April 19, 2022

End to unemployment benefits had very little effect on job market

Gov. Ducey touted the move last summer as a fix to the tight labor market

unemployment office sign An unemployment insurance claims office.
Bytemarks/Creative Commons

The unemployment rate in Arizona just hit a historic low, but not because the state ended federal unemployment benefit payouts from COVID-19 relief funds early last July.

Rob Valletta with the Federal Reserve Bank of San Francisco said access to the increased payouts during the pandemic did not keep many people out of the job market to begin with, so when some state governments ended the program early, "that didn't have a large reverse impact."

"There wasn't all of a sudden a big rush of job search and new jobs being found by people who had been receiving unemployment insurance," Valletta said.

States like Arizona that took that step already had strong economies and low unemployment. But that doesn’t mean some families that were receiving the benefits weren’t left feeling like the rug had been pulled out from under them.

"That can be challenging for a family that may have already been teetering on the edge of having meaningful challenges and sustaining, essential, essential spending," Valletta said.

He added that few business owners likely saw more applicants because of the step.

By posting comments, you agree to our
AZPM encourages comments, but comments that contain profanity, unrelated information, threats, libel, defamatory statements, obscenities, pornography or that violate the law are not allowed. Comments that promote commercial products or services are not allowed. Comments in violation of this policy will be removed. Continued posting of comments that violate this policy will result in the commenter being banned from the site.

By submitting your comments, you hereby give AZPM the right to post your comments and potentially use them in any other form of media operated by this institution.
Arizona Public Media is a service of the University of Arizona and our broadcast stations are licensed to the Arizona Board of Regents who hold the trademarks for Arizona Public Media and AZPM. We respectfully acknowledge the University of Arizona is on the land and territories of Indigenous peoples.
The University of Arizona