For instance, in Arizona, Gov. Doug Ducey’s Back to Work Program, announced in May, paid workers $2,000 each for taking a full-time job. They got $1,000 each for taking a part-time job. Ducey rolled out that program as he revealed that Arizona would stop taking federal unemployment assistance this July.
“Although more people are ready to work today in Arizona than before the pandemic, many businesses are struggling to fill vital positions,” Ducey said in a press release then. “We cannot let unemployment benefits be a barrier to getting people back to work.”
States Cut Checks for Workers Returning to Work
To compete with federal unemployment benefits, which some said were incentivizing workers to stay idle, states decided to pay out bonuses for rejoining the workforce.
In Kentucky, Gov. Andy Beshear offered a one-time $1,500 payment to unemployed residents. According to the Associated Press, Beshear’s program was limited to the first 15,000 state residents who qualified by going back to work before July 30. Beshear paid for the incentive using $22.5 million in federal coronavirus funds.
“It truly brings, I think, government and the private sector together in a way where first we try the carrot as opposed to the stick to resolve this problem,” Beshear said this June.
In Maine, Gov. Janet Mills announced a Back to Work program that gave employers $1,500 per new full-time worker hired, which they could then pass on to the worker. (The checks dropped to $1,000 after June 30.) The program’s cap was 7,500 Maine residents. And it drew from $10 million in federal funding.
“Employers across the state are looking to staff up,” Mills said in a statement. “Which means there are opportunities for everyone to work, earn a living and contribute to our state’s economic recovery.”
And in Montana, Gov. Greg Gianforte offered $1,200 checks to people who had been on unemployment but then took jobs and finished at least four weeks of work. As in other states, Gianforte drew on federal funds to make the payments.
“Montana is open for business again, but I hear from too many employers throughout our state who can’t find workers,” Gianforte said in a statement. “Nearly every sector in our economy faces a labor shortage.”
Incentives Are Not Without Critics
However, some pointed out that incentive programs for stubbornly idle workers may grate on workers who’ve been laboring throughout the pandemic.
“This is just another example of state government using taxpayer dollars to pick winners and losers,” Kentucky House Speaker David Osborne told the AP. He called Beshear’s incentive “extremely insulting” to workers who stayed on the job throughout the pandemic.
Business leaders seem to be taking a pragmatic approach. Many are opting for whatever solution works to get those “help wanted” signs out of local shops’ windows. And small businesses in some states welcomed the moves.
“I have to think it is going to at least give us an upper hand getting some people back into this workforce,” Tina Hewett-Gordon told the Portland Press Herald. Hewett-Gordon is the general manager of the Nonantum Resort in Kennebunkport, Maine.
Still, in Montana, Montana Public Radio reports that only a third of the funds set aside for employment incentives were used for that purpose. The program paid out incentives to roughly 1,800 Montanans in nearly every county. Then lawmakers reallocated its remaining funds to a business innovation program and a program to lure out-of-state healthcare workers to Montana.