Pennsylvania is loser in tale of two states
New Hampshire is doing a better job of getting people back to work during the so-called post-pandemic era.
“It was the best of times, it was the worst of times.” That is not just the beginning of a classic novel; it’s also a description of the economic divide between some U.S. states in the postpandemic era.
Take, for example, New Hampshire and Pennsylvania. Two northeastern states, both politically purple with large rural populations along with affluent, highly-educated suburbs.
But Pennsylvania’s June unemployment rate was 6.9% — tied for eighth highest in the country — while New Hampshire’s was just 2.9%, the thirdlowest. The national unemployment number is 5.8%. Why the difference?
One reason, according to economist Joel Griffith of the Heritage Foundation, is New Hampshire dumped the $300 a week enhanced federal unemployment benefits while Pennsylvania is still sending out those checks.
The Granite State is going one step further, paying bonuses to get people back to work. Gov. Chris Sununu calls it the Summer Stipend Program. Take and hold a part-time job and get a bonus check from the state for $500. Get a full-time gig (up to $25 per hour) and it’s $1,000.
Since the program was established, more than 21,000 people have stopped filing for unemployment benefits, according to Sununu’s office.
In Pennsylvania, Republican Sen. Pat Toomey believes some workers won’t return to the workforce if the money continues to be offered.
Chester County Chamber of Business & Industry CEO Guy Ciarrocchi says enough is enough: “The governor ought to stop paying people $300 extra a week to stay home.”
As The Wall Street Journal noted, the states with the lowest unemployment are governed by Republicans, and most have ended their enhanced federal unemployment. The states with the highest joblessness are run by Democrats. None have ended bonus payments.
“The 26 states that have announced their plan to end participation in the $300 weekly unemployment bonus have seen a 12.7% decline on average in initial claims over the past week,” the Foundation for Government Accountability reported in late June. “Meanwhile, states that have indicated they will continue participating in the unemployment bonus programs have seen an increase in initial claims by an average of 1.6% during this same period.
“Pennsylvania is one of the worst-performing of all states,” Griffith said. “Their economy is still 5% smaller now than it was before the pandemic, and that’s largely a result of the edicts by the governor in a series of emergency shutdown orders.”
The Granite State story is very different. Sununu was the last governor in the region to impose a mask mandate and the first to lift most of the pandemic restrictions.
“New Hampshire is one of the states that have taken action to get people back to work,” said economist Jonathan Williams of the American Legislative Exchange Council. “Nebraska, Utah, South Dakota, and Idaho also took action to get people back to work and they removed the bonus federal unemployment benefits because they had a shortage of workers, they needed to get their economies back on track, and many of their small businesses that barely survived the last 18 months were hanging on by a thread.”
Pennsylvania’s Department of Labor says it saw positives in the latest jobs report: “Jobs increased in five of the 11 industry supersectors, with the largest volume gain in government (+13,500). The largest drop was in construction (-4,100) (but) over the year, total nonfarm jobs were up 325,000 with gains in 10 of the 11 supersectors.”
Still, the bad news remains and, with unemployment claims actually bumping up last week, the divide between the states could get worse.
“Illinois, New Jersey, New York, Hawaii, California, New Mexico, and Connecticut continued the benefits and have given the workforce an incentive to stay at home and not look for work,” Williams said. “So, once again, clear economic incentives drive people’s behavior.”