Gov. Phil Murphy said Aug. 30 he will not extend the $300 per week unemployment benefits once they lapse on Sept. 4, a move that will affect upward of 500,000 New Jereyans.
Murphy, in his Monday afternoon decision, said he opted to end the $300 weekly benefits because the alternative – to continue to pay them out – would cost the state hundreds of millions of dollars a week: $314 million a week and up to $1 billion a month.
“The proper way to extend federal UI benefits is through federal action, not a patchwork of state ones. And it should be noted here that no state is extending this benefit beyond Sept. 4,” Murphy said.
Another 250,000 New Jerseyans receive benefits under the Pandemic Unemployment Assistance program, which provides aid to non-traditional workers such as freelancers and sole proprietors. And 190,000 people receive a 13-week extension under the federal Pandemic Emergency Unemployment Compensation.
Those both also expire on Sept. 4, but according to a report by NJ Advance Media, the state Labor Department will move 100,000 PEUC claimants to a state-run program.
To extend PUA could cost between $70 million and $161 million a week while extending the PEUC would cost between $77 million and $124 million a week, the report added.
Many businesses and conservative lawmakers have lamented the $300 as a primary reason for the labor shortage that has affected the restaurant, leisure and retail industries since COVID-19 restrictions on businesses were mostly lifted in the spring.
Murphy, and other labor rights figures, contend that the added $300 plays a role in that shortage, but that it nonetheless is one of many reasons New Jerseyans have been hesitant to return to work. Those seeking career advancement, lack of access to child care, and concerns about health and safety during the pandemic were other reasons typically cited.
New Jersey Business & Industry Association CEO Michele Siekerka said the hiring shortage was essentially a “perfect storm” of different factors working together and worsened by the added unemployment relief.
The state’s unemployment rate stands at 7.3%, making it the fifth-highest in the nation. It peaked at 16.6% in April 2020, at the height of the COVID-19 business closures put into place.
“We recognize the impact that this will have on some families facing unemployment issues,” the governor added. “To support New Jerseyans living through the economic impacts of the pandemic we have invested in rent-assistance, food-assistance, child-care assistance, health-care affordability assistance, and other support programs we have set up and which are funded through billions of dollars of federal coronavirus relief programs.”
Under the American Rescue Plan signed by President Joe Biden in March, New Jersey would be allowed to use any of its $6.2 billion toward extending the unemployment supplement.
“[T]aking away benefits does not spur job growth, but it does make it much harder for families to put food on the table,” Vineeta Kapahi, an analyst at the progressive think tank New Jersey Policy Perspective, said in a statement last week. “Too many workers continue to face the impossible choice of exposing themselves to COVID-19 or losing income, while many others are struggling to juggle caregiving responsibilities with work.”