Workforce expert weighs in on impact of ending federal unemployment benefits

Frank Lenk
Posted at 6:03 PM, Jun 09, 2021
and last updated 2021-06-09 19:04:11-04

KANSAS CITY, Mo.  — Missourians are preparing to lose additional unemployment benefits as part of federal programs next week.

The programs, such as the additional weekly $300, are slated to end in September. Gov. Mike Parson announced in May the state will end the programs June 12 due to a workforce shortage.

Currently the unemployment rate in the Kansas City metro is around 4.5%.

Frank Lenk, director of research services for the Mid-America Regional Council, said the rate hasn't moved much in the last few months and is significantly lower than the nationwide rate of about 6%.

"We are at work-oriented town and that shows up in our unemployment rate," Lenk said.

Lenk predicts it will take about another year for the metro to get back to its pre-pandemic unemployment level.

"There’s a lot of slack in the labor force, there’s a lot of folks who are not working or are not even looking that used to be in the labor force," Lenk said.

Lenk said there are likely multiple contributing factors to why people are not going back to work, such as child care and hesitancy about safety.

In the meantime, the metro is adding jobs back much quicker than it's able to fill them.

"We estimate that in the hospitality sector, about 87% of the jobs lost have been gained, so they're still 13% below where they were going into the pandemic but, that’s a huge recovery," Lenk said.

Lenk said it will take time for the labor force to bounce back.

"You can’t just turn the labor force back on on a dime, it’s not like the financial markets, the labor market doesn’t turn around quickly," Lenk said.

Lenk said pay is likely another factor in why people may not be going back to work. The biggest growth in jobs are in the entertainment and hospitality sectors, which Lenk said are often low-pay jobs.

"Offered a full-time job at decent pay, most people would jump at it if they are out of work, no one wants to be in an unstable or temporary employment situation," Lenk said.

Lenk said the extra $300 a week on unemployment has likely made a substantial difference in people's lives who need it. Without it, he anticipates more evictions and more dependence on other forms of state and federal aid.

"Some of that will result in people grabbing the first job they can and so you’ll see the employment numbers go up but people's welfare won’t necessarily go up, it may in fact go down as a result," Lenk said.

He said more effort is needed on getting the low-wage workforce into more life-sustaining wages.

"Having people with an income that can pay the bills, that their kids can get the health care they need is good for the economy in the long run," Lenk said.