Wednesday, as she struggled to figure out what would happen once she lost the federal benefits.
The Salt Lake City resident, who’s making $511 a week on unemployment, said she wants to work again and has been applying for jobs frequently. But she’s had difficulty finding a position that will accommodate her disability and her ineligibility for the vaccine based on her medical condition, she said.
And the self-employed worker is afraid for what will come after June 28, when she’s no longer eligible for unemployment payments.
“I don’t know what will happen,” Bowers said in a phone interview. “I don’t have a very understanding landlord. I’ll be on the street, I’m afraid.”
The Salt Lake Tribune received documentation from both Bowers and Colony confirming their unemployment benefit status.
After the announcement from Cox, the Utah Democratic Party also criticized the move to end the federal unemployment benefit boost early and accused the social media savvy governor of being “all talk, all friendly on Twitter” and then “making the wrong choices.”
“Gov. Cox is failing Utah and our neighbors by ending pandemic unemployment benefits,” the party said in a tweet. “COVID-19 is far from over, and treating it like it is will only exacerbate it.”
‘I can’t get my workers back’
But Cox’s announcement was met with praise from members of the business community on Wednesday — including from Salt Lake Chamber President and CEO Derek Miller, who noted a “significant need for new employees” across a “variety of industries.”
“The challenge our economy currently faces is not the scarcity of well-paying jobs but the lack of workers,” he said in a statement included in the governor’s news release. “For our state to remain a national economic leader and for our communities to be prosperous, we need to normalize the labor market by assisting those currently unemployed to find opportunities to rejoin the workforce as soon as possible.”
Utah’s restaurant industry has been struggling to find employees as they reopen. The building industry has been hit hard by the labor shortage as well.
Rob Moore, CEO of Salt Lake City-based Big-D Construction, one of the region’s largest builders, said that enriched unemployment payments and pandemic-relief checks had worsened an existing labor shortage in the sector, just as demand for residential and commercial construction is breaking records.
”I talk to business guys every day that say, ‘I can’t get my workers back,’ " Moore said. “They’re being paid $300 a week and they’re getting paid unemployment, and they’re getting a stimulus check. They don’t want to come to work.”
The CEO said he had made that case repeatedly to state leaders and members of Utah’s congressional delegation in recent weeks.
Utah’s construction industry has a 2.4% unemployment rate among workers who qualify for jobless insurance, according to data from the Department of Workforce Services. Roughly 2,655 construction workers in the state are currently filing ongoing unemployment claims.
It’s unclear how many of those workers might return to the labor force when the added unemployment stipends are canceled in late June.
Utah Sen. Mitt Romney also expressed support for the decision on Twitter, stating Wednesday that “paying people more money not to work disincentivizes work, plain and simple.”
“Increased unemployment benefits are leaving employers struggling to staff up,” he continued. “I applaud @GovCox for this decision—it’s time we reopen our economy.”
‘The right step to make’
Cox’s decision has been in the works for days. A spokesperson for the Department of Workforce Services acknowledged there have been discussions about what the next step in the process would be.
“Utah has a great unemployment rate. We’re one of the best in the nation right now,” said department spokesperson Jared Mendenhall. “We’re seeing a great economic recovery.”
Utah entered the pandemic last year with a 2.7% unemployment rate, and the state is emerging from it with a 2.9% rate, which is essentially unchanged. The only other state that has seen a net job gain during the pandemic is Idaho.
At the height of the economic downturn, Utah had about 140,000 people on unemployment benefits. Now, that number is under 30,000.
Stepping away from the federal pandemic unemployment assistance was a “natural step,” said Kevin Burt, assistant deputy director of the Department of Workforce Services, with Utah’s low unemployment rate, and as businesses reopen and vaccines have become readily available.
But there’s no evidence to indicate that people have been refusing job offers in mass in order to maintain their benefits, Burt said. If someone did decline work, he said, they would no longer be eligible for the funds.
“The decision was not about people refusing work,” he said. “It was more about is this the right step to make? And we think it is the right step to make given Utah’s circumstances.”
He notes that while there are 28,000 people currently receiving the federal government boost, there are 50,000 jobs available right now on the Department of Workforce Service’s website, jobs.utah.gov.
And the governor’s office says the state is prepared to help businesses fill those slots and to help people who want to reenter the workforce find a new position.
Casey Cameron, the Department of Workforce Services’ executive director, said in a statement that job seekers can receive “career coaching, education assistance, job search help and more, either online or in person at an employment center.”
Other programs are available to people who continue to struggle through the pandemic, including rent, utility, food and medical assistance. More details can be found at jobs.utah.gov.
Burt encouraged people who are struggling to “reach out to us” for help.
— Tribune reporters Bryan Schott and Tony Semerad contributed to this report.