Gov. Greg Abbott prepares to deliver his State of the State speech at Visionary Fiber Technologies outside of Lockhart on Feb. 1. On Monday, Abbott announced Texas will opt-out of federal unemployment benefits, included an extra $300 per week that jobless Texans have been receiving.

Credit: Bob Daemmrich/CapitolPressPhoto/Pool

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The $300-per-week federal unemployment assistance Congress approved earlier this year will stop flowing to jobless Texans next month after Gov. Greg Abbott said Monday the state is opting out of the benefit.

After pressure from business groups, Abbott is withdrawing from the program that allowed Texans to receive a weekly unemployment supplement from the Federal Pandemic Unemployment Compensation program. The decision comes amid a trend of Republican governors announcing plans to cut the benefits in order to encourage people to return to work.

According to a press release, Abbott’s office said the decision was made to focus on connecting unemployed Texans with jobs instead of paying them unemployment benefits. The payments, which were scheduled to stop on Sept. 6, will instead end starting June 26 for Texans.

“The Texas economy is booming and employers are hiring in communities throughout the state,” Abbott said. “According to the Texas Workforce Commission, the number of job openings in Texas is almost identical to the number of Texans who are receiving unemployment benefits. That assessment does not include the voluminous jobs that typically are not listed, like construction and restaurant jobs.”

The unemployment rate in Texas was 6.9% in March, which is more than double the record low of 3.4% in May 2019. The Texas Workforce Commission did not immediately respond to a request for comment about how many Texans were receiving the federal benefits.

As governors withdraw from the federal benefits, critics say the payments are still necessary because some Texans are also still facing difficulties returning to the workforce while dealing with COVID-19 or coordinating child care, according to The Dallas Morning News.

Abbott said there are nearly 60% more listed jobs open in Texas today compared to February 2020. According to the Texas Workforce Commission, approximately 76% of posted jobs pay more than $11.50 an hour, and 2% of posted jobs pay around the minimum wage.

On Thursday, the Texas Association of Business and 37 other business organizations wrote a letter to Abbott asking him to pull out of the extra $300 a week to encourage productivity and lower unemployment. According to the letter, unfilled jobs in the state are threatening the “state’s recovery and economic future.”

“Texans want to get back to work, back to school and back to normal. Employers believe that supplemental UI benefit payments from Washington are disincentivizing work and resulting in many good Texas jobs going unfilled,” the letter said. “We believe it is time to realign government incentives behind the goal of rebuilding our economy together.”

Disclosure: Texas Association of Business has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

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