As of this week, jobless Ohioans will not receive an additional $ 300 in unemployment benefits after Governor Mike DeWine announced last month it would withdraw from enhanced federal pandemic benefits designed to support the economy affected by COVID-19.

The extra money was cut after Saturday. The Ohio Department of Employment and Family, which handles unemployment, said it would continue to pay the money on all qualifying claims for weeks until June 26 inclusive, but not after.

The reason? Many business groups and Republican leaders fear thethe ongoing rebound could stifle a growing labor shortage. They believe legions of workers benched by the novel coronavirus are choosing to stay home on their biggest unemployment checks. The extra $ 300 nearly doubles the average weekly unemployment benefits paid in Ohio.

The Ohio solution follows the lead of other Republican-led states hoping to get workers back to work by cutting the extra money.

Will the plan work? Economists say there is no data to say one way or the other.

Ohio’s unemployment rate of 5.0% with nearly 278,000 unemployed workers is roughly at pre-pandemic levels. Ohio’s initial jobless claims of 16,300 in the first week of June are down sharply from COVID-19 highs, but double what they were just before the pandemic.

Whether Ohio moves the needle further in resuming its jobs will likely show up first in these data points.

Half of the US states ended their participation in enhanced unemployment benefits, as of mid-June. Even for the four states that dropped the benefits the earliest on June 12 – Alaska, Iowa, Mississippi, and Missouri – the data is minimal.

“There has to be some level of social protection that keeps people at home – but we don’t know what it is,” said Gary Clayton, chairman of the University of Ottawa’s department of economics and finance. Northern Kentucky.

Business groups, such as restaurants, believe that many potential workers have little incentive to return to kitchens as long as they get increased unemployment.

Critics called the move “cruel” and said it would slow overall consumer spending in Ohio. If restaurants and other businesses need more workers, they should pay better, they say.

“By removing these benefits from unemployed Ohio workers, DeWine is not only dealing a cruel blow to families, it will hurt the Ohio economy by depriving businesses of nearly $ 1 billion in spending that does will not produce now, “Zach Schiller, research director at Policy Matters Ohio, said in a statement.

But starting wages are already rising due to labor shortages, contributing to inflationary fears that could further delay economic recovery.

“As the economy reopens, businesses across the state are struggling to resume operations and keep pace with resurgent consumer demand,” said Logan Kolas, economic policy analyst at the Center for Economic Research of Canada. Buckeye Institute, in a recent editorial. “Washington’s pumped-out expanded temporary unemployment insurance has made it harder – and more costly – for businesses of all sizes to re-attract workers and reopen their doors. “

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