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Are unemployment benefits to blame for Idaho's labor shortage?

With the additional $300 a week from the federal CARES Act, what's the incentive to get back out to a minimum wage job?

BOISE, Idaho — Idaho's unemployment rate is dropping as the COVID-19 pandemic recovery progresses.

After hitting an all-time high last spring of just over 11.5%, the statewide unemployment rate fell to 3.3% in February. It reached 3.2% in the month of March.

Despite the decline in the state's unemployment rate, "Help Wanted" signs continue to pop up across the Treasure Valley at a higher rate than before the pandemic.

"Unemployment insurance rates have decreased, which is great," said Leah Reeder, an unemployment insurance spokesperson with the Idaho Dept. of Labor (IDL). "Part of that is we normally see this in the summer because of the seasonality of jobs in Idaho."

Many claim the reason for the statewide labor shortage has to do with unemployment benefits and how much those qualifying for it can take home. For many, it's more than what they made when they were working.

Those benefits, however, are not just handed out to claimants with no strings attached. As of April 25, everyone enrolled in unemployment insurance must provide proof of searching for work.

"The work-seeking group is the majority of the claimants and they have to apply for at least two jobs or perform two work search activities every week and they have to document what those are," Reeder said.

Despite this, many argue the additional $300 a week from the federal CARES Act is discouraging Idahoans from returning to work.

According to data from IDL, 7,000 Idahoans are working at or below the state minimum wage, which is $7.25. If someone is working full-time, that equates to $290 a week.

At minimum, unemployment recipients are receiving $72 per week, according to Reeder. With the additional $300, that amounts to $372 per week, which is the equivalent of earning about $9.30 per hour.

The maximum amount people can receive in unemployment each week is $463, according to Reeder. With the extra $300, recipients could bring home $763 per week, which is the equivalent of earning about $19 per hour.

The amount received from the state varies and is based on the recipient's previous pay.

"There's a lot of people who are on unemployment insurance who are self-employed and generally, they don't want to seek work," Reeder said. "They are trying to get their business going, but those individuals do have to look for work if they want to remain on unemployment insurance." 

The number of weeks someone can stay enrolled in unemployment insurance can range from 10-26 weeks depending on the current unemployment rate. Regardless, all claimants need to be actively searching for work while they are receiving benefits.

"The work search requirements are in effect for all of the claimants, regardless of what type of federal program they're on," Reeder said.

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