April jobs report sparks debate over unemployment benefits

Yahoo Finance’s Denitsa Tsekova breaks down states cancelling federal unemployment benefits and the White House taking steps to help Americans return to work.

Video Transcript

ALEXIS CHRISTOFOROUS: Turning now to the job market. And more states are canceling the federal unemployment program, including those extra $300 in weekly benefits. The White House appears to be doubling down on its efforts to make sure that workers don't refuse jobs just to stay on those benefits.

Yahoo Finance's Denitsa Tsekova joining us now with more. What can you tell, Denitsa?

DENITSA TSEKOVA: Well, as we know, there was a lot of talk about worker shortage. But the most recent data we have, the disappointing jobs report from Friday and then the JOLTS reports from today, a lot of people say there are some indicators for worker shortage. And this coincides with the national and statewide calls to cancel unemployment benefits.

As of today, we have six states. So we have Alabama, Arkansas, Mississippi, Iowa, Montana, and South Carolina, all those six states have announced plans to cancel federal unemployment benefits. Some of the benefits included are the extra $300 per week. And then we also have the Pandemic Unemployment Assistance Program. That program provides benefits to contractors, gig workers, and others who are originally not eligible for unemployment insurance.

Biden and the White House have rejected those claims. They say that more generous unemployment benefits don't lead to that worker shortage that we may be seeing. But yesterday the president directed the Secretary of Labor to increase some of the requirements for getting the unemployment benefits and specifically, the work search criteria.

So currently, 29 states require you to show that you're actively searching for a job while receiving unemployment benefits. And the president is trying to make this a requirement for each and every state. Work search criteria varies a lot state by state. For example, it could be for me to prove that I applied for one to five jobs a week in order to get those benefits. And I may have to prove that on weekly or monthly basis.

To the workers that are going to lose their benefits, this could have a really big impact. We're talking about $4,500 of benefits for the time that the benefits are canceled. Only one state, so we only have Montana that is that ending the benefits but giving a one-time bonus to return to work. They're giving a $1,200 bonus to return to work. But the rest of the states are offering no bonuses at all.

And originally, all those programs are running through September 6. So workers are losing up to 12 weeks of unemployment benefits.

ALEXIS CHRISTOFOROUS: All right. We're going to leave it there. Thanks for that reporting, Denitsa Tsekova.