Gov. Laura Kelly may end Kansas’ participation in federal unemployment programs to incentivize workers

Andrew Bahl
Topeka Capital-Journal
Viet Lam, owner of 4Guys Bistro, 732 S. Kansas Ave., mans the ordering computer during Thursday's lunch hour. Lam is one of many Kansas employers who say they are struggling to hire workers, something he believes is in part due to federal unemployment programs.

Gov. Laura Kelly said Thursday she was weighing whether to end Kansas' participation in federal unemployment programs started during the COVID-19 pandemic, as many Republican states say they will pull out of the initiatives.

Businesses have complained of difficulties in hiring workers, something many Republicans have chalked up to a slate of programs aimed at cushioning the blow for residents laid off due to the economic turmoil of the past year.

Kelly's office confirmed in a statement Wednesday that Kansas wasn't following in the footsteps of Missouri, Iowa and about a dozen other state in ending their participation in the programs.

But she told reporters Thursday that could change, as her office was still reviewing relevant data in an effort to make a more informed call.

"We have not really made a final decision on that issue. It is something we are exploring," Kelly said. "I understand there are some concerns on the part of business that, perhaps, it is the unemployment benefits that are creating a lack of applicants for jobs, particularly lower-paying jobs."

More:Gov. Laura Kelly and GOP lawmakers reach a deal on how to dole out federal COVID-19 relief dollars

Gov. Laura Kelly said Thursday she was weighing whether to end Kansas' participation in federal unemployment programs started during the COVID-19 pandemic.

She noted there could be other factors in play creating difficulties in attracting employees. Economists have posited that access to child care, low pay and a lag in getting individuals fully vaccinated could also be contributing to the workforce shortage.

"There is conflicting anecdotal data right now and I need to just study the issue (to see) if that was the cause or if there are other things we need to do to ensure that our employers have access to the workforce," Kelly said.

The initiatives at issue include a $300-per-week bonus for those collecting benefits, as well as an extended benefits for those who have exhausted regular unemployment and an effort to provide support to gig workers and the self-employed.

Republicans push for Kansas to end participation

Republicans in the state's Congressional delegation are urging Kelly to pull out of those programs, arguing a weaker-than-expected April jobs report is evidence the labor market is being hindered by the continued existence of the programs.

"It has been more than a year since the pandemic's beginning, and we are beginning to see a return to normalcy thanks to the rapid development of safe and effective vaccines," U.S. Rep. Ron Estes, R-Kan., said in a statement Wednesday. "Yet small businesses are still struggling to keep their doors open because the government is paying people to stay home instead of work."

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U.S. Sen. Roger Marshall, R-Kan., has introduced legislation to end federal unemployment programs started during COVID-19. Marshall and others argue they are creating a disincentive for workers to avoid re-entering the workforce.

And U.S. Sen. Roger Marshall, R-Kan., has introduced legislation to end the programs, which are set to run until Labor Day, in every state.

He renewed that push Thursday, calling on his home state to withdraw immediately, saying the rollout of vaccines should be enough of a push to get individuals back in the workforce. Currently, 44% of Kansans have received at least one vaccine dose.

State-level Republicans joined the call Thursday as well, with House Speaker Ron Ryckman, R-Olathe, saying Kelly is "behind the eight ball" on the issue.

"If Laura Kelly were serious about recruiting new businesses and jobs to Kansas, she wouldn’t be making it harder for businesses to recruit the workforce they need," Ryckman said in a statement, a not-so thinly veiled reference to Kelly's recent efforts to tout economic development in the state.

There are questions as to whether states can legally opt out of the programs. In a letter to U.S. Labor Secretary Marty Walsh, U.S. Sen. Bernie Sanders, I-Ver., argued there was a congressional mandate for the payments to continue — regardless of what individual governors decide.

Businesses complain of workforce troubles

The unemployment rate in Kansas has returned to roughly pre-pandemic levels, although there are roughly 9,000 more individuals on the unemployment rolls than in February of 2020. 

Hiring issues have put a strain on local businesses, particularly those in the hospitality and retail industries. 

More:Topekans are going out to eat more. Staffing shortages have restaurants struggling to meet the demand.

Viet Lam, owner of 4Guys Bistro in Topeka, said his restaurant has had to limit its hours due to a lack of staffing.

While he has fluctuated the starting wage in an effort to attract prospective employees, he said many have expressed an initial interest only as a way of satisfying job search requirements for unemployment benefits.

Lam expected things to improve after the unemployment programs ended — and he supported doing so sooner rather than later.

"I understand that people, they get what they get (on unemployment)," Lam said in between ringing up orders during the Thursday lunch rush. "We're worried right now, but there is nothing we can do."

Complicating things in Kansas is the fact that many residents are still waiting on the same expanded benefits that some are pushing to end.

More:Lawmakers finalize plan to ensure Kansas Department of Labor unemployment system woes aren't repeated

As of Monday, the Kansas Department of Labor reported a backlog of over 11,000 residents waiting for payments from the Pandemic Unemployment Assistance program, which targets the self-employed.

Of the roughly $20 million in benefit payments last week, about 80% of the funds came out of the federal programs.

Republicans have stiffly criticized how the Kelly administration has responded to the plight of out of work Kansans who have struggled to get through to KDOL and access their benefits — something Kelly said was "ironic" in light of their recent position on ending many of those same programs.

"I have always researched the issues, figured out what to do and acted accordingly, regardless of the political pressure that I get," Kelly said.