In Blow to GOP Narrative, Missouri Cut to Jobless Benefits Not Boosting Hiring

The Republican narrative that enhanced unemployment benefits are dissuading people from returning to work--and that cutting off the aid is necessary to boost hiring--is running up against reality in the GOP-led state of Missouri, where officials have yet to see any significant increase in job applicants since the governor cut off pandemic-related federal programs last month.

"There may be areas where some employers are struggling to staff positions, but the likely obstacle is not overly generous UI benefits--instead it is wage offerings that are too low to make these jobs attractive."
--David Cooper, Economic Policy Institute

The New York Timesreported Sunday that Missouri workforce development personnel "said they had seen virtually no uptick in applicants since the governor's announcement, which ended a $300 weekly supplement to other benefits."

"And the online job site Indeed found that in states that have abandoned the federal benefits, clicks on job postings were below the national average," the Times noted.

On May 11, Missouri's Republican Gov. Mike Parson announced that the state would end its participation in federal unemployment programs aimed at helping jobless workers make ends meet amid the pandemic-induced economic crisis, which permanently destroyed millions of jobs and pushed countless people into dire economic circumstances. Parson's directive officially took effect on June 12.

Missouri was among the first of the 25 Republican-led states that have ditched the emergency federal programs, which offered unemployment aid to jobless gig workers, provided a weekly benefit boost, and extended the duration of assistance. Last week, Louisiana became the first state headed by a Democratic governor to cut off the federal unemployment programs.

In his announcement last month, Parson cited "conversations with business owners across the state" to prop up his claim that companies are struggling to hire workers "because of labor shortages resulting from these excessive federal unemployment programs."

The Missouri governor went on to declare that the federal unemployment programs "have ultimately incentivized people to stay out of the workforce"--a now-common GOP refrain that economists have criticized as simplistic and unsubstantiated, at best.

Missouri's experience since Parson's order--which has succeeded in quickly kicking residents off benefits--suggests that factors other than enhanced unemployment aid are keeping people from returning to work in the state, from lack of child care to employers' refusal to pay living wages to pandemic-related fears. Missouri is currently the U.S. hot spot for the ultra-contagious delta variant of Covid-19.

The Timesreported Sunday that hardly anyone showed up at a recent job fair in the St. Louis suburb of Maryland Heights, where the employment opportunities on offer included a $10.30-an-hour position at a home healthcare agency--with no benefits.

"An ice rink, concert, and entertainment center was looking for 80 people, paying $10.30 to $11.50 for customer service representatives and $13 for supervisors. But the jobs last just through the busy season, a few months at time, and the schedules, which often begin at 5 am, change from week to week," the Times noted. "In St. Louis, a single person needs to earn $14 an hour to cover basic expenses at a minimum standard, according to M.I.T.'s living-wage calculator. Add a child, and the needed wage rises just above $30. Two adults working with two children would each have to earn roughly $21 an hour."

Terri Waters, a Missouri resident who attended the job fair in search of a marketing position, told the Times that workers' reluctance to accept low-wage jobs in retail and other sectors stems from a desire to improve their material conditions--not indolence or complacency, as Republican officials often claim.

"It's really demanding work, you're on your feet and by the end of the day you're tired and sore," Waters said of the $11.50-an-hour retail job she's been working since her marketing business faltered amid the pandemic.

"It's not that people are being lazy," she added. "They just want something better to go back to."

Economists and progressive lawmakers have argued in recent weeks that what Republicans, the U.S. Chamber of Commerce, and others have dubbed a "labor shortage" fueled by supposedly excessive unemployment benefits is in fact a wage shortage caused by businesses refusing to pay their employees adequately.

"There may be areas where some employers are struggling to staff positions, but the likely obstacle is not overly generous UI benefits--instead it is wage offerings that are too low to make these jobs attractive," David Cooper, a senior economic analyst at the Economic Policy Institute, wrote in a blog post last month.

The anecdotal experiences of some businesses in recent weeks seem to bolster that interpretation. Earlier this month, the Washington Postcited the story of Klavon's Ice Cream Parlor, a Pittsburgh shop that was struggling to find applicants for open jobs for which it was offering to pay $7.25 an hour plus tips.

"So owner Jacob Hanchar decided to more than double the starting wage to $15 an hour, plus tips, 'just to see what would happen,'" the Post reported. "The shop was suddenly flooded with applications. More than 1,000 piled in over the course of a week."