A growing number of states say they will use federal funds to offer “back to work bonuses” for employees who return to the workforce, putting into practice an idea congressional Republicans have been pushing for at least a year.
Montana Gov. Greg Gianforte plans to use $15 million from his state’s share of President Biden’s $1.9 trillion coronavirus relief package to provide $1,200 bonuses to people who were on unemployment and then accepted a job and completed at least four weeks of paid work.
Mr. Gianforte was the first governor to announce his state will be ending a $300-per-week federal boost to unemployment checks that the relief package extended into early September.
His office told The Washington Times that the governor has received “tremendous support” from businesses on the bonuses, including from companies that were having trouble finding workers and that are now receiving applications.
Arizona, Oklahoma, New Hampshire and Connecticut are among the states that have announced similar programs in recent weeks.
Arizona Gov. Doug Ducey’s office likewise said his newly announced program, which provides $2,000 bonuses for eligible people who complete 10 weeks of work after leaving unemployment, has been well-received across the state.
Arizona set aside $300 million for the bonuses and is using money from the $1.9 trillion relief package.
All of those states, save Connecticut, are led by Republican governors who also have announced that their states will soon end the $300-per-week federal boost to regular state unemployment checks, saying the supercharged benefits are discouraging people from seeking work amid reported labor shortages in some industries.
“I think it’s, in one sense, a worthwhile experiment,” Brian Marks, who teaches economics at the University of New Haven in Connecticut, said of the return-to-work incentives. “However, one has to take into account, and one will have to do the analysis, that some people will be hesitant to go back to work because of health concerns or the absence of child care, let’s say.”
Connecticut Gov. Ned Lamont said Tuesday some people are still hesitant about re-entering the workforce when the COVID-19 crisis hasn’t been completely resolved.
He touted his state’s new $1,000 return-to-work bonus program for the long-term unemployed, as well as free day care and child care, as initiatives to lure more people back to work.
“I’d like to think the $1,000 bonus helps a lot. I’d like to think the free child care will help a lot and free transportation in many cases — just giving you that extra nudge,” Mr. Lamont, a Democrat, said on Fox Business Network.
The White House has argued that health concerns and a lack of access to child care are among key factors in what could be holding people back from returning to the workforce as the economy starts to open up.
Asked about the new bonus programs, a White House official said there’s no “one size fits all” solution for recovering from the pandemic.
“The American Rescue Plan provided states with flexible funds that allow them to experiment with ways to get their economies going again, and the announcement from Connecticut and other states … reflects that,” the official said. “Americans want to get back to work, and, as the president announced recently, we need to be doing everything we can to connect Americans with good paying jobs — and address barriers like a lack of child care — as the economy reopens.”
A new study co-authored by Jason Furman, a former top economic adviser in the Obama administration, questions how much a lack of child care and shuttered schools contributed to the roughly 8 million jobs the economy lost from February 2020 to April 2021.
The study found that while school closings and child care certainly created additional stress for parents and children, employment of parents with young children did not decline at a higher rate during the pandemic.
“This means that the factors responsible for the slow employment recovery and depressed labor supply are issues that are not exclusively related to the struggles of working parents, such as the continued concern about the threat of getting COVID-19 at work or expanded unemployment insurance benefits and eligibility,” wrote Mr. Furman, now a senior fellow at the Peterson Institute for International Economics, Melissa Kearney of the University of Maryland, and Wilson Powell III of the Harvard Kennedy School.
The White House said the study is generally aligned with the administration’s position that mothers face real burdens while trying to balance work with child care.
“Importantly, mothers’ participation rates began rising again after November 2020, aligning with school re-openings and aggressive vaccine distribution, and, as the paper shows, have almost re-converged with women without children,” an official said. “So, while this report is [a] useful reminder that many people with and without kids still face barriers to work, our view is that access to affordable child care continues to be a factor, and it remains a key policy target for our near and longer-term policies.”
House Minority Leader Kevin McCarthy of California and other House Republicans this month had encouraged states to use back-to-work bonuses, which the GOP has been floating since last year.
“We encourage you to review these new state initiatives and ideas, including the back-to-work bonus strategy, which benefits both workers and employers and can serve as an effective use of the expanded money that each state received,” they said in a letter to governors.
Idaho had announced its own bonus program last year. State officials credited the initiative, in part, for the state’s low unemployment rate compared to many other areas around the country.
Idaho’s unemployment rate in April was 3.1%, well below the national 6.1% rate.
Alex Adams, the budget and regulatory chief for Idaho Gov. Brad Little, said the state paid out more than 27,000 bonuses totaling $36 million, which came from the state’s share of funding from a coronavirus relief package Congress passed in March 2020.
“We saw it as a conservative principle of pay people [to] work, not pay them to not work,” Mr. Adams said at a congressional hearing this year. “We averted a crisis [in] our unemployment insurance trust fund, and [we’re] one of the few states that actually grew our trust fund during the pandemic.”
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