In March, when the US $ 1.9 trillion bailout was enacted, it was clear the public needed economic relief. Jobs were still hard to find and coronavirus vaccines were not yet widely available. It therefore made sense to inject a series of stimulus funds into the Bank accounts. It also made sense to increase unemployment benefits by $ 300 per week, when so many people are still out of work.
This $ 300 weekly boost was originally scheduled to expire in early September – Labor Day. But in the last few weeks, 26 states have chosen to put an end to the rise in unemployment ahead of schedule. The reason? Shortage of local labor.
Many lawmakers have argued that increasing unemployment benefits discourages workers from returning to the workforce. This is especially true for low-wage, minimum-wage earners, who may earn more money from increased unemployment than they would with actual employment.
Maryland was one of 26 states to end rising unemployment before its expiration date in early September. But Maryland residents fought back, filing lawsuits against the state for the reinstatement of those increased benefits.
On July 13, a judge sided with the residents. And now Maryland must continue to pay those increased unemployment benefits until September 6, when they expire nationally.
A lifeline for the unemployed in Maryland
In the battle to pull out spurred unemployment, there are two sides to the story – the working side and the economic recovery side. Those who remain unemployed argue that the early termination of enhanced benefits puts them in dire financial straits. Those on the local economy side argue that if this boost remains in place, it could force many businesses to close because they cannot meet their staffing needs. This in turn could hamper economic recovery at the local level and possibly at the state level as well.
Both points are valid. But it’s important to recognize that rising unemployment isn’t the only thing preventing some people from working. For many, a lack of affordable child care is still an issue, although this can, to some extent, be resolved once schools reopen for the 2021-2022 school year.
There are also security issues to consider. Not everyone has been able to get the coronavirus vaccine, and for the unvaccinated, the thought of returning to work at a time when mask warrants have been largely lifted can be downright unsettling.
For now, the unemployed in Maryland have a lifeline and will continue to receive their increased benefits until early September. Governor Larry Hogan initially sought to cut them off on July 3.
Maryland is not the only state where the unemployed are suing to have their increased benefits reinstated. Comparable lawsuits have also arisen in Indiana, Texas and Ohio. And if similar rulings are made, it could save many unemployed Americans a world of short-term financial distress.
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