The 20 Republican-led states that reduced unemployment benefits in June did not see an immediate spike in overall hiring, but early evidence suggests something did change: The teen hiring boom slowed in those states, and workers 25 and older returned to work more quickly.
A new analysis by payroll processor Gusto, conducted for The Washington Post, found that small restaurants and hospitality businesses in states such as Missouri, which ended the extra unemployment benefits early, saw a jump in the hiring of workers over age 25. The uptick in hiring of older workers was roughly offset by the slower hiring of teens in these states. In contrast, restaurants and hospitality businesses in states such as Kansas, where the full benefits remain, have been hiring a lot more teenagers who are less experienced and less likely to qualify for unemployment aid.
The findings suggest hiring is likely to remain difficult for some time, especially in the lower-paying hospitality sector. The analysis also adds perspective to the teen hiring boom, revealing that more generous unemployment payments played a role in keeping more experienced workers on the sidelines, forcing employers to turn to younger workers. It indicates teen hiring could slow further in September, as unemployment benefits are reduced across the country and young people return to school.
So far, early data suggests that cutting the benefits given to Americans who lost their jobs during the covid-19 pandemic has not led to a big pickup in hiring. The 20 states that reduced benefits in June had the same pace of hiring as the mostly Democrat-led states that kept the extra $300-a-week unemployment payments in place, according to state-level data from the Labor Department.
Heather Long & Andrew Van Dam, Washington Post