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Column: Washington’s gravy train slowing Kentucky’s recovery

Jim Waters
Jim Waters(Jim Waters)
Published: Jun. 29, 2021 at 12:38 PM EDT
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The opportunity to continue collecting $300 weekly pandemic-assistance unemployment checks from Washington rather than return to work is proving too much of a temptation for many Kentucky workers to resist.

“Like so many government-assistance programs, cash payments are a one-size-fits-all approach that is now hindering what could be a remarkable economic recovery in the state,” said Michael Thornberry of Lexington’s Powell Valley Millwork.

Thornberry has written a letter signed by 48 member-companies of the Kentucky Forest Industries Association imploring Gov. Andy Beshear to end the federal handouts, which most neighboring states have already done.

These industries face enormous pressure because they can’t keep pace with demand for building materials – an indication the economy is poised to roar back but hindered by Beshear’s obstinate and politically driven welfare-rather-than-work approach.

Beshear twistedly reasons that keeping Washington’s gravy train trundling through Frankfort actually helps Kentucky’s economy.

He claims the dollars are going to industries “hit hardest during the pandemic,” like grocers and restaurants.

Really?

How is it economically sound to incentivize workers to stay home when they’re badly needed to revive those very industries Beshear claims unemployment pork nourishes?

His policies create an inability to fulfill the growing demand for products and services, driving up costs and stalling a recovery.

Tom Underwood with the Federation of Independent Business told the legislature’s Unemployment Insurance Reform Task Force a survey of his small-business affiliates found “90% of our members have open positions across the state; 100% of those are having difficulty finding applicants; 86% of them cannot find applicants even at wages … equal or greater to the benefits … being received now.”

How, do tell, does not being able to find a workforce and fill positions critical to businesses’ success bolster Kentucky’s economy?

Beshear’s obstinance isn’t just bad for business, though.

It’s downright ominous for agencies providing around-the-clock support for thousands of intellectually and developmentally disabled Kentuckians.

Amy Staed, executive director of the Kentucky Association of Private Providers, told the task force the situation has “reached the point where our providers cannot recruit enough staff to cover shifts.”

Since these providers get 100% of their operating revenues from Medicaid, which reimburses at only a $10 hourly rate, it’s unfeasible for them just to raise wages or offer additional incentives like sign-on bonuses to entice workers to give up their government check and return to demanding jobs.

“It’s impossible for the waiver providers to compete with the additional $300 benefit,” Staed told legislators.

Almost as twisted as Beshear’s preference for continuing to dole out unemployment checks versus requiring able-bodied adults to return to work is the fact that the restrictive reimbursement rates received by Staed’s providers are set by the same government undercutting their ability to hire caregivers to provide support for disadvantaged citizens.

“We’re competing with the government, and the government sets our rates – so we’re in a bit of a pickle right now,” she said.

Further souring that pickle is the state’s failure to enforce requirements that individuals genuinely seek employment to continue receiving jobless benefits.

Eddie Kraft, whose family has owned a floral company in Louisville since 1850, told task force members that only 20 of the 100 applicants for jobs over the past three months bothered to show up for interviews they all were offered.

“It confuses me and a lot of my friends who are looking for employees on why we’re still paying these federal benefits, when … even the unemployment office is looking for people” to fill positions, he said.

Staed’s testimony of the challenge members of her group face in getting applicants to respond to job offers further confirms the ruinous effects of Beshear’s position.

They “were told that the individual being interviewed would call them back when their unemployment insurance ran out,” she testified.

Which can’t happen soon enough for desperate Kentucky employers.

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at www.bipps.org. He can be reached at jwaters@freedomkentucky.com and @bipps on Twitter.