Governor Greg Abbott announced Monday afternoon that Texas will discontinue further federal unemployment benefits associated with the COVID-19 pandemic on June 26.
Among the insurance Texas is opting out of is the $300 weekly unemployment supplement from the Federal Pandemic Unemployment Compensation program.
“The Texas economy is booming and employers are hiring in communities throughout the state,” Abbott said. “According to the Texas Workforce Commission, the number of job openings in Texas is almost identical to the number of Texans who are receiving unemployment benefits. That assessment does not include the voluminous jobs that typically are not listed, like construction and restaurant jobs. In fact, there are nearly 60 percent more jobs open (and listed) in Texas today than there was in February 2020, the month before the Pandemic hit Texas.”
Abbott said that nearly 45 percent of available job openings pay more than $15.50 per hour and that approximately 76 percent pay more than $11.50 per hour, according to the Texas Workforce Commission (TWC). About 2 percent of job listings pay around the minimum wage.
Abbott emphasized that the state should pursue the strategy of matching unemployed Texans searching for work with the over a million job vacancies rather than distributing unemployment insurance, which incentivizes people to remain out of the labor force.
The governor also stated that the unemployment compensation system has been subject to fraud lately. He shared the TWC statistic which indicated that nearly 18 percent of all claims for unemployment benefits during the pandemic are confirmed or suspected to be fraudulent, totaling over 800,000 claims.
Abbot’s decision comes amid criticism that the Biden administration’s rollout of enhanced unemployment benefits contributed to lagging jobs report numbers in April, which fell short of economist expectations by roughly 800,000. It also follows studies, including one conducted by the National Bureau of Economic Research, showing that increased benefits are connected with a decrease in job applications.
Federal law requires the effective date of the policy modification to be at least 30 days after it is announced to the Secretary of Labor, which is why Texas’s opt-out date is June 26.