DES MOINES, Iowa – Gov. Kim Reynolds announced that she would end the state’s participation in federal pandemic unemployment programs to address a “severe workforce shortage” effective June 12, 2021. Iowa will continue to provide regular state unemployment insurance benefits to those eligible under the applicable state code.
“Federal pandemic-related unemployment benefit programs initially provided displaced Iowans with crucial assistance when the pandemic began,” Reynolds said in a released statement. “But now that our businesses and schools have reopened, these payments are discouraging people from returning to work. Our unemployment rate is at 3.7 percent, vaccines are available to anyone who wants one, and we have more jobs available than unemployed people.”
The week ending June 12, 2021, will be the last week that the following federal pandemic-related unemployment benefit programs are available in Iowa:
- Federal Pandemic Unemployment Compensation (FPUC)
- Pandemic Unemployment Assistance (PUA)
- Pandemic Emergency Unemployment Compensation (PEUC)
- Mixed Earners Unemployment Compensation (MEUC)
Additionally, effective June 13, 2021, Iowa will no longer waive employer charges for COVID-related unemployment insurance claims.
“Regular unemployment benefits will remain available, as they did before the pandemic, but it’s time for everyone who can to get back to work,” Reynolds stated. “This country needs to look to the future, and Iowa intends to lead the way.”
Beth Townsend, director of Iowa Workforce Development, pointed to tens of thousands of job postings on the agency’s website.
“The overwhelming message we receive from employers these days is the lack of workforce that is adversely affecting their ability to recover from the pandemic,” she said. “There are currently over 66,000 job openings posted on https://www.iowaworks.gov/vosnet/Default.aspx. Our field offices are open and ready to help. We are very excited to return to providing the support and help we love to provide – helping Iowans find their next great job or new career pathway and helping employers find their next great employee.”
Matt Everson, Iowa state director for the National Federation of Independent Business (NFIB), applauded the decision.
“Thanks to the Governor’s continued leadership during this pandemic, today’s actions will help alleviate a growing issue for our small business owners here in Iowa. By phasing out some of the pandemic-related federal unemployment benefits, small businesses will be able to finally hire employees for the many job openings they are struggling to fill,” he said. Some of our smallest business owners here have had to shut down their business simply because they can’t find people to show up to work. Small businesses across the state are ready to expand and grow the state’s economy, and getting people off the sidelines and back to work is a top priority.”
Republican Party of Iowa Chairman Jeff Kaufmann said that Reynolds is doing what is in the best interest of Iowans.
“Governor Reynolds’ approach to this pandemic has always been about doing what is best for Iowans all across the state. Today, she is showing Iowans that they are her number one priority,” he said in a released statement.
“Businesses that keep our communities alive are struggling to survive themselves. They need workers, but these pandemic-related benefits are discouraging people from returning to their jobs. We must begin moving forward, and Kim Reynolds is building a stronger future for the State of Iowa,” Kaufmann added.
Democrats criticized Reynolds’ decision.
“As President Biden said, ‘People will come back to work if they’re paid a decent wage.’ The federal relief is helping Iowans stay housed, clothed, and fed. Democrats have plans to ensure Iowans have better paying jobs, affordable child care, and job training,” State Senator Zach Wahls, D-Coralville, the Iowa Senate Minority Leader, tweeted.
“It makes no sense for Governor Reynolds to pull the rug out from unemployed Iowans while we remain in the grip of a worldwide pandemic,” he added.
Critics point to a report from the Federal Reserve Bank of Chicago that says that those who collect unemployment insurance benefits search more intently for a new job.
State Rep. Todd Pritchard, D-Charles City, the Iowa House Minority Leader, said Reynolds threw “common sense out the window.”
“In search of national headlines, Governor Reynolds has thrown common sense out the window and again failed the leadership test,” he said. “Her decision to end additional assistance to Iowans who lost their job during the pandemic is unconscionable and heartless. It has real consequences for Iowa families who are behind on rent, trying to put food on the table, pay for child care, and get their lives back to normal. Her action today will slow Iowa’s economic recovery for not only unemployed Iowans, but all Iowans.”
U.S. Rep. Ashley Hinson, R-Iowa, said Reynolds was exercising common sense.
“I’ve heard from businesses across Iowa who have “Help Wanted” signs on their doors, but can’t find workers to fill open jobs. This is because the government is paying people to stay home instead of work—this is a huge issue and barrier to long term economic growth. Economic polices that discourage people from working will pull down our economy. I applaud Governor Reynolds for continuing to implement common sense policies that will put our economy back on track and help get our lives back to normal,” she said.