Even as local governments ponder how to shower tens of millions of dollars in American Rescue Plan assistance on distressed businesses, Maryland workers eligible for enhanced unemployment payments under the same federal legislation are getting word of an early end to that extra $300. Gov. Larry Hogan on Tuesday announced that the enhanced payments will stop on July 3 in Maryland and that work search requirements will be reinstated. Why? The governor has bought into claims that the post-pandemic recovery has been hampered by the benefits as businesses struggle to find workers and believe too many potential applicants are finding it more lucrative to stay home.
It is one thing to reinstate the job search requirement but quite another to unilaterally decide that adults still facing extraordinary challenges — from a lack of adequate child care to reduced transit access — are a bunch of lazy freeloaders who don’t deserve federal funds that were initially approved by a bipartisan majority of Congress more than one year ago at the $600 level and twice extended (most recently by the $1.9 trillion ARP in March) at the reduced $300 rate. The benefit was already due to expire on Labor Day. Removing it now is unlikely to significantly change the job market, but it is almost certain to adversely affect a lot of single-parent households on the poverty precipice.
We have no doubt that the worker shortage is real. But this isn’t the best way to address it. Indeed, one of the most important elements to the American Rescue Plan and other pandemic-related recovery efforts has been their “we’re all in this together” quality that provided broad support to the worst-impacted employers and employees alike. Yet on the same day that unemployed Marylanders are getting word of their loss, Baltimore City government is pondering a potential gain for business owners as Mayor Brandon Scott, members of the City Council and others debate how best to carve up $640 million in Rescue Plan funds. That surely includes a boost to the distressed hospitality industry. Are investors in hotels, tourist attracts and restaurants now expected to get off the public dole, too? We certainly hope not.
Yet the decision also seems wrong simply because the cause-and-effect case hasn’t been made, at least not convincingly. It’s certainly not difficult to find anecdotal evidence of individuals who are earning more by staying at home, but leading economists are divided, at best, over exactly what’s happening on the macroeconomic level. The fact that a lot of employers are facing difficulty filling jobs doesn’t make unemployment payments the culprit. Not when there are other potential factors, such as school closures and COVID-19 exposure fears. Governor Hogan makes a big point about Maryland’s reduced caseload and increased vaccination, but the pandemic isn’t over yet. Less than half the state’s population is considered fully vaccinated.
And there’s at least one more factor clearly at play, and that’s politics. Neighboring District of Columbia, Virginia, Pennsylvania and Delaware have not made this choice. At least 24 states have, but the list looks suspiciously like a Republican governors convention with states like Florida, Alabama, Texas and South Dakota scrapping enhanced benefits this month or next. Noticeably absent from the list are traditionally Democratic states like California, New York, Massachusetts and New Jersey. Maryland’s inclusion seems grossly out of step with its social welfare sensibilities. Even Indiana, with its Republican governor and GOP-dominated legislature, is waiting until July 19 to take the plunge.
We endorse almost anything else that Mr. Hogan can do to help people get back to work, but we strongly suspect that the vast majority of workers aren’t being deterred by unemployment benefits or at least face more complicated and difficult circumstances. As we’ve noted before, employers have options to attract new hires. Raising wages and benefits, for example. And we would also note that cutting off unemployment checks will have adverse consequences for some businesses as these direct payments provided families with money that they plowed right back into the economy in purchases of food, housing and other essentials. Senate President Bill Ferguson issued a statement this week asking for Mr. Hogan to reconsider his choice. We would second that motion and ask for greater compassion be extended to those who lost their jobs through no fault of their own.
The Baltimore Sun editorial board — made up of Opinion Editor Tricia Bishop, Deputy Editor Andrea K. McDaniels and writer Peter Jensen — offers opinions and analysis on news and issues relevant to readers. It is separate from the newsroom.