Beshear: Ending extra jobless aid now would hurt economy

Published 5:35 am Tuesday, May 18, 2021

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.