Study finds DeSantis’ decision to curb Fed unemployment benefits early boosted Florida’s economy

Florida Gov. Ron DeSantis’ early decision to phase out extra unemployment benefits provided by the federal government via coronavirus relief legislation provided a significant boost to the state’s tax collection and to the economy overall, a new study shows.

“Today, there is more job creation, more economic activity, and less unemployment thanks to the economic stewardship of Gov. DeSantis. In particular, the governor’s decision to end the $300 weekly unemployment bonus helped to accelerate Florida’s economic recovery and kick the state into overdrive,” wrote Hayden Dublois and Jonathan Ingram in a study for the Foundation for Government Accountability.

The authors went on to note that the national labor shortage also affected the Sunshine State, but the DeSantis administration’s focus on work, lowering taxes, curbing regulations, and concentrating on entrepreneurs put Florida in a better spot to weather the worst of the pandemic’s ill-effects.

In March, there were nearly 500,000 jobs open in the state, though three times as many residents were receiving unemployment benefits compared to before the pandemic.

The labor shortage appears to have been enabled or exacerbated after then-President Donald Trump signed the CARES Act, which provided federal unemployment benefits of $300 per week in addition to weekly state unemployment benefits. Not long after, a growing number of employers began to complain that their workers did not want to return to their jobs because they were making more on unemployment instead.

JPMorgan Chase, in an analysis, found that 48 percent of those receiving benefits made at least as much or more than they earned while working.

But starting in June, DeSantis began phasing out the extra federal benefits more than two months before they were set to begin to phase out nationally, on Labor Day, Fox Business reported Monday.

By ending this early, the Republican governor saved state taxpayers millions of dollars, according to the study. By late May, Florida was paying out some $400 million per week in unemployment benefits, but by the end of August, payments had dropped off by 86 percent, the study’s authors wrote. To determine that, they utilized data provided by the Florida Department of Economic Opportunity, whose officials said the agency was only doling out around $60 million per week at the end of August.

Also, after DeSantis announced he would be scaling back the federal portion of benefits early, the study found that job searches exploded by 40 percent. Between the end of May when the phase-out was announced and late August, employers in the Sunshine State hired almost 1.3 million new employees, with some 400,000 of those within three weeks of the elimination of the unemployment bonus.

“Normally when you’re getting unemployment, the whole idea is that’s temporary, and you need to be looking for work to be able to get off unemployment,” DeSantis said at a news conference in May after he announced the phase-out. “It was a disaster [at the beginning of the pandemic], so we suspended those job search requirements. I think it’s pretty clear now, we have an abundance of job openings.”

“You have a surplus of jobs, and particularly in restaurant, lodging, hospitality, that people want to hire. I mean, you see these signs all over the place,” DeSantis continued. “Look, that’s a good problem to have. But we also just want to make sure, look, if you’re really unemployed, can’t get a job, that’s one thing, but making sure that you’re doing your due diligence to look for work and making sure those incentives align better.”

Meanwhile, entrepreneurs managed to create around 150,000 new businesses after the unemployment benefits were ended. The authors discovered that “more businesses are created in Florida than in any other state in America,” with business start-ups increasing almost 70 percent when compared to pre-pandemic levels.

DeSantis was heavily criticized at the time for his decision, but Christina Pushaw, DeSantis’ press secretary, hailed the study as proof of the governor’s successful economic policies and compared them to the Biden administration’s record.

“President Biden’s promised labor market recovery has not materialized,” she told Fox Business in a statement. “Despite dismal national trends, Governor DeSantis’ policies continue to support job growth in Florida, and our economy is thriving. Thousands of people from different states move to Florida every month in search of opportunity and a better lifestyle.”

According to the most recent report from the FLDEO, released in mid-September — which covered the previous month — the state had “16 consecutive months of job growth, 13 consecutive months of lower unemployment than the national average, labor force growth of 65,000 in August and 373,000 since April, a 2.9% decrease in the unemployment rate since 2020, and a gain of nearly 1 million private-sector jobs since the beginning of the pandemic,” Fox Business noted.

Jon Dougherty


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