SHELBYVILLE, Ky. — Kentucky’s acceptance of extra jobless benefits is hampering efforts by businesses to find help as the economy moves beyond the pandemic, Republican U.S. Sen. Mitch McConnell said Wednesday in a dig at the Democratic governor.
Gov. Andy Beshear says the weekly $300 federal unemployment payments have contributed to surging consumer spending that benefits Kentucky businesses. The federal enhancement — coming on top of state jobless benefits — is set to expire in September.
McConnell, the Senate’s top GOP leader, said the extra benefit puts Kentucky at a competitive disadvantage with states that opted to cut off the supplemental payments.
After meeting with local employers Wednesday in Shelbyville, McConnell said he hears ongoing complaints from Kentucky business operators struggling to lure back workers. Employers link their workplace shortages to the federal jobless bonus, he said.
“This issue is keeping them from getting people back to work,” McConnell told reporters. “The coronavirus is behind us. We need to get back to work. We need to do things productively. And I do disagree with the governor’s position.”
Beshear has steadfastly defended the extra payments, saying Kentucky’s economy has benefited.
“Consumer spending drives our economy,” he said Tuesday. “Our consumer spending in Kentucky is through the roof. And if we did what some of these leaders called for and terminated this program earlier, you would see consumer spending drop. And I think you’re going to see a shock going through states that are doing that. It’s going to take longer for their economy to recover.”
The governor said he’s working with business leaders on a plan to resolve the worker shortage. But cutting off the extra federal benefit now would hurt Kentuckians whose jobs vanished during the pandemic or who stay home to care for children, the governor said.
Reiterating an oft-used Republican argument against the extra jobless benefits, McConnell said they lead recipients to conclude that “it’s just as profitable to stay home as to go back to work.”
“I think a lot of people are being very candid, they’re not hiding the ball, they’re being very candid about why they are staying home,” he said. “It simply doesn’t make sense economically and they know they’re going to get this additional bonus until September. I simply think it’s a mistake.”
Labor experts have said the shortage is not just about the $300 payment. Some unemployed people also have been reluctant to look for work because they still fear catching the coronavirus. Others have found new occupations rather than return to their old jobs. And many women, especially working mothers, have had to leave the workforce to care for children.
The governor has faced increasing pressure from prominent Republicans and business interests to halt Kentucky’s participation in the extra payments.
In a recent letter, Kentucky Chamber of Commerce President and CEO Ashli Watts urged Beshear to cease the state’s participation in the bonus payments in mid-July.
Such a move, she said, would “encourage unemployed workers on the sidelines to return to work” while giving them “plenty of runway to land a good job before losing the federal enhancement.”
The chamber is “hearing daily from employers about the difficulty of finding workers,” Watts said.
“This is across all sectors and all business sizes,” she said. “Employers are doing everything they can to meet rising demands with limited workforces, including increased pay, asking employees to work longer hours and scaling back operations. It is a real and serious problem that, if left unaddressed, will result in business closures and harm to Kentucky’s economic recovery.”
Watts added that the business community recognizes that ending the extra jobless payments won’t be a “cure-all” for the current workforce shortage.
“Important steps must also be taken to increase access to high-quality child care, retrain and reskill workers and increase vaccination rates,” she wrote. “We also believe that return-to-work incentives, which other states have implemented, are worth exploring, particularly incentives that assist working parents (to) afford and have access to child care.”