ST. LOUIS — Tens of thousands of unemployed Missourians will see their benefits slashed or completely shut off starting this weekend.
Gov. Mike Parson’s announcement a month ago that Missouri would stop participating in federally funded unemployment programs June 12 mirrors similar actions by Republican governors in 24 other states. They argue generous jobless benefits have kept potential workers on the sidelines and hurt businesses.
Jimmy John’s franchisee Jana Franklin said she’s already seeing more applicants for jobs to supplement a staff stretched thin.
“The fact that Missouri rolled back the unemployment definitely made a difference,” she said. “We are starting to see applicants — slowly, but surely. We’ve had several applicants come in and say I can start on the 13th.”
In the Metro East, where she also owns franchises and unemployment benefits haven’t been reduced, there’s been no similar return of job applicants. “It’s a very stark comparison,” she said.
The unemployment programs ending this weekend in Missouri are entirely federally funded and were put in place to get relief to self-employed workers, those who have exhausted regular benefits and those with mixed income sources. They also add an extra $300 weekly federal supplement to all unemployment programs. They were set to last until Sept. 6 under the latest stimulus bill President Joe Biden signed in March.
“It’s unfortunate Missouri is going in this direction,” said Steve Fazzari, an economist at Washington University. “The unemployment supplement has been helpful to people, particularly people at the lower part of the income distribution who were hit disproportionately with job losses in the pandemic.”
A tight labor market may not be good for employers, he said, because it often forces them to pay more. But that’s good for workers. Franklin, for instance, said she raised wages by $2 an hour in April to keep the workers she still had and attract new ones.
“It’s giving them a little bit more flexibility and a little more bargaining power,” Fazzari said of the $300 supplement. “We’re actually seeing some wages rising in the lower part of the income distribution.”
Among those losing benefits entirely are those on the federal program for gig workers and the self-employed, which counted about 37,000 Missouri beneficiaries as of May 22, according to U.S. Department of Labor figures released Thursday.
Additionally, another federal program that extends unemployment payments beyond 20 weeks will also end. It had about 50,000 people on its rolls in Missouri as of May 22.
And some 55,000 Missourians were on regular unemployment as of the end of May will lose the federal $300 supplement.
The programs’ end will also hit people waiting for certain industries to fully reopen.
‘Doesn’t solve the problem’
Andy Tichenor, who plays trumpet for the Muny, Fox Theatre and sometimes the St. Louis Symphony, estimates he’ll lose about half of his weekly benefit starting next week when the federal supplement goes away.
“Which is ridiculous,” he said. “It doesn’t solve the problem. People are still trying to find work. It feels like it makes it an emergency for everybody.”
Fortunately, the Muny will have a condensed season this summer, which will get Tichenor back into a paying gig. But that doesn’t start until the end of July.
He already spent months this year fighting with Missouri when the state unexpectedly shut off his benefits and said he owed $9,000 in overpayments from last year, forcing him to turn to friends and family to pay the bills. He thought maybe it was because he lives in Illinois, but all of his income comes from venues on the Missouri side of the St. Louis region.
With help from a lawyer through the Volunteer Lawyers and Accountants for the Arts, he appealed and the state eventually admitted he was eligible. But the state still withholds about half of his benefits to recoup what it contends was an overpayment of benefits. With the end of the federal payment, he’ll only receive about $150 a week until the Muny season starts.
“They never were able to explain why I got shut off,” Tichenor said. “I swear it’s all purposely designed to discourage people.”
Missouri, unlike many other states, chose to force repayment of federal unemployment benefits issued in error to an estimated 46,000 people despite provisions in federal law allowing the state to waive the overpayments.
It’s unclear when the Missouri Department of Labor will again ramp up its collection efforts for unemployment overpayments. The Labor Department’s director, Anna Hui, has been adamant that anyone paid in error during the crisis should be forced to repay, testifying to the Legislature that “if they are not eligible, it is not their money.”
Hui and Parson’s decision to pursue collection prompted a backlash from a bipartisan coalition of state lawmakers and a led to promise from Hui to pause collections while legislators passed legislation waiving the repayments. But legislators adjourned last month without resolving the issue.
Labor spokeswoman Maura Browning said Thursday that collections were still paused and there was no information on when the department may restart collections, which can lead to garnished wages and property liens.
Jim Guest, an attorney at Legal Services of Eastern Missouri who helps low-income people appeal state unemployment collections, said they anticipate seeing a lot more people asking for help with appeals.
“This notion that people were trying to steal from the government is not accurate,” Guest said. “These are people who got benefits they thought they were entitled to.”