Six states offer return-to-work bonuses for unemployed workers

·3 min read

A growing number of states — including four that are canceling pandemic unemployment programs early — are offering jobless workers up to $2,000 when they get a job.

It's the latest effort by governors to combat concerns over labor shortages, but some experts say it may not work.

Montana, Arizona, Oklahoma, and New Hampshire are offering the return-to-work bonuses as an alternative to the unemployment programs that they're eliminating later this month and in early July. The federal programs expire September 6. Colorado and Connecticut —which are not opting out of the programs — also have announced such initiatives.

Arizona — which plans to cancel the unemployment programs on July 10 — is providing the biggest one-time bonus of $2,000 for those who get a full-time position and complete 10 weeks of work. The bonus is $1,000 for workers who accept a part-time offer.

“In Arizona, we’re going to use federal money to encourage people to work…instead of paying people not to work,” Governor Ducey said in a statement in May, announcing the cutoff of the federal programs and the bonus initiative.

Arizona's bonus is still smaller than the $2,700 in benefits workers would get if the extra $300 in weekly benefits did not prematurely end.

The return-to-work bonus varies by state and can be different for full-time and part-time workers. Requirements also differ.

For instance, Montana and Oklahoma are both offering a one-time payment of $1,200, while Colorado is providing $1,600 to workers who began their jobs in May and $1,200 to the ones who start work in June.

Connecticut and New Hampshire both will pay $1,000 to unemployed workers taking jobs, but New Hampshire's payment for part-time workers is only $500. Part-time workers in Connecticut get the full $1,000.

The weeks workers need to be on the job before receiving the bonus ranges between four and 10 weeks, depending on the state. In Oklahoma, only the first 20,000 workers to take a job get the bonus. And in New Hampshire, only workers paid $25 or less qualify for the bonus.

NEW YORK, NEW YORK - JUNE 04: People walk by a Help Wanted sign in the Queens borough of New York City on June 04, 2021 in New York City. The U.S. economy added 559,000 jobs in May, bringing the unemployment rate down to 5.8 percent from 6.1 percent. Despite the positive economic news, millions of Americans are still looking for work or are in need of financial, food, and housing assistance. (Photo by Spencer Platt/Getty Images)
People walk by a Help Wanted sign in the Queens borough of New York City on June 04, 2021 in New York City. (Photo by Spencer Platt/Getty Images)

'Don't fix the systemic issues'

More states may start paying bonuses this summer. North Carolina and New York have recently introduced legislation for return-to-work bonuses. Neither plans to opt out of the federal jobless programs early.

Kentucky Gov. Andy Beshear said he plans to unveil a similar incentive for jobless workers who accept jobs, while also keeping the unemployment programs in place.

Read more: Can your employer force you to get vaccinated? Sometimes.

In the 25 states that have eliminated or plan to eliminate those federal jobless benefits, more than 4 million workers will see their benefits slashed by at least $1,200 a month in June or early July, losing a total of $22.1 billion in benefits, according to estimates by the Century Foundation.

In the four states canceling the benefits but also offering bonuses, the return-to-work incentives are lower than the money workers would have received if the jobless programs continued until their expiration. Additionally, the one-time payment is insufficient to address the issues keeping workers out of the workforce or to fill gaps in the states' unemployment programs, according to Jenna Gerry, senior staff attorney at the National Employment Project.

"Return-to-work bonuses don't magically make affordable, quality childcare available, they don't clear the health conditions of individuals and their families or quicken the return of industries that have all but disappeared during the pandemic," she told Yahoo Money. "They don't fix the systemic issues that are keeping people from returning to jobs."

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Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova

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