Gov. Asa Hutchinson said Tuesday he believes cutting pandemic-related unemployment benefits will bring more Arkansans into the labor force, while critics of the decision, which he announced last week, say it will only hurt workers.
On Friday, Hutchinson directed the state Division of Workforce Services to end the state's participation in the $300 weekly federal unemployment assistance supplement after June 26, saying the state needed Arkansans back on the job "so that we can get our economy back to full speed."
About 50,000 Arkansans receive the federal supplement, which was scheduled to end nationwide Sept. 4.
Arkansas was the third Republican-led state to opt out early, following Montana and South Carolina. Since then, GOP governors in Iowa, Mississippi, Missouri, Alabama, Idaho, Tennessee and North Dakota have followed suit.
The decision will stop four federal programs from being administered in the state: Pandemic Unemployment Assistance, Pandemic Emergency Unemployment Compensation, Mixed Earner Unemployment Compensation and Federal Pandemic Unemployment Compensation.
Between when the programs started and the week ending May 8, Arkansans have received more than $2.5 billion through those programs, in addition to more than $445 million in state unemployment benefits.
Hutchinson said cutting the programs will lead to an increased number of Arkansans moving into the workforce, because employers are providing incentives and good wages, but it's hard to compete with the package from President Joe Biden's administration.
"The key thing for everyone that wants to work, they need to understand that if they need help in finding a job, we can provide assistance. If they need assistance in child care, we have more than enough money in child care to provide assistance," the governor said.
Hours before Hutchinson announced his decision Friday, the U.S. Chamber of Commerce called for ending the weekly supplemental benefit to address labor shortages.
"The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market," Neil Bradley, executive vice president and chief policy officer for the chamber, said in a written statement.
The state's Senate Republican Caucus applauded Hutchinson's decision Friday evening.
"We have heard from our constituents and job creators for the last few months about the difficulties of hiring and retaining their workforce. This action today will put more Arkansans back to work and sustain Arkansas jobs for years to come," state Senate Majority Leader Scott Flippo, R-Bull Shoals, said in a written statement issued on behalf of the 27 Republicans in the chamber.
Members of the state's Democratic Party have criticized the move, saying it hurts workers.
"This decision is blatantly paternalistic dismissive and disrespectful. When it comes to economic development, Arkansas is touted as a great place to do business because of our people. Code to treat working people as business wishes or else," Sen. Joyce Elliott, D-Little Rock, said in a tweet Tuesday.
Bruno Showers, senior policy analyst for Arkansas Advocates for Children and Families, said studies haven't shown that the enhanced unemployment benefits discouraged people from working.
A September report from the Federal Reserve Bank of San Francisco found that the primary impact of $600 supplemental payments that were paid from the federal government each week through July was providing households with the income needed to make essential purchases and payments, sustaining overall economic activity and employment.
The study also found that the supplemental payments did not cause job seekers to devote less time and effort to searching for work.
Clarence Elliott, president of the Little Rock chapter of the American Federation of State, County and Municipal Employees, said Tuesday that though none of the 178 city employees he represents were currently not working for reasons other than the pandemic, he felt taking away the benefits from people who are hurting was wrong.
"I'm not advocating giving free money out to people, I'm advocating compassion," he said.