UPDATED: Business group requests stop to federal unemployment aid

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(Updated to include reaction from legislative leaders and some advocates)

A group of nearly 200 business interests is urging Gov. Laura Kelly to end the state’s participation in federal pandemic-related unemployment insurance programs in order to encourage Kansans to return to work.

In a letter signed by 181 businesses, chambers of commerce and professional organizations, Kelly is being asked to withdraw from the federal programs that provide additional unemployment benefits.

“We believe this additional benefit was an important short-term solution to help individuals who were adversely impacted at the start of the pandemic,” the letter says.

“However, 13 months later, many employers are finding it nearly impossible to fully staff their business which impacts the supply chain and timely delivery of goods and
services,” the letter stated.

The letter was signed by the Kansas Chamber of Commerce, Associated General Contractors of Kansas, Associated Wholesale Grocers, the Kansas Farm Bureau, the Lawrence Journal-World, the Auburn Washburn School District as well as chambers of commerce in Olathe and Lenexa, among many others.

The governor’s office declined comment on the letter although Kelly has indicated she didn’t intend to end the benefits immediately.

“While the Governor will monitor this situation closely over the coming months, her primary focus remains on continuing her administration’s record-setting efforts recruiting new businesses and jobs to Kansas,” the governor said in a statement last week.

Late Wednesday, WIBW Televison in Topeka reported that several groups listed as signing the letter now say they didn’t sign the letter.

WIBW reported that the Auburn Washburn School District said it did not sign the letter and didn’t know how it was included.

Meanwhile, Democratic state Rep. Jason Probst posted on Facebook that the Hutchinson Public Library and the Greater Wichita YMCA  “unequivocally” told him that they did not authorize being added to the letter.

“I have some questions out to people about this, so everyone might hold their wrath toward specific companies or organizations until I can get more details,” he wrote.

“But it seems some of the organizations pushing this (I suspect I know which ones, but won’t say until I know for certain) might be playing fast and loose with ethics and rules.”

Kansas Chamber spokeswoman Sherriene Jones-Sontag said in an an email late Wednesday that the Kansas chapters of the National Federation of Independent Business and the Society for Human Resources Management circulated the letter among their members.

“Their members may not have realized that chamber helped lead this effort to communicate their concerns with the governor,” she said.

“SHRM and other HR professionals shared the letter and gathered names and those were all combined and sent to the chamber to be added to the letter.”

NFIB and other organizations sent their own list of names, she said.

“I assure you that every employer listed on the letter confirmed with their business organization that they wanted to be listed,” she said.

The chamber spokeswoman then fired back at Probst for his Facebook comments.

“Rep. Probst should get his facts straight before making accusations of organizations ‘playing fast and loose with ethics and rules’ on social media,” she said.

“We have emails from every employer asking to be included on this letter through various membership organizations interested in this issue.”

The governor issued her statement a day after Missouri Gov. Mike Parson announced plans to end his state’s participation in those federal unemployment programs.

Kelly later told reporters she understood the concerns raised by businesses and was still reviewing the matter and no final decision had been made.

Other states such as Indiana, Texas, Alaska, and Oklahoma are ending federal unemployment benefits. At least 21 states are reportedly dropping supplemental federal unemployment benefits.

Probst, the House assistant minority leader, chided some of the businesses that signed the letter on social media.

“I sort of laughed to myself as I looked through this list – it includes groups and associations that often do their level best to make life harder for the average person,” Probst posted on Facebook.

“And I can see that some of the companies that signed on to this letter have a history of paying low salaries, or expecting people to work for peanuts in the far-off promise that they’ll get paid more in the future,” he wrote.

Republican House leaders – Speaker Ron Ryckman Jr, House Majority Leader Dan Hawkins and Speaker Pro Tem Blaine Finch – echoed the letter from the business community.

“Gov. Kelly continues to hold Kansas back,” they said in a statement.

“We join with Kansas employers in calling on Gov. Kelly to end this counter productive program and help get Kansans back to work.”

Businesses across the country are reporting difficulties in hiring employees although the unemployment rate continues to be higher now than it was before the pandemic.

The national unemployment rate in April was 6.1%, significantly lower than it was a year ago but still higher than 3.5% in February 2020.

Similarly, the state’s unemployment rate has receded to 3.7% in March, but still higher than the 3.2% reported in March 2020.

A National Federation of Independent Business survey of 1,500 small business owners found that 44% had job openings they couldn’t fill in April, up two points from March.

April’s results were 22 points higher than the 48-year historical average of 22 percent, the organization said.

There are about 21,800 Kansans who are receiving federal unemployment assistance, including $300 on top of state benefits as well as extended benefits after the traditional 26 weeks of unemployment benefits runs out.

The group said in its letter that there may be other barriers for Kansans trying to enter the workforce.

It asked the governor to direct any available dollars toward incentives that would encourage Kansans to return to work, including signing bonuses, temporary childcare assistance as well as training and retraining initiatives.

Senate Minority Leader Dinah Sykes said there was ample opportunity during the legislative session to address factors preventing Kansans from going back to work, including access to affordable childcare and hazard pay for frontline workers.

“I am skeptical, to say the least, of the motives of politicians who have spent months undermining Gov. Kelly and criticizing our under-resourced Department of Labor’s response to claims and now want these same benefits to stop.

“Unemployed Kansans should not be punished for our legislature’s failure to provide them with adequate tools to keep their families safe during a once-in-a-generation pandemic,” Sykes said in a email.

The Century Foundation, a progressive think tank headquartered in New York City, predicts that ending the state’s participation in the supplemental unemployment programs would cost Kansas about $200 million in federal aid.

“Unemployed Kansans face daunting obstacles, but we don’t believe enhanced unemployment benefits are among them,” said John Wilson president of Kansas Action for Children.

“Business and local government leaders should focus on the actual barriers that keep people out of the job market,” he said in an email.

“With COVID-19 still circulating widely, hesitation to return to jobs requiring contact with potentially unvaccinated people is understandable,” he said.

Probst said on Facebook that the issue of centered on wages not unemployment benefits.

“I have been arguing for years that depressed wages are part of the reason for any perceived labor shortages,” he said.

The letter from the business groups comes just after the state’s Republican congressional delegation urged the governor to withdraw from the program.

U.S. Senators Jerry Moran and Roger Marshall as well as U.S. Reps. Ron Estes, Jake LaTurner and Tracey Mann said they are receiving complaints from businesses that are unable to hire workers as the economy starts to come to life.

“Across the state, we’re hearing more and more from businesses searching for the employees they need to reopen yet struggling to make hires due to the generous benefits offered through the unemployment system,” the delegation wrote in a letter.

“The extension of the generous $300 per week in additional federal benefits until September, when coupled with the extended state benefits, provides a lucrative government incentive to stay home despite clear signs that the economy is recovering and life is trending toward normal,” they wrote.

“We must end the federal incentive to stay home so that we can truly reopen the economy, provide Kansans with meaningful and purposeful work, and get our country back to normal.”