A construction company in Buckner is down 20% from its regular manpower. A small marketing research firm in Louisville can attract only about a quarter of its employees back from furlough. And at Central Bank in Lexington, they’re still short on tellers, casting for talent inside a much smaller applicant pool than usual.
Kentucky companies, large and small, are struggling to hire employees as they seek to return to normalcy from the coronavirus pandemic. And they’re all largely citing the same reason: The weekly $300 federal unemployment checks, included in the American Rescue Plan, make it easier for people to stay home, rather than return to their shifts.
And now Republican Senate Leader Mitch McConnell is laying the labor shortage at the feet of the Democratic Party’s generous spending package.
“We all knew what would happen, but Democrats insisted on paying people more not to work,” said McConnell on the Senate floor this week.
The Kentuckian said almost every employer he’s spoken with has cited the extra jobless benefit as a key reason people aren’t going back to work.
And it’s not only in Kentucky.
Restaurants in Miami have placed signs in their windows warning customers to expect longer waits due to server shortages. A Montana motel bracing for a summer surge of tourists cited just one applicant in a week’s time. In Washington, D.C., one restaurant seeking to hire 60 employees is offering bonuses in cryptocurrency as an allure. And at Applebee’s restaurants across America, managers are handing out free appetizers, simply for submitting an application.
“This has been one of the hardest seasons to hire,” said Tim Ernst, a human resources official at East and Westbrook Construction for more than two decades. “As long as they don’t have skin in the game … they’re going to sit at home.”
In Washington, Republicans, led by McConnell, are coordinating their messaging around the problem, eyeing an opportunity to poke a hole in Democrats’ claims that their rescue package is primarily responsible for an economy on the mend. In fact, they argue the subsidy has become a tax on Americans who are working.
Sen. Marsha Blackburn of Tennessee has coined the phrase “Biden bucks.” Sen. Tommy Tuberville of Alabama said he’s getting “chewed up” at home “because we’re up here giving money out.” Sen. Marco Rubio of Florida has introduced legislation that would slash the weekly benefit in half by the end of the month, before a total repeal of the weekly $300 stipend in June.
Right now the benefit is set to expire in September, leaving some businesses worried that the struggle to hire could continue throughout the summer.
“It’s not because people are lazy … it’s because people are logical,” said Rubio.
Economists say there are other factors at play. A significant portion of the population is still waiting to be fully vaccinated. Many parents are still home-schooling, leaving them unable to fully return to work. Then there are those who still fear the virus and may just be taking a little more time to step fully back into normalcy.
“I don’t think there is much of a case here,” said Dean Baker, an economist with the Center for Economic Policy and Research, citing studies showing minimal impact on the labor force when the federal unemployment benefit was $600 last year. “If $600 a week didn’t have much impact, it’s hard to see $300 a week having much impact … My guess is that we will see much of this go away in a few weeks.”
Many Republican governors aren’t waiting. Nearly two dozen states have already moved to halt the federal checks in their states to, as McConnell put it, “clean up this mess.” While Kentucky Gov. Andy Beshear, a Democrat, is also feeling pressure to do so, he’s resisted it thus far. Meanwhile, Sen. Bernie Sanders of Vermont is urging President Joe Biden to block these efforts, saying that employers wouldn’t have this problem if they paid people “a living wage.”
Steve Rudolf, an assistant vice president of Human Resources at Baptist Health in Louisville, agreed the entire dilemma raised a larger systemic issue around the worth of a job.
“You really are getting into living wage terrority, what’s a living wage for somebody to support themselves, their families and provide child care?” Rudolf said.
Kentucky has long struggled with workforce participation, making this issue even more acute.
Ashli Watts, the president and CEO of the Kentucky Chamber, said the state has lost 100,000 workers since the pandemic’s onset — a total that will take ample time to come back.
‘We’re back to the number of women in the workforce that we had around the 1980s. We’ve lost that many women,” she said.
She said while the federal unemployment benefits are certainly a factor, she’d also prefer to see the entire issue depolarized politically.
“It’s going to take time to recover, it’s not going to be immediate,” she said.
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(Bryan Lowry contributed to this report.)
