Iowa becomes latest state to cancel $300 federal unemployment benefit, cites labor shortage

Nation and World

Credit: (WHO-TV)

DES MOINES, Iowa – Gov. Kim Reynolds announced Tuesday that Iowa will join several states ending pandemic-related federal programs that include extra payments to unemployed workers.

Reynolds said on Tuesday that the additional benefits are causing a labor shortage in the state and are hindering the state’s economy — a charge echoed by conservative groups and Republican governors in several other states.

Mississippi announced on Monday the state will end the extra unemployment benefit effective June 12 and Arkansas announced on Friday its plans to end the additional payments. Montana and South Carolina both announced similar plans last week.

The state will end the federal boosts, including an additional $300-a-week unemployment payment, Reynolds said in a news release. That benefit was scheduled to run through early September.

A statement released by the governor’s office Tuesday cited the state’s strong economy for the decision which she said is also designed to address the severe workforce shortage in Iowa, according to WHO-TV.

“Regular unemployment benefits will remain available, as they did before the pandemic, but it’s time for everyone who can to get back to work,” Gov. Reynolds said. “This country needs to look to the future, and Iowa intends to lead the way.” 

The governor also stated that while the payments from the federal government were crucial for Iowans when the pandemic began, they are now acting as a deterrent for people to return to the workforce.

“Now that our businesses and schools have reopened, these payments are discouraging people from returning to work,” Reynolds said. “Our unemployment rate is at 3.7 percent, vaccines are available to anyone who wants one, and we have more jobs available than unemployed people.”

But supporters of the federal unemployment programs point to other factors, including those reluctant to take jobs in service industries that require contact with the public for fear of contracting COVID-19 and parents who don’t have child care.

The federal benefits will end June 12, Reynolds said. Regular, pre-pandemic unemployment benefits will remain available.

The Associated Press contributed to this story.

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