Gov. Holcomb: Indiana to end federal pandemic unemployment benefits

Coronavirus

INDIANAPOLIS – Governor Eric Holcomb announced Monday that Indiana will end its participation in all federally funded pandemic unemployment insurance programs effective June 19, 2021.

“There are help wanted signs posted all over Indiana, and while our economy took a hit last year, it is roaring like an Indy 500 race car engine now. I am hearing from multiple sector employers that they want and need to hire more Hoosiers to grow,” said Gov. Holcomb.

The announcement follows the governor’s May 11 executive order that reinstated work search requirements on June 1 for those requesting unemployment benefits. These requirements include applying for a job, attending a job fair, participating in WorkOne orientation or completing an online workshop.

“We’ve re-emerged from the COVID pandemic, and free vaccinations that protect you from the virus are available throughout the state. The CDC has provided guidance that says vaccinated people can feel secure about not wearing face coverings in many circumstances. Daycare facilities are open, and our economy is humming,” said Gov. Holcomb.

The governor added that Indiana’s unemployment rate jumped to more than 17% at the height of the pandemic but has now recovered to 3.9%. Holcomb said more Hoosiers are in the workforce now than a year ago, and the labor force participation rate is nearing the pre-pandemic level.

“I’ve spoken to leaders in the recreational vehicle industry who tell me they could hire thousands of people today, and in the last couple weeks, we’ve seen companies like Amazon, Apple, Toyota and Milwaukee Tool announce thousands of new career opportunities for Hoosiers,” said Holcomb.

Indiana boasts one of the healthiest unemployment numbers post-pandemic, and its unemployment rate is one of the lowest among midwestern states. Kevin Brinegar, president & CEO of the Indiana Chamber of Commerce, says this is part of the reason the governor is turning down federal aid. 

“Currently, about 116,000 jobs that are open and available, and we have people who are sitting on the sidelines because of the supplemental federal unemployment payments at $300 a week that are on top of the state benefits,” Brinegar said. “For them, they say, ‘You know, I can make as much money or in some cases more by just staying home,’ and that hurts our workforce participation rate.

“It hurts our state’s economy, and the governor announced today and said a message to the federal government: our economy has recovered to the point that we don’t need these extra payments that are keeping people on the sidelines who are otherwise ready and available and able to come back to work.”

However, leading economists, like Kyle Anderson at the IU Kelley School of Business, argue this action is shortsighted and may have the unintended, opposite effect on the unemployed. 

“Essentially, what the governor is doing is cutting off Indiana from getting federal dollars to workers who are on unemployment right now, and that’s really good for the Indiana economy,” Anderson said. “Our federal taxes that we’re paying are then still going to other states, but they’re not coming back to Indiana.

“There’s this narrative that people are free riding or just taking these benefits to sit at home and do nothing, and I think that narrative might be overstated.”

Indiana will join neighboring Ohio and several other GOP-led states in their effort to bring Hoosiers back to work by ending federal relief dollars. Anderson thinks the state’s “eagerness” to fill jobs in every sector may hurt minimum wage jobs most by removing the safety nets. 

“We’re very eager to try to like fill these jobs when it’s not surprising that it should take some time to get these jobs full again,” said Anderson. “We want Hoosiers to find good jobs that are a good fit for them for the longterm, not just find something that, ‘Hey, I need to go back to work today, right away. I’ll just take whatever.’

“There’s no guarantee that businesses should be able to offer low wage jobs, minimum wage jobs, and always expect to fill them. If they need more workers, they may have to pay more.”

That is exactly what Crew Carwash had to do. The company now offers part and full-time positions at $16 per hour, with incentives. 

“We start at $16 an hour for part-time and full-time associates, whether that’s morning or evening shift,” said Will Stephan, a recruiter for Crew Carwash. “We want to find the top talent, and this is one of the ways to attract candidates to work here.”

Programs that will end on June 19, 2021:

  • Federal Pandemic Unemployment Compensation (FPUC), which provides a $300 weekly add-on to recipients of unemployment insurance
  • Pandemic Emergency Unemployment Compensation (PEUC), which provides recipients extended benefits after their traditional 26 weeks of unemployment insurance benefits have been exhausted
  • Pandemic Unemployment Assistance (PUA), which provides benefits to individuals who do not normally qualify for unemployment benefits, such as self-employed, gig workers, and independent contractors
  • Mixed Earner Unemployment Compensation (MEUC), which provides a $100 additional weekly benefit for individuals who are eligible for regular unemployment benefits but also earned at least $5,000 in self-employment income

“Eliminating these pandemic programs will not be a silver bullet for employers to find employees, but we currently have about 116,000 available jobs in the state that need filled now,” Holcomb explained.

The Indiana Department of Workforce Development will notify impacted unemployment insurance claimants about the discontinuation of the federal pandemic benefits and will notify affected Hoosiers about the reinstatement of work search requirements.

Lauren Ganapini, executive director for the Indiana Democratic Party, issued the following statement:

The COVID-19 pandemic put a spotlight on why a living wage is necessary in order for Hoosier families to have a shot at a better future in Indiana. So while Governor Holcomb is guiding Hoosiers back to a pre-pandemic normalcy, we cannot ignore the reality that it’s time for Indiana to increase its minimum wage and provide better opportunities for our workers. Over 892,000 Hoosiers currently earn a minimum wage job, and while it’s a goal for every worker to achieve their highest potential, we must do everything possible to create a bridge to help all Hoosiers succeed.

Indiana Democratic Party Executive Director Lauren Ganapini

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Most Popular

Indy Now

Latest News

More News