Ducey: Arizona to stop paying extra $300 unemployment benefit; state offering $2,000 return-to-work bonus

Governor Doug Ducey announces back to work incentives

Gov. Ducey said he is going to use Federal money to encourage people to go back to work, rather than paying people to not work, as he announced the state will stop paying the Federal supplement to unemployed workers.

PHOENIX - Arizona Governor Doug Ducey on Thursday announced the state will stop paying the $300 federal supplement to unemployed workers and will offer a $2,000 return-to-work bonus in an effort to get Arizonans back to work.

The governor’s action, which goes into effect July 10, means unemployed Arizonans will again get the second lowest weekly pay in the nation: $240 per week. Ducey is continuing federally sponsored programs that extend the standard 26 weeks of pay by another 29 weeks and allow gig workers such as Uber drivers to qualify for unemployment pay, although those will also be reduced by $300 per week.

"In Arizona, we're going to use federal money to encourage people to work… instead of paying people not to work," Ducey said in a statement on May 13.

The one-time $2,000 return-to-work bonus will be available for eligible individuals who get a full-time job. A one-time $1,000 bonus will be offered to those who get a part-time job.

The bonuses will be awarded once the individual has left the unemployment insurance program and has completed at least 10 weeks of work with a new employer.

The bonuses will be on a first-come, first-serve basis.

Ducey also announced the state will provide $7.5 million for community college scholarships for unemployed workers who are eligible for the return-to-work bonus. The state will also provide $6 million for GED test preparation and exam fees for eligible workers without a high school diploma.

Three months of child care assistance will also be provided by Arizona to people with children who return to work after collecting unemployment benefits. To be eligible for this, you must have already filed for unemployment benefits and earn $25 per hour, equivalent to $52,000 per year, or less.

Ducey slashed unemployment checks by more than half despite celebrating the health of the state’s economy throughout the pandemic, noting the state shed fewer jobs than most. In Arizona, more people are employed now than before the pandemic, though the unemployment rate is also higher because the pool of jobseekers has grown.

"Although more people are ready to work today in Arizona than before the pandemic, many businesses are struggling to fill vital positions," Ducey said in a statement. "We cannot let unemployment benefits be a barrier to getting people back to work."

Ducey’s move follows the lead of 12 other states led by Republican governors who acted in the past week and argued in ending the extra unemployment pay that it was providing an incentive for laid-off workers to stay off the job. It will affect about 32,000 people currently receiving regular unemployment and another 176,000 people enrolled in programs for the long-term unemployed and contract or gig workers, according to data from the state Department of Economic Security.

Businesses have cited the extra $300 as a reason they are struggling to find workers, but there are other factors at play preventing people from returning to work. Some are worried about exposure to the coronavirus if they return to service sector jobs, according to government surveys, and many working mothers have left the workforce to care for children still attending school online.

Arizona’s unemployment soared after layoffs triggered by the pandemic last March. The state’s unemployment trust fund, which builds up cash during periods of low unemployment, was at $1.1 billion before the pandemic hit a year ago. It had fallen below $90 million in February, but Ducey used federal virus relief cash to boost the balance.

Ducey’s action Thursday came as the U.S. Labor Department said the number of Americans seeking unemployment benefits fell last week to 473,000, a new pandemic low and the latest evidence that fewer employers are cutting jobs as consumers ramp up spending and more businesses reopen.

READ the governor's full news release here: https://bit.ly/3eHDAB6

Arizonans react to Gov. Ducey's announcement

Michael Rusconi, who owns Rusconi's Kitchen, says he'd hire 10 people right now if he could find them.

"We’re desperate to hire. It’s been one of the most challenging things," said Rusconi.

Rusconi would like to expand hours at his restaurant and he has even offered $500 bonuses to new hires.

"There’s the unemployment factor. The enhanced unemployment, the stimulus, that’s great motivation for people to not come back to work," said Rusconi.

Steve Chucri, President of the Arizona Restaurant Association, said Gov. Ducey's measure, as announced on May 13, should help with the worker shortage situation.

"I’ve not seen signing bonuses, I’ve not seen bonuses just to show up to work, so those are all new to the restaurant industry, and I’m hopeful we can get our labor force back in our restaurants," said Chucri.

Not all are optimistic the plan will work. Elizabeth Newcomb, a single mother who is unemployed, says the measures, as announced, won't help her.

"A lot of our childcare was closed down because of COVID, and now, there’s waiting lists," said Newcomb. "There are some lists that are a year, two, three years long, so single moms like me, single dads, we can’t just get right back to work."

The Associated Press contributed to this report.