The employment situation is slowly improving—as we saw yesterday, with first-time jobless claims falling to the lowest level since the pandemic hit. 

Meanwhile, the generosity of unemployment benefits is about to decline in some states. So far, more than twenty Republican governors have announced they’ll reject federally-funded pandemic unemployment benefits for their residents starting next month. The move is designed to help employers hire workers, by making it less financially attractive for people to remain on unemployment. 

Around 3.6 million people would be affected by states cutting off $300-a-week in federal unemployment payments, according to Andrew Stettner at the Century Foundation. Some of the long-term unemployed and gig workers won’t be eligible for any jobless benefits. 

“It is going to undercut the economic recovery,” he said.

Stettner estimates there’ll be $22 billion less in federal funds flowing to the unemployed, to spend at businesses in those states.

Local businesses want the unemployed to take unfilled jobs. But Richard Wahlquist at the American Staffing Association said some people are hesitant to return to work right now.

“In some cases it’s just fear of contracting COVID. In other cases they’ve got school-age children. To those that have become vaccinated, they have concerns about how safe workplaces are,” he said.

Wahlquist predicts as federal unemployment benefits get cancelled or run out over the summer, and schools reopen in the fall, more people will return to work.