Almost half of states will cancel pandemic unemployment programs — with Florida the latest to opt out

·Reporter
·3 min read

Florida is the latest Republican-led state to opt out of federal unemployment programs early, increasing the total number of states to 23 that will leave 4 million workers with little to no benefits next month.

"Florida’s employers are also seeing employment growth, as more Floridians, including some who completely left the workforce, are now eagerly reentering the workforce," Dane Eagle, secretary of the Florida Department of Economic Opportunity said in a press release on Monday. "Transitioning away from this benefit will help meet the demands of small and large businesses who are ready to hire and expand their workforce."

Florida is canceling only the extra $300 in weekly unemployment benefits, while most of the other states also plan to eliminate the Pandemic Unemployment Assistance (PUA) program available to contractors and gig workers along with the Pandemic Emergency Unemployment Compensation Program (PEUC) that provides additional weeks of benefits. 

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Florida's unemployment rate increased to 4.8% in April, still down from its pandemic peak of 14.2% but higher than its pre-pandemic level of 3.3%. Starting June 26, around 420,00 workers in Florida will lose around $3,000 in additional unemployment benefits. Federal programs are set to expire on September 6 nationwide.

"By all accounts, 100% of federal unemployment aid has been immensely effective at stopping any increase in poverty during the pandemic and supporting the predominantly low-wage, people-of-color workforce that has been left out of a dramatic divided economy," Andrew Stettner, an unemployment insurance expert and senior fellow at the Century Foundation, told Yahoo Money. "Now, these families will have little or nothing to turn to as they scramble to find decent, stable, and safe employment — and an open child care center for their kids."

Around 4 million workers in those 23 states will see their benefits slashed or eliminated altogether starting mid- or late-June. They stand to collectively lose $27.3 billion in benefits, averaging out to potentially thousands of dollars per worker, according to an analysis by the Century Foundation. That's money that also won’t flow into those states’ economies.

'Have the hardest time finding a job'

The move to cancel federal programs gained steam among Republican governors following April's disappointing jobs report. House Republicans including House Republican Leader Kevin McCarthy (R-CA) urged all GOP governors to opt out of the federal programs in a letter earlier in May. 

Maryland, Massachusetts, Nebraska, and Vermont are the only states with GOP governors that have not yet canceled the federal programs.

LARKSPUR, CALIFORNIA - APRIL 02: A customer walks by a now hiring sign at a BevMo store on April 02, 2021 in Larkspur, California. According to a report by the Bureau of Labor Statistics, the U.S. economy added 916,000 jobs in March and the unemployment rate dropped to 6 percent. Leisure and hospitality jobs led the way with 280,000 new jobs followed by restaurants with 176,000 jobs and construction with 110,000 new positions. (Photo by Justin Sullivan/Getty Images)
A customer walks by a now hiring sign at a BevMo store on April 02, 2021 in Larkspur, California. (Photo by Justin Sullivan/Getty Images)

Arizona, Montana, New Hampshire, and Oklahoma are the only states so far of the 23 to offer a one-time return-to-work payment between $1,000 and $2,000, using money from the American Rescue Plan.

The cut-off in benefits will disproportionately hurt people of color in many states, according to Stettner. Two-thirds of unemployment insurance recipients in Mississippi are Black, while around half in South Carolina and Alabama are Black. The percentage of Black Americans relying on unemployment in those three states is at least three times higher than the national average of 18%.

"We know in the southern states, people of color — Black workers in particular — are the majority of people on benefits," Stettner said. "They're the ones that will have the hardest time finding a job because of discrimination and also they're the ones who were hit by COVID the hardest."

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Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova

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