As a coalition of organizations representing Kentucky workers, families and communities, we urge state lawmakers to protect expanded pandemic unemployment benefits until the federally funded program ends in early September.
The economy fell in a deep hole during the pandemic, and though progress is beginning to be seen, we still have far fewer jobs than before the crisis began. An extra $300 per week in Federal Pandemic Unemployment Compensation (FPUC) is providing a crucial bridge for families and the economy as we begin to emerge from the COVID-19 economic crisis.
Many of the Kentuckians still receiving unemployment benefits are dealing with a recent job loss, living with a compromised immune system, recovering from “long COVID,” looking for a job in fields where opportunities are still scarce, or shouldering child and elder care responsibilities.
Extra federal money helps spur demand and boost jobs. Since FPUC was reinstated by the relief package passed by Congress in December, it has brought an estimated $328 million into Kentucky. This money has then been used by claimants to pay for their everyday needs like groceries, utilities and transportation — spending that in turn supports businesses and jobs as it flows through the economy.
Eliminating the $300 a week in benefits early, as some states are now doing, would cost Kentucky an estimated $229 million and hurt our economy as people would necessarily buy fewer goods and services. Additionally, because FPUC is a federally funded benefit, all of this money comes from out of state and costs Kentucky businesses and Kentucky state government nothing.
Some are falsely claiming that the extra $300 in benefits is a major barrier to people working, but those making these claims cannot point to evidence to support them. Careful academic research on the much bigger $600 benefit last year found it had little to no impact on employment.
Also, data clearly shows that Kentuckians are giving up jobless benefits and going back to work. Over the last year the number of Kentuckians receiving unemployment benefits has fallen dramatically while the number of people employed has been rising. Nearly 200,000 net jobs have been filled since the worst point in the crisis last April, and the number of Kentuckians receiving unemployment benefits is now just 18% of what it was at that time.
Most of the complaints about an alleged labor shortage come from restaurants offering low wages, few benefits and little workplace flexibility. Even with the limited appeal of restaurant work, people are returning to those jobs in huge numbers: 40,600 more Kentuckians work at restaurants now than at the worst point in the COVID recession. Those restaurants having more trouble attracting workers can offer competitive compensation and more accommodations.
Cutting off FPUC would hurt a wide range of workers who are receiving a benefit they need at a time when the economy is still struggling. In fact, only 10% of Kentucky workers receiving state unemployment benefits in March had previously worked in the accommodation and food services sector. The two industries with the most workers still receiving jobless benefits are manufacturing and construction. Along with these sidelined workers, over 14,000 self-employed workers and business owners, including some restaurant owners, are receiving Pandemic Unemployment Assistance (PUA) and the extra $300 in FPUC. They may be forced to permanently shutter their businesses if Kentucky prematurely ended participation.
Cutting off the $300 in supplemental benefits would also widen existing inequities and put up new roadblocks for Kentuckians already facing disproportionate harms from the pandemic. Black Kentuckians, for example, make up 13.1% of laid-off Kentuckians currently receiving unemployment benefits, a larger share than their 9.8% of the workforce.
Kentucky should continue to administer the expanded federal benefit as long as it is available. Last summer when the $600 weekly version of FPUC expired, we heard from many Kentuckians about how their hardship increased without that income support. Parents of young children, Kentuckians caring for ailing loved ones and many others did not know how they would buy needed medication, keep the lights on and pay their mortgage or rent.
While COVID-19 cases are falling and more Kentuckians are getting vaccinated, the pandemic isn’t over yet, and the economy has a long way to go until it is back to pre-pandemic conditions. Kentucky still has 98,100 fewer jobs than before COVID-19 hit, and nearly 1 in 3 Kentucky adults report difficulty covering usual household expenses.
While the economy is getting back on its feet, Kentucky’s leaders must continue to protect this critical support to families and essential boost to our recovering economy.
Advocacy Action Network
Ashland Area Labor Council
Greater Louisville Central Labor Council
Homeless and Housing Coalition of Kentucky
IATSE Local 17 Stagehands
Jefferson County Teachers Association
Kentucky Center for Economic Policy
Kentucky Coalition Against Domestic Violence
Kentucky Council of Churches
Kentucky Equal Justice Center
Kentucky State AFL-CIO
Kentucky Voices for Health
International Brotherhood of Electrical Workers Local 212
United Auto Workers
United Mine Workers of America
United Food and Commercial Workers Local 227