Louisiana Becomes First Democrat-Led State to End Boosted Unemployment

Jobless workers in yet another state will soon see their weekly benefits shrink.

When the American Rescue Plan was signed into law earlier this year, the U.S. economy wasn't in such a great place, and the vaccine rollout had, thus far, been slow.

As such, that relief bill contained a host of provisions designed to help a country in crisis mode. Those provisions included:

• A round of $1,400 stimulus checks that have been hitting Americans' bank accounts since March
• An expanded Child Tax Credit
• Boosted unemployment benefits in the amount of $300 per week through early September

But things have, thankfully, improved since the American Rescue Plan became official. Not only has the jobless rate ticked downward, but widespread vaccinations have allowed states to largely lift restrictions. In fact, many states are actually grappling with a shortage of available workers given the number of jobs that are locally available. And so those states made the decision to pull the plug on boosted unemployment ahead of schedule.

The logic in doing so is that some lower-wage workers earn more on unemployment with that boost in pay than they would at a full-time job. By ending those boosted benefits early, states are hoping to incentivize people to get back into the labor force.

Until recently, it was only Republican-led states that were ending boosted unemployment early. But now, Louisiana will be the first Democrat-led state to follow in their footsteps.

Taking a lifeline away

This week, Louisiana Governor John Bel Edwards signed a bill ending the $300 weekly unemployment boost at the end of July rather than keeping it in place through Labor Day. What this means is that jobless workers entitled to unemployment will continue to collect their regular state benefit, just not the additional money they've been getting each week.

Furthermore, Louisiana will actually be increasing the state's maximum weekly unemployment benefit by $28 beginning next year. But that hardly softens the blow for those who are about to see their weekly income decline by $300.

Part of Edwards' logic in ending boosted unemployment early is that in Louisiana, the school year resumes in August (whereas in other parts of the country, school doesn't start until after Labor Day). As such, he feels that come August, more people who currently don't have jobs will have an opportunity to get back into the workforce without having to worry about childcare.

Edwards also said that jobs are, in fact, coming back to Louisiana. And while he didn't want to pull the plug on boosted unemployment immediately, he feels that ending that program at the end of July is a reasonable and responsible compromise.

Of course, childcare constraints are only part of the reason some people have struggled to get back into the labor force. Not everyone is eligible for a coronavirus vaccine (for example, those recently infected may have to wait), and those who can't get inoculated may be worried about the idea of going to work in person, especially now that mask mandates have largely been lifted.

Furthermore, while jobs have been opening up across the country, this past week, the number of new unemployment claims filed actually rose substantially from the week prior. As such, a lot of people who are counting on that $300 weekly unemployment boost may soon be in for a financial shock. And now that one Democrat-led state is ending that boost, it's possible that more will follow suit.