Kentucky Gov. Andy Beshear signaled Thursday that he plans to offer incentives to fill more jobs, as he defended enhanced jobless benefits that Republican lawmakers and businesses blame for causing labor shortages.
The Democratic governor wants more Kentuckians back to work as the economy rebounds from the COVID-19 pandemic, but said the right course is to offer "the carrot, not the stick.”
Republican leaders and businesses have pressed Beshear to set a date to end the $300 in extra weekly federal unemployment payments. Critics say the supplemental benefit discourages many people from returning to work.
Beshear said those supplemental benefits inject $34 million each week into Kentucky's economy, with pandemic-battered retailers, grocery stores and restaurants among the beneficiaries. Those businesses would be hardest hit by a “premature end" to those benefits, he said.
The governor said his administration is working on a plan to offer incentives to get more people back to work, saying he hopes to have an announcement next week. He didn't offer details but said he hopes the program could be launched soon after the announcement.
Beshear said he’s trying to “thread the needle” to boost employment while protecting benefits for people unable to return to work right away. The reasons for people not returning to work are complicated, and can include a lack of available child care or virus-related concerns about returning to jobs that require interaction with the public, he said.
“It’s trying to devise the way that we get a large portion that can return to work, to return to work, while keeping that necessary safety net for those that need just a little bit more time,” he said.
The federal enhancement — coming on top of state jobless benefits — is set to expire in September. Beshear acknowledged some people haven't returned to work due to the level of jobless benefits.
He didn’t rule out ending the extra benefits early, saying “the possibility is still open.” But first, the governor said he wants to work with business leaders on the back-to-work incentive plan.
“Let’s create a smart incentive program," he said. "Let’s get you the workers you need. I want to get Kentuckians back to work.”
Kentucky Chamber of Commerce President and CEO Ashli Watts said the business sector is eager to hear details of the plan and how it can help.
“This is a dire problem and we need strong solutions,” she said in a statement.
The business community sees a phaseout of the extra jobless benefit as “one step” to resolve the problem, Watts said.
"Until our workforce participation increases, we will not truly be able to recover economically from the pandemic,“ she said.
The governor has faced increasing pressure from prominent Republicans and business interests to halt Kentucky’s participation in the extra payments.
During a recent stop in Kentucky, Senate Minority Leader Mitch McConnell said he has been hearing ongoing complaints from Kentucky business operators struggling to lure back workers. Employers link their workplace shortages to the federal jobless bonus, the Kentucky Republican said.
“This issue is keeping them from getting people back to work,” McConnell said. “The coronavirus is behind us. We need to get back to work. We need to do things productively. And I do disagree with the governor’s position.”
Meanwhile, Beshear has touted the state's economic growth in emerging from the pandemic, saying Kentucky is poised for “unprecedented prosperity and opportunity.”
Since January, private-sector companies have announced 50 new location and expansion projects totaling more than $2 billion in investments and 4,000-plus full-time jobs for Kentuckians, he said.
Through May, the average incentivized hourly wage for projects announced this year in Kentucky was $23.15 before benefits, up 4.7% increase from last year’s average wage, the governor said.