A new report from the Foundation for Government Accountability argues that continued federal unemployment benefits stifle worker and family efforts to return to a pre-COVID-19 economy. Despite this, Kansas Governor Laura Kelly refuses to withdraw from programs such as the weekly $300 unemployment bonus, thus slowing Kansas’ recovery.
Since late June, the state of Kansas has seen a 50.6% increase in new weekly unemployment claims, with new weekly unemployment claims numbers remaining stagnant between 9,000 and 10,000 claims since the beginning of May. In the month of June, Kansas had the highest growth in the unemployment rate nationwide. By comparison, in the 26 states who voluntarily ended the unemployment bonus, the number of people filing new unemployment claims has decreased by more than 35% since May 1st. Our neighbor Missouri has seen the number of people filing new unemployment claims decrease by 54% in the same time frame. Success stories such as Arkansas’ 160,000 new jobs since opting out of the benefits aren’t unique, and Kansas should follow a similar path for a faster economic recovery.
The Kansas government should consider ending these temporary benefits due to their ineffectiveness and potential harm to the same people they’re trying to help. For every 100 unemployed people, there are 176 unemployment checks mailed out which contain easily stolen personal information like Social Security numbers. The Inspector-General of the federal Department of Labor noted these checks could be a “high-value target” for identity theft. In fact, the Kansas Department of Labor determined that it lost $140 million due to fraudulent unemployment claims during 2020. If the state can’t protect its own money, why should it be trusted to protect your information?
All of this is happening while Kansas bleeds private-sector jobs and continues to expand government bloat. According to the Bureau of Labor Statistics, 1.4 million private-sector jobs were added to the economy nationwide in the second quarter, with Kansas’ neighbors gaining 60,700 of those positions. Yet, Kansas lost 4,000 private-sector jobs while adding 8,500 government jobs. It shouldn’t be a surprise that three of Kansas’ neighbors that gained jobs (Missouri, Nebraska, and Oklahoma) all ended their unemployment bonus programs in Mid-May. Kansas’ other neighbor Colorado who has seen the most private sector growth in the region at 52,400 new jobs, is pursuing a different strategy of incentivizing new hiring by using the $300 unemployment check as a “signing bonus.”
The idea of the $300 weekly unemployment benefit is noble and is believed to have supported families before they could return to work or find a new job in the early stages of the pandemic. However, a report by the San Francisco Federal Reserve notes that the prolonged pandemic recovery has decreased people’s willingness to work and thus made people more likely to choose to live off the unemployment check versus a similar wage-paying job. The sustainable way to provide for working families is with stable employment like instead providing programs like work-sharing benefits which cover lost time from an employed worker.
This one-two punch of stifled private job growth and expanded government responsibilities is a forewarning of increased economic woes on Kansas businesses: more taxes to keep funding a growing government infrastructure, which in turn prompts business to leave the state, thus creating a never-ending snowball effect in which private enterprise is squished by the ever-growing state. Helping end Kansas’ decades-long economic stagnation begins with creating new economic opportunities instead of supporting ineffective programs.
