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In-depth: What's driving unemployment in the Kansas City area

Virus Outbreak Unemployment Benefits
Posted at 12:43 PM, May 14, 2021
and last updated 2021-05-14 13:43:22-04

KANSAS CITY, Mo. — The U.S. economy is rebounding from the pandemic-fueled recession, but the reality is there are still more than 8 million fewer jobs than there were before COVID-19 gripped the nation.

Meanwhile, the Kansas City area has recovered more than three-fourths of the jobs lost in early 2020, according to the Bureau of Labor Statistics.

KC Employment
Graph courtesy of the Mid-America Regional Council

"We're doing a little bit better than the rest of the U.S., but there's still a ways to go," Frank Lenk, director of Research Services for the Mid-America Regional Council, said.

The unemployment rate for the Kansas City region sits at 4.5%, which is lower than the national average but still higher than it was before the pandemic.

The stories behind the statistics suggest a multitude of factors at play.

First, there's the fact that the metro is still down about 30,000 jobs as a result of the recession.

In addition, the jobs that are available don't always meet the needs of workers.

"It's not that there's a labor shortage; there's a job shortage," Cynthia Shively, an area mom who is currently unemployed, said. "And there's not just a job shortage, but the jobs aren't paying what people need."

For many parents, wages in the jobs that are available aren't high enough to cover the cost of child care.

"I'm a single mother, and it's hard for me to go back to work," Silvia Graham, who received unemployment benefits, said.

KC Job Postings
Graph courtesy Mid-America Regional Council

Compared to January 2020, job postings are up 32% in the Kansas City area, including a 59% in job postings for leisure and hospitality positions.

However, experts say one of the signs of a true labor shortage is an unusual increase in wage growth, which has not occurred up until this point.

Federal unemployment benefits have become a political talking point and scapegoat for people not returning to work.

That's one reason why Missouri Gov. Mike Parson said he will end the state's participation in a federal program, which allows people to collect $300 in addition to normal state unemployment.

Opponents of the additional benefits argue workers make more on unemployment than they do at work, but Yale University researchers found "no evidence that more generous benefits disincentivized work" under the original CARES Act, which included a $600 weekly benefit.

Still, Lenk acknowledged the benefits could be one factor slowing people's return to work, but suggested that indicates a larger problem.

"That's kind of an indictment of the low-wage job workforce and what it takes to make it in America," he said. "Most people will prefer to have that permanent, stable job, but a job that has some kind of future, that's got a career associated with it, that pays the bills."