Gov. Phil Murphy announced Monday that New Jersey will not extend the $300 supplemental unemployment insurance benefit past the Sept. 4 expiration date.
The decision will impact approximately 500,000 residents.
President Joe Biden recently suggested that states could use some of the federal funds they received from the American Rescue Plan to continue the additional payments. New Jersey received $6.2 billion in ARP funds.
Murphy said using federal funds to continue the payments would be cost-prohibitive, saying it would cost the state potentially more than $314 million a week and more than $1 billion a month.
Murphy noted no state has agreed to continue the supplemental payments.
“The proper way to extend federal UI benefits is through federal action, not a patchwork of state ones,” he said.
New Jersey’s unemployment rate currently is 7.3% — down from a high of 16.6%.
Many have speculated that the supplemental payment has lessened the desire or need for those unemployed to find work — increasing the state’s hiring crisis. Studies from states that discontinued the supplemental benefit earlier this summer show the move did not dramatically impact the number of people looking for work.
Murphy noted that the state has one of the highest unemployment payouts in the country — and that the state has put $33.7 billion into the accounts of nearly 1.6 million New Jerseyans since the start of the pandemic. Of that money, roughly $25 billion have been federal dollars.
Murphy said he knows the decision will have impact — but noted how much the state has done and will do.
“We recognize the impact that this will have on some families facing unemployment issues,” he said. “To support New Jerseyans living through the economic impacts of the pandemic, we have invested in rent assistance, food assistance, child care assistance, health care affordability assistance, and other support programs we have set up and which are funded through billions of dollars of federal coronavirus relief programs.
“And, in terms of child care and health care, the direct supports and subsidies we offer mean that, for some families, these vital needs can be had at virtually zero out-of-pocket cost. The Department of Labor is prepared to assist those who need further assistance to find these resources.”
Murphy said extending the unemployment benefit would force the state to cut back in other areas.
“We must make the most of the American Rescue Plan funds we have been given to support our small-business community and our startups, who are the major creators of jobs across our state,” he said. “But we cannot crowd out essential investments in other areas, including for the assistance programs I mentioned, as well as for our schools, and colleges and universities, among them.
“Our federal coronavirus relief pot is intended to support multiple recovery programs that our residents and businesses both need. We must ensure that we are appropriating these funds judiciously for the greatest possible long-term recovery.”