FRANKFORT, Ky. (AP) — Cutting off the extra federal payments going to unemployed Kentuckians would hurt the state’s economy as it recovers from the COVID-19 pandemic, Gov. Andy Beshear said Monday.
The Democratic governor said he’s willing to consider ending the weekly $300 federal unemployment payment eventually but quickly added: “That doesn’t mean we will.” The extra money is set to expire in September.
The Bluegrass State’s most powerful Republican, U.S. Senate Minority Leader Mitch McConnell, criticized the extra federal benefits Monday. He said governors are “having to clean up this mess” as many businesses struggle to find workers. Meanwhile, two GOP state lawmakers urged Beshear to terminate the supplemental payments, saying the benefit is contributing to a labor shortage.
Beshear said he’s trying to “thread the needle” of maintaining the extra federal payments that pump tens of millions of dollars into the state’s economy each week while encouraging people to go back to work as the economy fully reopens.
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.
Two Republican members of the Kentucky House — Reps. Russell Webber and Phillip Pratt — said the federal enhancement is causing new hardships for businesses. Pratt said the extra benefit “leaves unemployed Kentuckians uninspired to head back to work.” The two lawmakers said the supplemental payment should be terminated.
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.”