May 11, 2021 - In order to address workforce shortages across the state, Governor Mike Parson directed the Missouri Department of Labor and Industrial Relations (DOLIR) to notify the U.S. Department of Labor that Missouri will end participation in all federal pandemic-related unemployment insurance programs effective Saturday, June 12, 2021 at 11:59 p.m.
“From conversations with business owners across the state, we know that they are struggling not because of COVID-19 but because of labor shortages resulting from these excessive federal unemployment programs,” Governor Mike Parson said. “While these benefits provided supplementary financial assistance during the height of COVID-19, they were intended to be temporary, and their continuation has instead worsened the workforce issues we are facing. It's time that we end these programs that have ultimately incentivized people to stay out of the workforce.”
“As I travel the state, from Sarcoxie to Hannibal and all points in between, over-arching concerns from business owners is the shortage of employees,” Lieutenant Governor Mike Kehoe said. “Across every industry, businesses cannot compete against federal largesse. Our economy is built upon an active and vibrant workforce, and we should be cultivating job-creation and employment rather than inhibiting them. The jobs exist and the demand exists, and I applaud the governor for taking this bold and decisive action.”
The termination announced today applies to the following programs:
Pandemic Unemployment Assistance;
Emergency Unemployment Relief for Government Entities and Nonprofit Organizations;
Federal Pandemic Unemployment Compensation;
Pandemic Emergency Unemployment Compensation;
100 Percent Reimbursement of Short-Time Compensation Benefit Costs Paid Under State Law; and
Mixed Earner Unemployment Compensation.
“We know that one of the last remaining hurdles to full economic recovery is addressing this labor shortage. Even with unemployment at only 4.2 percent, there are still 221,266 known job postings across the state,” Governor Parson said. “The solution to close this gap is not the excessive spending of taxpayer dollars by the federal government, but rather getting people back to work and to a sense of normalcy for themselves and their families. Today’s action ensures that we will fill existing jobs as well as the thousands of new jobs coming to our state as businesses continue to invest and expand in Missouri.”
In a letter to the U.S. Department of Labor, Missouri Department of Labor and Industrial Relations Director Anna Hui gave notice of Missouri’s intention to terminate all federal pandemic-related unemployment programs.
“During the last recession in 2008, the federal government contributed $25 per week to supplement state unemployment benefits. During the latest economic downturn, Washington poured in $600 per week in addition to Missouri’s weekly benefit of up to $320,” said Director Hui.
“Even after the original $600 supplement expired, it was replaced by a federal supplement that provides an extra $300 per week on top of Missouri’s existing state benefit, meaning thousands of claimants continue to receive $620 per week or more,” Director Hui continued. “The unemployment system is designed to provide a temporary safety net as workers look to reenter the job market. Leaving the level of benefits artificially high would prevent a return to full employment in our state.”
Today’s action follows steps taken last July to require claimants to again conduct weekly work searches in order to be eligible for unemployment benefits. This work search requirement had originally been waived in March of 2020 as part of an agreement with the federal government to receive funds under the CARES Act.
"Before the pandemic, the number one problem faced by businesses in Missouri was finding qualified workers to fill available jobs," said Ray McCarty, president and CEO of Associated Industries of Missouri. "Since the COVID pandemic and the extra benefits allowed by the federal government, that problem has been made much, much worse. Potential workers have figured out if they don't answer their phones, they are not technically rejecting employment, allowing them to continue collecting $15 per hour without lifting a finger. Employers complain that when they appeal unemployment claims, the Missouri Department of Labor is facing a backlog of appeals, meaning the claimants continue to receive benefits. This federal bonus unemployment has outlived its usefulness and must be terminated. We thank Governor Parson for taking this bold step and we hope workers will want to fill some of the more than 200,000 open jobs that are available right now," said McCarty.
In April 2021 alone, the federal government paid out $109 million in extra federal unemployment benefits to Missouri recipients, according to federal unemployment data.
UPDATE: Missouri is joining at least eight other states in this action as Alabama, Arkansas, Iowa, Mississippi, Montana, North Dakota, South Carolina and Tennessee have all taken some action to limit or eliminate the additional federal unemployment assistance programs.