FGA Research Shows How Ending Unemployment Expansions Can Kickstart America’s Economic Comeback

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Today, the Foundation for Government Accountability (FGA) released a paper comparing the current labor shortage to labor shortages seen during the Great Recession. 

The paper explains how extended benefits used to combat COVID-19-related unemployment closely resemble the Emergency Unemployment Compensation (EUC) program that followed the Great Recession. Both programs extended or increased unemployment benefits and allowed many Americans to collect more money on welfare than they received from their previous jobs.

FGA research found that following the cut of the EUC in 2014, three million jobs were added to the economy and there was an increase of employment by 2.5 million workers. Similar results have been seen in states that have withdrawn from pandemic-related unemployment programs with the number of new unemployment claims dropping by 45 percent and work search activity jumping to nearly 30 percent. 

“In the past and now, ending unemployment extensions is a proven way to kick our country’s economy into overdrive. The employment miracle economists saw in 2014 is just around the corner for us now that the unemployment expansion expiration date is fast approaching,” said Jonathan Bain, Research Fellow at FGA. “Policymakers should learn from the Great Recession and the experience of the 26 states that have opted out of unemployment benefits that the only way to get our economy back on track is to end expanded unemployment benefits.”

Opt-out states continue to see decreased unemployment claims. With the end of expanded unemployment benefits, states that chose to continue unemployment benefits will see the economic recovery they delayed by their stubborn continuation of destructive policies.

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The Foundation for Government Accountability is a non-profit, multi-state think tank that specializes in health care, welfare, work, and election reform. To learn more, visit https://TheFGA.org