While waiting for his number at an unemployment event in Tulsa (Oklahoma) on July 15, 2020, a man fills in paperwork. Nick Oxford/The Washington Post/Getty ImagesInsider calculates that states which have ended extra unemployment benefits earlier are experiencing a drop in claims.This trend indicates that GOP governors' plans for more people entering the workforce are paying off.Economists believe that school closings and virus fears play a significant role in slowing down hiring.Check out more stories from Insider's business page.In June, Republican governors cut federal unemployment benefits. While some argued that the move would encourage Americans to return to work, others criticized the federal increase for disincentivizing employment.Early signs indicate that they are getting exactly what they want.26 states will have ended prematurely the $300-per-week federal government expansion to unemployment insurance by the end of July. The Republican governors of all but one state are leading them, while the other is a Democrat who governs the deeply red state of Louisiana. In mid-June, the first rollbacks began. About 4 million Americans will have some or all their benefits reduced before the September deadline.After a dismal jobs report that appeared to confirm anecdotal accounts indicating a "labor shortage", the May boost to UI payments was under intense scrutiny. Economists blame a few factors for the reluctance of workers, including school closings and virus fears. Conservatives have long criticized the enhanced UI program and the concept of a safety net.Recent data on continuing claims shows a significant gap in UI usage between states that have ended the supplement earlier and those that have not. As states started to end UI expansion, continuing claims became more relevant.The continuing claims for both groups of states have fallen by approximately 8% between early June and early July. Compared to this, continued claims in states that allow the UI boost to run until September are almost 3% higher.Continue the storyFlorida was responsible for about half the decline in the week ending July 3. Florida also canceled the federal boost that expired on June 26. Weekly claims data can also be volatile.The employment data shows that governors are likely to cut the supplement sooner than expected. 13 states that lost the most money on their payrolls were able to end the federal UI Enhancement before the rest. Idaho and Utah, the only two states with employment levels above pre-pandemic levels, cut the federal UI enhancement in June. The five states that are the most behind in labor market recovery are all allowing the enhancement to continue through September.However, some economists warn against tying employment to reducing UI payments. JPMorgan economists stated in a July note that there is "little evidence" that the boost will bring back jobless Americans. Insider's Juliana Kaplan reported that the bank had previously noted that the end of the benefit was tied to politics and not economics.In the coming weeks, more information will be available about whether or not the GOP governors are executing their plans as planned. The gap has given them cause to rejoice.Business Insider has the original article.
