Arkansas Gov. Asa Hutchinson has directed the state’s Division of Workforce Services to end the state’s participation in the federal supplemental unemployment assistance after June 26.
That means people will soon stop receiving the $300 weekly government supplement. Hutchinson said he’s opting out of the federal benefits because Arkansas has a shortage of workers and he hopes lowering unemployment benefits will encourage people to return to work. But one Arkansas economist suggests it’s not that simple.
A dozen people waited outside the Division of Workforce Services on Monday, each waiting to sort out unemployment assistance. The extra unemployment money provided by the federal government has made all the difference for James Bauldwin.
“I have four kids that it helps,” he said. “To keep food on the table, keep a roof over their head, clothes on my back, it helps a lot.”
Hutchinson said the state’s economy has improved enough that federal benefits should end.
“It makes sense we should be unwinding some of these extraordinary measures that we’ve been counting on to help people through the difficult times,” said Dr. Michael Pakko, chief economist at the Arkansas Economic Development Institute.
Pakko said the generous unemployment money can’t shoulder all the blame for a worker shortage. Some people lack childcare. Others don’t feel safe returning to work. That’s the case for Bauldwin, who used to work in an assisted living facility.
“The people that are trying to get that–most of them actually need it. It’s not because they’re not wanting to go to work. It’ s because it’s helping them so much and they don’t feel safe, they have kids, they have grandparents,” he said.
Bauldwin said he’s looked for jobs in other fields, but they all require experience he doesn’t yet have. He said he feels the pressure to figure something out before the end of June.
“It’s going to hurt us a lot,” he said “A whole lot.”
Pakko said the worker shortage will likely drive wages up, so employers may have to offer more pay to incentivize workers to come back to the job.
Read the original story on the ABC 7 website here.