PROVO, Utah – In a release on Wednesday, Utah Gov. Spencer Cox announced the discontinuation of the federal unemployment programs tied to the COVID-19 pandemic and the federal stimulus package, with programs ending June 26.
These programs include an additional $300 in federal stimulus to anyone qualified for unemployment, the federal extension of unemployment benefits, and one for self-employed or gig workers.
According to a release from the governor’s office, federal pandemic unemployment assistance in Utah totals $12.4 million a week.
The state has a 30-day opt-out period, and Department of Workforce Services Assistant Deputy Director Kevin Burt said the state will opt out soon.
“All of these programs were going to expire on Sept. 4th, but given Utah’s current economic situation we believe it is the right decision to end them as of June 26th as a state,” Burt said on Wednesday.
With Utah currently having no business restrictions, the COVID-19 vaccine being readily available, and Utah having the lowest unemployment rate in the country, Burt said he sees this as a natural step for the state as the economy continues to bounce back.
Burt added that these programs made sense during the peak of the COVID-19 pandemic, with business restrictions and other economic strain, to help buoy the economy.
“Currently on jobs.utah.gov, we have over 50,000 jobs posted and the total number of individuals in Utah on unemployment insurance is 28,000, so we do believe Utah’s economy is going to be able to carry these individuals through employment,” Burt said.
While these federal benefits may stop on June 26, Burt stressed that the state unemployment benefits will still be available but at a pre-pandemic level.
This means people would get a 50% replacement wage and it would last 26 weeks.
The biggest point that was brought up by Burt was that government benefits should not be competing with employers. Through some data he cited, people in Utah have been staying on unemployment for an average of 40 weeks compared to the usual 26. He said it should not be a disincentive to get a job.
“It just isn’t supposed to replace employment, it is supposed to be an offset for some of those lost wages until they are able to reconnect back into the workforce,” Burt said. “What we are hearing from employers is that they are supportive of the change because they are trying to find employees and so we certainly want to be supportive of that.”
Burt said there should be no impact on unemployment numbers due to the move, but the labor force participation rate should see a rise.
This is a statistic that looks at how many people are actively looking for work or are currently employed, and due to the vaccine availability, Burt sees people returning to the workforce.
Some people may have disengaged with the workforce during the pandemic due to health concerns, lack of child care, and more, but with vaccine availability, schools returning to normal, and childcare coming back, it should help.
“This is the natural next step in getting the state and people’s lives back to normal,” Cox said in a press release. “I believe in the value of work. With the nation’s lowest unemployment rate at 2.9% and plenty of good-paying jobs available today, it makes sense to transition away from these extra benefits that were never intended to be permanent. The market should not be competing with government for workers.”
Burt said he is confident that Utah’s economy is ready to absorb the people who will lose the benefits, with employment opportunities actively available.