Letter to the Governor from Kansas Chamber, NIFB, and SHRM calls for ending enhanced federal benefits to ease workforce shortage
Kansas Chamber press release states there are 57,000 current job vacancies; in October 2019 - before the pandemic there were 56,022 job vacancies.
April unemployment rate is 3.5 percent, very close to pre-pandemic levels
The Federal Reserve reports that Kansas labor force participation rate is currently higher than it was for all of 2019, before the pandemic began.
There are currently 21,800 people receiving enhanced benefits - if every one of them immediately entered the workforce, there would still be job vacancies.
The top jobs - those fields that employ the most Kansans - all pay lower entry and mean wages than the U.S. average.
There’s been more than $7.5 billion in federal relief directed to Kansas business and $2.08 billion in federal relief for individuals.
Kansas leaders only offer two tired and uncreative solutions for the workforce issue: big business tax cuts and cutting social programs to compel people to work, despite wages that won’t support families or our economy.
Skip this if you’ve been following the story…
ICYMI: The Kansas Chamber spearheaded, alongside the National Federation of Independent Business and the Society for Human Resource Management, a letter calling on Gov. Kelly to reject the $300 enhanced federal unemployment benefits, claiming it was damaging the ability of employers to fill job vacancies. Instead, they argued, there should be talk of using the money for hiring bonuses and help with childcare. I posted the letter - which I found on news websites - and offered some comments about wages and unemployment in Kansas. Shortly thereafter, I was called by a local organization which said it knew nothing of the letter and hadn’t been asked to sign on. Then another company. And another - most of the direct contacts came from my House District, or Hutchinson. So I posted an update that some companies didn’t know they were on the letter, questioned the veracity of the letter, and looked into it. News stations picked it up, and found additional companies that hadn’t signed on to the letter.
Now, the Kansas Chamber is saying that I “politicized” the letter, and that I behaved irresponsibly. I’m not going to dwell on this. The folks behind the letter seem to believe they did everything right. I have a different opinion. But I will defend myself.
The letter became political the moment the Kansas Chamber touched it. They are a political organization. Period. They influence Kansas elections and policy more than any other group.
Through news accounts and my conversations with people, it was clear that at least some people who signed on to the letter didn’t fully understand what it was. It also wasn’t clear that the Kansas Chamber was involved in drafting and promoting the letter.
When people in my district called upset that I had posted the letter with their company or firm on it - and they didn’t realize they had signed it or what it meant - I am duty-bound to both correct the record and defend my constituents. I helped spread that information; the clear and right thing for me to do was to raise questions and clear the matter in the same public fashion.
But let’s get on to the actual content and claim of the letter.
So what is going on in the workforce and labor market?
The Chamber’s press release states there are 57,000 job vacancies in the state, and its letter made the argument that the $300 per week federal enhancement was a barrier to employers finding employees. Various social media materials from partisans made the further claim that the governor was “holding the state back” by not rejecting the additional unemployment money.
Yet, according to the Kansas Department of Labor there are only about 21,800 people receiving the enhanced benefits - not nearly enough to fill those 57,000 jobs.
The Federal Reserve reports that labor force participation is currently at a higher level than it was in all of 2019 and much of 2020. That means there are more people working and looking for work than before the pandemic began.
In October 2019, the Wichita Business Journal reported there were 56,022 job vacancies in the state - at the time a record in the 15 years of tracking.
If you look at KDOL’s reporting on county-by-county continued unemployment claim data, it is clear there’s not huge numbers of would-be workers sitting around collecting unemployment. Some? Sure. That happens. But the numbers don’t support the idea that there are giant pockets of potential employees gathering lucrative unemployment benefits.
And the April unemployment rate is 3.5 percent - only .3 percent higher than it was in March of 2020, before Kansas was in full pandemic mode.
The data is clear that whatever workforce issues Kansas currently faces doesn’t have its origin in a post-pandemic world or because there are too many people making too much money from the extra $300 a week the feds are providing. It’s also clear that ending the enhanced benefit would barely make a dent in filling those job vacancies. What we’re facing right now in our labor market is a return to what existed well before the pandemic began - back when we were seeing ample reporting that Kansas was struggling to find enough people to fill the available jobs in the state.
What’s the real problem?
I’d argue that it’s two-fold. One, people are treated as disposable tools to create executive and shareholder wealth - and once you no longer serve that purpose your family’s life will be upended so someone very far away can cash in and upgrade his yacht. The days of working at a good company for 40 or 50 years are largely gone. Now, a company gets bought and sold at the whim of shareholders - and once they’ve made their money, the company might be shuttered or sold - with no consideration of the effect on a family or a community.
Equally important - and the issue I want to dive into here - is chronic low wages in Kansas.
According to the wage survey report from KDOL and the Bureau of Labor Statistics, the top occupations in Kansas (by number of people employed) and the entry and mean wages, compared to U.S mean wages, are below:
In every one of the fields that employ the most Kansans, the wages fall significantly below the U.S. mean. Meanwhile, according to a project at MIT, the living wage in Kansas for two working adults with two children is $19.48 per hour.
