Groups call on Abbott to end federal extension of unemployment benefits

May 14, 2021

1 3 minutes read

The Texas Association of Business, along with 37 business associations and chambers of commerce, have asked Gov. Greg Abbott and Chairman of the Texas Workforce Commission Bryan Daniel to end Texas’ participation in the federal supplemental unemployment benefit program.

Employers statewide argue the additional $300 weekly federal unemployment payment is the biggest barrier to filling multiple job openings because those receiving them receive more or at least enough money to stay home than work.

Small businesses nationwide are reporting a record number of job openings, indicating a “rising evidence of labor shortages,” economist Lawrence Summers said in a recent Bloomberg interview.

“You can see that in small business surveys, where we’re at record levels in terms of difficulties of finding labor. You can see that in terms of the data on job vacancies, which are at or near record levels,” he added.

Summers, who served in both the Clinton and Obama administrations, argues the extended federal supplemental benefits are a “misdesigned” Biden administration policy “that could have far-reaching economic implications.”

“If we give people more money for not working than they were getting when they were working, then they’re going to stay on the sidelines,” he said.

“Expanding unemployment benefits during a recession has a predictable result: slower employment recovery,” Texas Tech economics professor Alex Salter told the Foundation for Economic Education earlier this year.

“With COVID-19 on the decline and job openings on the rise, we believe it is time for Texas leaders and the Texas Workforce Commission to re-examine unemployment benefits, unemployment insurance work-search requirements and Texas’s role in federal supplemental unemployment benefits,” the group of Texas businesses wrote in a letter to Abbott and Daniel.

“Texans want to get back to work, back to school, and back to normal. Employers believe that supplemental UI benefit payments from Washington is disincentivizing work and resulting in many good Texas jobs going unfilled,” they argue. “Most Texans would agree that a good job is better than a government program, especially now that our economy is rebounding.”

Since March 14, 2020, the Texas Workforce Commission has paid out $49.2 billion in unemployment benefits to Texans, including three pandemic emergency benefits of $22.2 billion (PUC since April 13, 2020), $5.1 billion (PUA since April 14, 2020) and $5.2 billion (PEUC since April 14, 2020).

The state has drawn a net of $6.9 billion in Title XII advances since June 9, 2020, and received more than 8 million claims for unemployment benefits since March 14, 2020.

To help address the “serious risk to our recovery and to encourage productivity and lower unemployment,” the group is asking the Texas Workforce Commission to promote through social media, traditional news, and online platforms, that Texas companies are hiring, jobs are available and unemployment beneficiaries are required to search for work as a condition of receiving benefits.

To date, 13 states have taken steps to exit the federal program, including Iowa, Georgia, Missouri, Montana, South Carolina, and Wyoming.

The associations and chambers urging Texas to follow suit include: