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Hogan announces end to enhanced jobless benefits

Gov. Larry Hogan Tuesday announced that Maryland will cut off enhanced pandemic unemployment benefits and reinstate work search requirements early next month, citing claims from employers that they were facing serious worker shortages. Democratic legislative leaders denounced the move, saying Hogan’s action would harm the most vulnerable of the state’s workers.

“Our health and economic recovery continues to outpace the nation, and we have reached the benchmark set by President Biden of vaccinating 70% of adults,” Hogan said. “While these federal programs provided important temporary relief, vaccines and jobs are now in good supply. And we have a critical problem where businesses across our state are trying to hire more people, but many are facing severe worker shortages. After 12 consecutive months of job growth, we look forward to getting more Marylanders back to work.”

To date, 24 states have announced that they will discontinue enhanced pandemic federal unemployment benefits, the Hogan administration said, noting that U.S. Department of Labor data shows there are 8.1 million job openings nationwide.

Senate President Bill Ferguson said Hogan’s announcement was short-sighted. “This rash and rushed decision will hurt Marylanders who have been hit the hardest during the pandemic, having lost jobs through no fault of their own,” Ferguson said. “It feeds into a hard right-wing narrative that denies human dignity, puts profits over people, and puts politics over sound economic research. To rebuild stronger, Maryland must follow a clear plan of recovery that gives workers, employers, and the economy time to adjust predictably.”

Economists have said that expanded unemployment benefits have induced some workers to avoid returning to jobs that pay them less than what they’ll receive from federal benefits. But other factors — including the absence of child care for some workers, retirements for older employees, and concerns about contracting COVID-19 — have induced others to stay out of the workforce, they say.

Economists note that even before the pandemic there was a labor shortage in the U.S., in part because of reduced immigration, lower birth rates, a lack of skilled workers in some sectors and for other reasons.

In recent months, some employers have begun raising wages, acknowledging that their existing pay scales were not attracting workers. Under Armour, confronted with about 3,000 retail and distribution job openings nationally,  said last month that it was boosting its minimum wage to $15 an hour.

In his announcement Tuesday, Hogan said state officials have provided the Biden administration with the 30 days’ written notice required by law for opting out of several unemployment programs that were created to ease the impact of the pandemic, effective July 3, 2021. Those programs are:

  • Federal Pandemic Unemployment Compensation (FPUC), which provides an additional $300 per week
  • Mixed Earners Unemployment Compensation (MEUC)
  • Pandemic Emergency Unemployment Compensation (PEUC)
  • Pandemic Unemployment Assistance (PUA)

Hogan did not say how many state residents currently are receiving expanded benefits, but according to federal labor statistics there are about 177,000 Pandemic Unemployment Assistance claims and 87,000 PEUC claims ongoing in Maryland.

The PUA program provided benefits to independent contractors and “gig” economy workers who did not qualify for traditional unemployment benefits.

The federal government had extended the $300 weekly Federal Pandemic Unemployment Compensation benefits until Sept. 4, but states could choose to opt out of the program.

Business groups applauded Hogan’s announcement Tuesday.

“Small business owners have been among the hardest hit by the COVID-19 crisis. While they are seeing their sales grow amidst a steady economic recovery, a record 44% of owners reported job openings that could not be filled in NFIB’s latest jobs report,” said Mike O’Halloran, Maryland state director for the National Federation of Independent Businesses. “The governor is right to call this a ‘critical problem.’ Now that capacity restrictions and closings are behind us, we’re hopeful these jobs will quickly be filled as the summer is unofficially underway.”

On May 21, the state reported that Maryland gained 3,800 jobs in April and that the unemployment rate remained at 6.2%, slightly above the national rate of 6.1%. April was the twelfth consecutive month of job growth in Maryland, the state said; since the beginning of 2021, Maryland has gained a total of 27,700 jobs.

As of April, there are about 193,000 unemployed Maryland residents, according to state Department of Labor seasonally adjusted figures.

As a result of the governor’s move Tuesday, Marylanders filing unemployment claims will no longer be able to submit new applications for those federal programs after July 3, although the state will process all claims received prior to that date. If claimants are waiting to receive an eligibility determination for any of the four federal programs that are being ended, the department will process payments owed to them for all weeks prior to July 3, Hogan said.

Additionally, beginning the week of July 4, the state Department of Labor will reinstate a requirement that had been suspended during the pandemic — that all those who applied for unemployment benefits show that they are actively looking for work.

Beginning that week, claimants must show they completed three efforts to find a job each week — such as attending a job fair or applying for a job. Otherwise they can be denied regular state unemployment  benefits.