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June 15, 2024

Tennessee benefited by leaving federal unemployment program early, report says

Tennessee’s unemployment insurance spending dropped from $9.6 million per day in April and early May to $4.2 million per day after the state dropped out of the federal supplemental pandemic unemployment program July 3, according to a new report from the Foundation for Government Accountability (FGA).

The FGA, a public policy think tank that specializes in health care, welfare, work, and election reform, said Tennessee’s costs declined by nearly 60% in the three months after Tennessee left the federal unemployment program early.

About 22,000 Tennesseans were on unemployment Oct. 9 compared with the 162,000 receiving benefits in early May.

“Tennessee needed a spark to reignite its economy and fill the then-record number of open jobs,” the report said. “The decision of Gov. Bill Lee to end participation in federal unemployment bonuses and expansions has proved to be that spark, helping get Tennesseans back to work.”

Tennessee employers hired more than 750,000 workers between May 11 and Sept. 11, according to data from the Tennessee Department of Labor and Workforce Development (TDLWD), and are hiring an average of 6,200 workers per day.

“We know that families, businesses [and] our economy thrive when we focus on meaningful employment,” Lee tweeted about the report. “By moving on from pandemic unemployment benefits, our state has accelerated economic recovery [and] helped thousands of Tennesseans get back to work.”

TDLWD data shows the unemployment rate is below 5% in 93 of the state’s 95 counties.

“Government should work to create an environment for economic success,” state Rep. Jason Zachary, R-Knoxville, tweeted about the report. “Tennessee has done just that as businesses and families in our state are thriving.”

Brandon Puttbrese, spokesperson for the Tennessee Senate Democratic Caucus, said that the FGA report ignored the realities of Tennesseans who are out of work and seeking the right opportunity with decent benefits and affordable child care.

“Under Gov. Bill Lee’s response, 375,000 Tennesseans have lost a job this year through no fault of their own,” Puttbrese said. “And the pace of layoffs in Tennessee is still more than double the pre-pandemic rate.

“A state’s unemployment trust fund is a wholly inadequate measure for economic success. … Bottom line: Tennessee’s economic recovery, businesses and workers are in a worse place under Republican control because their policy decisions have never focused on ending the pandemic so people can get fully back to work.”

The TDLWD said 2.2 million job searches have happened on the state’s job portal since Lee’s announcement in May that the state would withdraw from the federal program, and Google showed work search activity increased by 67% after the announcement.

“Despite its strong fiscal and regulatory fundamentals, Tennessee faced a labor shortage that threatened the survival of its businesses and the self-sufficiency of its workers,” the report said. “But thanks to the decision of Gov. Bill Lee to end federal unemployment bonuses and other pandemic-related expansions, Tennessee is back on track. Unemployment insurance claims have declined to pre-pandemic levels, individuals have re-entered the workforce, businesses have been able to fill open jobs, and taxpayer resources are being preserved.

“Tennessee is back on a prosperous track, and policymakers have proven how ending benefits that pay better than work can reignite the economy.”

This article was originally posted on Tennessee benefited by leaving federal unemployment program early, report says

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