Why Iowa State canceled $300 federal unemployment benefit?

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On Tuesday, the Governor of Iowa Kim Reynolds announced that Iowa will join several states ending pandemic-related federal programs including extra payments to unemployed workers. She said the labor shortage issue in the state caused by additional benefits is severely deterring the state’s economy. Point to be noted that it was a charge echoed by conservative groups and Republican governors in several other states. On Monday, Mississippi also announced that the state will end the extra unemployment benefit effective 12^th June and Arkansas announced its plans on Friday to end the additional payments. Last week, South Carolina and Montana announced many similar plans. Reynolds issued a press release and said the state will end the federal boosts, including an additional $300-a-week unemployment payment.

It is noteworthy that the benefit was scheduled to run through early September. On Tuesday, WHO-TV reported the governor’s office released a statement that cited the strong economy of the state for decision. It also aims to address the critical workforce shortage in Iowa. Governor Kim Reynolds said, “Regular unemployment benefits will remain available, as they did before the pandemic, but it’s time for everyone who can get back to work. This country needs to look to the future, and Iowa intends to lead the way. Now that our businesses and schools have reopened, these payments are discouraging people from returning to work”.

Reynolds added, “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”. She also pointed out that they are now acting as a deterrent for people to return to the workforce while the payments from the federal government were crucial for Iowans when the pandemic started. But supporters of the federal unemployment programs pointed to other factors, including those reluctant to take jobs in service industries that need contact with the public for fear of contracting COVID-19 and parents who don’t have child care. The federal benefits will end on 12^th June, but pre-pandemic unemployment benefits will remain available.