Gov. Greg Abbott’s announcement Monday that Texas will stop paying the federally funded $300 in extra pandemic-related weekly unemployment aid as businesses that scaled back or shuttered during the pandemic are reopening could help give the state economy a shot in the arm, the head of the Texas Association of Businesses told members of the local Chamber of Commerce on Tuesday.
“When the pandemic started, it was clearly the right thing to do to have the federal assistance supplement state benefits. We all know how many good people were thrown out of work or furloughed though absolute no fault of their own,” the association’s CEO Glenn Hamer said. “But we’re at a different point right now.”
The extra benefits in Texas will end June 26, Abbott said in a letter to the Biden administration. He joins at least a dozen other governors, all Republicans, who are opting out of the additional federal unemployment benefits this summer.
The money is part of President Joe Biden’s $1.9 trillion stimulus measure approved in March and is set to expire in September. But business groups, like Texas Association of Businesses urged Abbott to opt out early, arguing it was hampering the Texas economy’s rebound.
“Sometimes it’s making sure that you don’t over stimulate the economy. That’s why I believe Gov. Abbott did the right thing,” Hamer said. “It was certainly necessary at the beginning of the pandemic but right now it’s really harming the ability of businesses to scale up and for some small businesses to be at the capacity they need to stay open.”
Texas had an unemployment rate of 6.9% as of March, with Nacogdoches County’s jobless rate at 6.7%.
“In the city of Austin the help wanted signs are all over the place. They’re not for minimum wage jobs,” Hamer said.
Travis County has an unemployment rate of 5.3%.
Help wanted signs are up all around Nacogdoches as well but how much of that is related to extended unemployment benefits and how much can be attributed to the seasonal loss of Stephen F. Austin State University students as workers is unclear.
Abbott also cut off another lifeline called Pandemic Unemployment Assistance, which extended jobless aid to gig workers, self-employed people and others who aren’t traditionally covered by unemployment insurance, the Texas Workforce Commission said. Congress extended those programs through September, but Abbott said they will end for Texans on June 26.
Approximately 344,000 Texans were receiving assistance through the PUA program as of April 30, according to data compiled by economist Julia Coronado, economics professor at the University of Texas at Austin. That number is down from the approximately 563,000 Texans receiving aid through the PUA program to start the year, a sign that Texans have steadily exited the program and returned to work even with the program still in place, Coronado said.
Factors besides the extra money help explain why people who are out of work might be reluctant to take jobs. Government surveys show that some still fear exposure to the virus. Many women, especially working mothers, also left the workforce to care for children still in online school for at least part of the week.
The Associated Press and Texas Tribune contributed to this story.