Kentucky offers cash to return to work
(The Center Square) – Kentucky Gov. Andy Beshear on Thursday announced a new $1,500 incentive to encourage up to 15,000 people on unemployment to get back into the workforce. However, the plan was panned by legislative Republicans and others who have been calling for the state to drop out of the federal Pandemic Unemployment Assistance program.
The Democratic governor said the state would use up to $22.5 million in CARES Act funding for the initiative. Those who qualify are Kentucky adult residents who have an active unemployment claim as of Wednesday and start a new full-time job by July 30. Those individuals also must work 120 hours during their first four weeks on the job.
Qualified individuals will then need to apply for the funding. The state will accept applications between Aug.1 to Oct.1.
Beshear, who hinted at the plan during a press conference last week, said the program is modeled after similar programs in states like Colorado and Maine.
It comes after business groups and GOP state lawmakers kept calling for the state to end its participation in the $300 per week unemployment subsidy program, with critics saying the extra money provided a disincentive for recipients to seek work.
The state estimates about 60,000 residents receive the extra funding. The federal subsidy is set to end in September.
While Beshear has taken some steps, such as reinstating the job-search requirement, he has held off on ending the subsidy. He’s said it pumps millions into the state’s economy and helps individuals who could not yet re-enter the workforce for several reasons – like childcare issues.
“All along I’ve said we’re not going to make our decisions red or blue, Democrat or Republican but based on sound economic principles,” the governor told reporters Thursday. “That we were going to try to thread a needle in a way to where we could get those that aren’t facing other obstacles off of the PUA benefit.”
The program would be managed by the state’s Public Protection Cabinet. Beshear said that would allow workers in the Labor Cabinet to continue processing unemployment claims.
The governor’s announcement drew a mixed response.
“We applaud the Governor’s action taken today to incentivize employees to return to work,” said Spencer A. Coates, president of Houchens Industries, a Bowling Green-based business that owns 23 companies and operates stores for nine franchises.
In a statement, Kentucky Chamber of Commerce President and CEO Ashli Watts pointed out the state’s workforce dropped by 112,000 during the COVID-19 pandemic.
She said she’s hopeful the incentive program works, but it can’t be the only step.
“Employers are desperate, and the long-term consequences of not addressing this problem will be severe… Return-to-work incentives could be a part of this, as well as phasing out the $300 federal unemployment insurance benefit and increasing access to affordable, high-quality child care,” she said.
House Speaker David Osborne, R-Prospect, slammed the incentive, wondering why people would choose to take a job while the extra unemployment money remained available.
“This is a classic government solution to a real world problem and problematic at many levels,” the speaker said. “The fact there are more than 100,000 available jobs, many of which already offer starting bonuses, should serve as plenty of incentive without a one-time payment.”
Jim Waters, president and CEO of the Bluegrass Institute for Public Policy Solutions, told The Center Square that getting people back to work would do more for the economy than the $300 subsidy. BIPPS is a nonprofit, nonpartisan free-market think tank.
He also said the $1,500 bonus sent an “inconsistent” message.
“So, we’re going to tell all the people who have been doing the right thing, who have gone back to work, who have been working through many of the difficulties presented by the pandemic… that we’re going to reward the people who stayed home and did the wrong things,” Waters said.
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