From the beginning of the COVID-19 pandemic in early 2020, the federal government has distributed aid to Americans, trying to stimulate the economy and reverse the tide of business closures. One of the largest and most controversial of these programs has been a series of federal unemployment benefits, totaling up to $300 per week, to workers laid off or put on furlough because of the pandemic.
$300 per week amounts to over $15,000 per year, a cost substantially higher per individual than all of the stimulus measures – totaling $3200 for eligible recipients – throughout the pandemic. And while there is no doubt that the payments have helped millions of families, they have also come under fire for their exorbitant cost and their possible effect on unemployment. Fiscal conservatives have suggested that the payments have de-incentivized work; although the link between unemployment payments and unemployment rates has been questioned by a study from the Federal Reserve Bank of San Francisco, twenty-five states so far have used this as a rationale for voluntarily ending the payments. (Qualifying residents in the other twenty-five states will receive their benefits until early September, when the money runs out.)
However, while voluntarily ending cash payments from the federal government might or might not be good for the economy, it has the potential to antagonize many workers who would otherwise receive extra cash. Therefore, a number of states have replaced the unemployment benefits with back-to-work bonuses of up to $2000, to be provided when they find another job.
So far, four states – New Hampshire, Montana, Oklahoma, and Arizona – have offered such bonuses as a replacement for federal unemployment payments, rolling federal funds together into one larger check. Colorado and Connecticut have also announced return-to-work bonuses, although they have not opted out of the federal funds program.
The payments will vary by state. Montana, Colorado, and Oklahoma have all offered $1200 bonus payments, while Connecticut and New Hampshire have only offered $1000. Arizona’s are the most generous; the Grand Canyon State has offered $2000 payments for taking a full-time job, and $1000 payments for a part-time job. All of the programs require continuous work of between four and ten weeks before the bonuses are paid. Some have also attached other conditions to the programs; for instance, New Hampshire has cut the bonus off at those making over $25 per hour, while Oklahoma has restricted the bonus to the first 20,000 new hires.
Other states have expressed interest in these programs, including North Carolina, Kentucky, and New York, although these three states have not indicated they plan to opt out of the federal jobless program.
Trevor Filseth is a current and foreign affairs writer for the National Interest.