Governor Parson’s decision to reject federal unemployment assistance is an affront to Missouri workers and could prove harmful to the state’s economy. Ending the assistance, which has kept thousands of Missouri families afloat, would punish Missouri families who are already suffering through an economic downturn.
In Missouri, an estimated 68.5% of unemployment benefits paid out during the pandemic have come from the federal partnership. This partnership has covered critical workers in the gig economy and independent contractors who are otherwise excluded from state UI benefits. An analysis of the last thirty years shows that in the second quarter of 2020, 6.1% of the state’s wages came from unemployment benefits, almost three times the highest ever on record for the state. The third quarter, when some benefits began to expire, still saw 3.4% of wages from UI assistance.
“Federal benefits keep money flowing through our economy, helping families make ends meet and strengthening the recovery for all Missourians, said Amy Blouin, President & CEO of the Missouri Budget Project. “Our economic recovery is nuanced, and many Missourians haven’t been able to return to work because they still have children home from school or jobs aren’t available in their areas.”
“The federal assistance kept my family together until the hospitality industry recovers. $300 a week is the difference between me keeping a roof over my head and losing everything. Without it, I would have to forego other bills and potentially be forced into high-interest payday loans that I know are irresponsible. But while the economy still recovers, what choice do I have? Forcing me back to work at McDonald’s or a low-paying, labor-intensive job doesn’t really help me, or my employer, to whom I have been loyal for more than seventeen years.” said Lisa Jones, a member of UNITE HERE 74 and seventeen year employee of the Renaissance hotel in downtown St. Louis. “The Governor might think the pandemic is over, but until groups start booking rooms and conferences again, the pandemic is still very real to workers.’
“Missouri businesses that are complaining about not being able to recruit workers are only telling half the story,” says Richard von Glahn, policy director of Missouri Jobs with Justice. “Businesses that are having a hard time finding workers need to look at what they are offering in terms of pay and benefits to see if they are competitive in the labor market. The fact that a $10.50/hour job with no benefits and an inflexible schedule isn’t going to cut it anymore should be celebrated as a victory for workers and families.”
In his April 28th report, Federal Reserve Chairman Jerome Powell agreed that there hasn’t been sufficient wage growth for businesses to credibly claim there is a market shortage, stating that “We don’t see wages moving up yet. And presumably we would see that in a really tight labor market.” Some business owners agree. “I think all of us are going to have to reinvest in people – because there are plenty of jobs out there to do for a higher wage,” Matt McGuire, owner of Louie DeMun said.
With his action today, Governor Parson seeks to undermine any growth in wages in the lowest paid industries and instead force vulnerable workers back into a low-wage economy. “This action is fiscally irresponsible and cruel,” said von Glahn. “Shredding the safety net doesn’t make families stronger, just more vulnerable to exploitation. Shame of Governor Parson for putting the desires of big corporate employers above the needs of Missouri families.”
Today’s announcement comes on the heels of other decisions that would harm workers, including the callous attempt to recoup funds used by families in the midst of the crisis and proposals to cut Missouri’s state unemployment period down to the national low of just 8 weeks.