Not time yet to end unemployment supplements: Beshear

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FRANKFORT, Ky. (WTVQ/CNET/AP)Some Kentucky legislators are urging Gov. Andy Beshear to join a growing number of states in canceling the $300 weekly federal unemployment insurance supplement as a way to force people to get back in the work force and accept jobs.

So far, the state has tried using a job-search reporting requirement as an incentive to get people to start taking jobs but businesses say that may not be working fast enough.

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Gov. Beshear says cutting off the supplemental federal payments to unemployed Kentuckians now would hurt the state’s economy as it recovers from the COVID-19 pandemic. But, he says he’s willing to consider ending the weekly $300 federal unemployment payment eventually.

Beshear says he’s trying to “thread the needle” of maintaining federal enhancements that pump money into the economy while encouraging people to go back to work as the economy reopens.

U.S. Senate Republican leader Mitch McConnell says governors are “having to take matters into their own hands and turn off” what he calls “extra-generous benefits.”

Much of the extra money is spent at grocery stores and other retail businesses, the governor said.

“An immediate termination of those extra benefits would hurt our economy and hurt a lot of groups — restaurants and others — that have suffered during this pandemic,” Beshear said. “It would put a shock through our system and it could threaten the way that our recovery is going.”

Governors are being pressed about the extra benefits as businesses report they can’t find people to fill the openings they have to keep up with the rapidly strengthening economic rebound. Some states will stop providing the additional federal enhancement.

Many people blame the pandemic-related benefits, including the supplemental federal payment on top of state benefits, for the struggles of businesses to fill jobs. They argue that people make more money staying home than going back to work. The challenge was highlighted recently when employers nationwide added far fewer jobs than expected at a time when job openings soared.

In a Senate speech Monday, McConnell lamented that a “record number of small businesses say they have open jobs they cannot fill.” He said governors across the country are “having to take matters into their own hands and turn off these extra-generous benefits.”

The Kentucky Republican blamed congressional Democrats who “insisted on continuing to pay people more not to work.”

“The policies that we needed in March 2020 are not the policies we need in May 2021,” McConnell said. “That has been obvious to Republicans, economists and the American people.”

Critics of ending the federal benefit say workers have multiple reasons why they might not be returning to the workforce, such as women who left jobs during the pandemic to care for children.

Kentucky reported a 5% preliminary unemployment rate for March of this year, down slightly from the previous month and better than the national jobless rate of 6% in March.

Beshear predicted Monday that some of the workforce shortages will “work out on its own.” Many Kentuckians are just now getting fully vaccinated against COVID-19 and will be returning to work, the governor said. Overall, 54% of adult Kentuckians have received at least one dose of vaccine, though the percentages are lower among younger adults, he said.

The governor said the extra jobless aid shouldn’t be turned into a partisan issue.

“It seems like everything now falls into red or blue or the politics of it,” he said. “The same way we tried to use science to battle this pandemic, we want to be smart about threading the needle the right way on the economy.”

So far 19 states — Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Mississippi, Missouri, Montana, North Carolina, Ohio, South Carolina, Tennessee, Utah, West Virginia and Wyoming — have said they will end the benefit early, either in June or July, depending on the state.

The additional $300 a week from the federal government is scheduled to run until Sept. 6 – Labor Day.

“These benefits were intended to keep Kentuckians afloat during the COVID-19 pandemic. Now they are contributing to a massive labor shortage that continues to harm already struggling businesses. Unless something is done, there will be no jobs to return too,” House Economic Development and Workforce Investment Committee Chair Russell Webber said Monday.

“States across our nation announce plans to shed pandemic-related requirements, vaccines are widely available, and life returns to normal. However, Kentucky businesses are facing a different reality as they struggle to find employees,” Webber added.

“We won’t realize our potential with a workforce participation rate of 56 percent. The people of Kentucky are hardworking, proud, and deserve the opportunity to better their lives. The average weekly benefit equates to more than $15 an hour for a 40 hour work week, which leaves unemployed Kentuckians uninspired to head back to work,” noted House Small Business and Information Technology Committee Chair Phillip Pratt, of Georgetown.

“Without terminating the federal unemployment subsidy, not only will Kentucky businesses and employers stand to face even further hardship, but we will stand witness to a failed reopening of Kentucky, and a long-term workforce development issue,” he added, noting the state ranks 48th in workforce participation.

According to the Kentucky Chamber of Commerce, the state has more than 100,000 vacant jobs. To find a list of employers hiring, visit https://www.kychamber.com/whoshiring.

Several states are also ending Pandemic Unemployment Assistance for the long-term unemployed and those who are self-employed, such as freelancers and gig workers.

Citing labor shortages, state governors say that enhanced unemployment coverage discourages workers from taking jobs. Some economists and analysts disagree, noting several factors are preventing people from finding suitable work, including lack of child care and fear of contracting coronavirus.

The U.S. Chamber of Commerce called for an end to the $300 weekly federal bonus.

President Joe Biden’s administration is working with states to enforce work requirements.

“We’re going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits,” Biden said. “That’s the law.”

According to the Department of Labor, if you turn down a suitable job, you can be denied unemployment benefits: “You must be able, ready and willing to accept a suitable job,” according to a department FAQ. The New York Times reported that the Biden administration asked the Labor Department to work with states to make sure unemployed workers cannot continue to draw benefits if they turn down a suitable job offer.

While unemployment rates are lower than they were last year at the start of the pandemic, as of April some 16 million Americans were still receiving some kind of jobless aid. According to the Bureau of Labor Statistics, more than one in four jobless Americans have been without unemployment for over a year.

In 2020, as part of the CARES Act, those receiving unemployment were eligible for an additional $600 weekly until the end of last July. Weekly bonuses picked up again with last year’s December relief package, but for half the amount, $300.