Missouri will halt additional unemployment benefits provided by the federal government during the pandemic next month, Gov. Mike Parson announced Tuesday.
The move follows orders by Republican governors across the country to withdraw from the federal programs by the end of June to push workers back into the job market. Last week, a Department of Labor report showed the country added an underwhelming 266,000 jobs in April, fueling GOP claims that the benefits were keeping people at home.
“Despite our economy’s strong comeback many business owners and employers across the state are still struggling, not because of COVID-19, but because they can’t find people to fill the jobs to help address this labor shortage,” Parson said Tuesday.
The enhanced benefits will end June 12 in Missouri, two weeks earlier than in other states that are withdrawing from the programs. Parson said he wanted to end the extra benefits as early as possible, after giving required notice to the federal government. The maximum weekly unemployment payment from the state is $320.
Parson’s order applies to all six special unemployment benefits Congress created to give jobless workers as much as $600 a week when the pandemic began last year, on top of state unemployment payments. The latest Biden aid bill renewed weekly payments of $300 through the fall.
About 56,000 workers are receiving regular state unemployment benefits, according to a Department of Labor and Industrial Relations spokeswoman, and 90,500 are receiving federal enhancements.
Republican lawmakers also are pushing to roll back the enhanced unemployment benefits nationally. Kansas Republican Sen. Roger Marshall and 10 Republican co-sponsors introduced legislation Tuesday to repeal the $300 increase in benefits.
“While there are certainly people that needed access to increased unemployment benefits during the heart of this pandemic, we should not be in the business of creating lucrative government dependency that makes it more beneficial to stay unemployed rather than return to work,” Marshall said.
Missourians receiving unemployment benefits must prove they are looking for work to get the payments. The state’s unemployment rate is only 4.2%, but Parson said there are more than 221,000 open jobs across the state that businesses are struggling to fill.
Economists say evidence is mixed on the role of the enhanced benefits in the current labor market. Some say workers are still staying home over continued fears of COVID-19 infection, the need to watch children in remote school or a desire for higher wages.
Traci Gleason, spokeswoman for the Missouri Budget Project, a liberal think tank, said those factors make for an “incomplete” economic recovery.
“We think the federal enhancements are good for Missouri,” she said. “It’s important to keep that money flowing through our economy.”
One March study found a 3.6% decrease in job applications for every 10% increase in unemployment benefits. Studies from last summer found no evidence the $600 enhancement was tied to disincentives to work. The Biden administration last week dismissed claims the benefits kept jobs growth low in April.
Economist Ken Kriz, a professor at the University of Illinois in Springfield, said with employment in Missouri nearly back to it’s pre-pandemic levels, “one can easily justify removing” the enhanced benefits. Prior to last March, close to 62% of Missouri’s adult civilian population was working, according to the Bureau of Labor Statistics. That number dropped precipitously to 54% last April and returned this March to under 61%.
He added that there’s been “no large-scale study” proving the enhanced benefits are driving the current labor shortage.
. “If that logic was correct we shouldn’t have seen the labor force come back,” Kriz said.
Asked whether the state’s labor department has evidence linking the open jobs to the availability of federal unemployment benefits, Parson said the struggle to fill jobs is clear across the state. He denied the shortage was driven by low wages, saying the market would dictate wages.
“All you got to do is get out and drive down the road anywhere in Missouri and there’s ‘Help Wanted’ in every location,” he said. “This is just more of a common-sense issue ... We’re looking for people to go to work and it’s time to go back to work.”
Missouri Congresswoman Cori Bush, a Democrat represents the St. Louis area, slammed the decision and called the benefits “an essential lifeline.”
“Put simply, today’s decision by Governor Parson is cruel,” Bush said in a statement. “It will only serve to punish those most impacted by this pandemic and who need this relief the most.”