Mix low wages with workplace policy decisions - like persistently weakening workers’ injury compensation protection - and regressive social policies, such as not expanding Medicaid or legalizing marijuana, and attacking public education, minorities, women, and LGBTQ - it is no wonder Kansas suffers from horrific outmigration and a workforce shortage. In a state that has very little public land, relatively few trails, and doesn’t often see the value in investing in quality-of-life - we can’t afford to actively create more reasons for young people to leave the state. Yet we do almost every single legislative session.
We talk a lot about Kansas being a business friendly state - and that’s often used as justification for the next round of big business tax cuts. But we seldom talk about why our workforce leaves the state. There’s some study about it, a lot of hand-wringing, but we aren’t having the hard conversations about why the young people we invest in and educate leave for greener pastures as soon as they can. And we’re certainly not turning the tide.
Speaking of who’s getting “free” money...
Not only do the state’s biggest players promote anti-worker policy, they are overtly hostile to the working poor and those in poverty. That letter contained an undertone of gross classism - and almost every conversation about the workforce issue focuses on how poor folks should just act more like upper middle class or rich folks. They are tired, the line goes, of handing out free money to people who simply refuse to help themselves by making “better” choices.
In some future post I’ll dive into the psychological trauma of poverty, but here I want to explore if we’re actually upset with the right people.
Kansas businesses have collected more than $7.3 billion in PPP loans throughout the pandemic - money we learned this year won’t be counted as business income, yet businesses will be allowed to deduct expenses from that “free” money to reduce their tax liability for years to come. Additionally there were a number of other pots of money that raised the total federal funds for business to $7.549 billion dollars.
In contrast, federal money used to enhance unemployment benefits: $1.844 billion. Combine that with other pots of money for individuals - things like rent and utility assistance - and the total that went to Kansas individuals is $2.08 billion. Even if you add in Kansas’ regular unemployment benefits to that number, we’ve collectively spent $3.2 billion on individuals, versus $7.5 billion on business.
Interestingly, 89 companies that signed onto the original letter asking to end the $300 per week unemployment enhancement collectively received $120.4 million in PPP funds. Equally intriguing is CEO and executive pay packages for about 16 of the non-profit companies on the letter, some of whom took significant amounts PPP money, including the Kansas Chamber of Commerce which took roughly $240,000 in “free” government handouts.
I don’t fault anyone that took a PPP loan - even those who signed on to the letter or led the charge to strip away the enhanced benefit. I encouraged businesses in my community to take this money. And in full disclosure my tiny little contract writing company took small PPP loans because I lost a contract in the past year and saw a substantial loss of income.
And ultimately, PPP money indirectly supported families by retaining employees during the pandemic. Which is good and by design. But let’s not pretend the economy is a one lane street from business to individuals - money in people’s hands flows back into business in a virtuous cycle that stimulates the economy.
Yet industry taking government money - to the tune of more than double what we sent to families - and then arguing that we’re too generous to working people and the poor is an exceptional level of irony.
The truth is that money was out there, and business saw taking it as a prudent business decision. And it was. But when it comes to working stiffs, or the poor, the script completely flips - and the conversation turns to how this money is undermining employment and we must take it away and compel people to take these jobs, regardless of pay or fulfillment for their families. To me the question is why what is clearly prudent for business somehow isn’t prudent for people?
What’s the matter with Kansas?
For the past 30 or 40 years, Kansas has been oriented almost exclusively toward the big business community. The legislature is composed largely of Republicans, and has been for the entire state’s history. In recent years the Moderate Republicans have largely been pushed out - leaving a bigger divide between Democrats and Republicans - and that divide has grown as our primary election system tends to elect people who are “real” Republicans or “real” Democrats. The moderating influence of the Democrats and Republicans in the middle of the political spectrum is nearly gone.
It’s worth noting that a not-in-small-part cause of this has been the big money in politics, much of it funneled through the triumvirate of the Kansas Chamber, Americans for Prosperity, and the Kansas Policy Institute. If these groups align and set their sites on you, it’s unlikely you’ll win re-election - especially in a Republican primary.
That has created several dynamics - including a lack in diversity of thought, and a failure to creatively examine real solutions to real problems.
Take Medicaid Expansion for example. There has been solid opposition to this from conservatives for years - because in their view it’s an entitlement program, and the discussion is based in political ideology. As such, there’s no will to consider that providing healthcare to low income workers could be a business development tool that aids start-up and mom-and-pop businesses, and supports the workforce.
One of the biggest workforce issues today is childcare - something the letter did acknowledge. I know people who have dropped out of the workforce because their effective income after paying for childcare is too low to be worthwhile. And we haven’t even touched the “Cliff Effect” that occurs as people begin to work their way out of poverty, only to realize their actual income drops when social supports are removed as wages increase.
There will always be low wage jobs. We can’t escape that. We can raise the minimum wage to any level, and there will still be a bottom level income. The point isn’t to create level parity in pay structures - though there's a clear need for adjustment. The point is to create an environment in which a family can live decently and humanely in spite of low wages and regardless of the work they do. Addressing issues like healthcare and child care alleviates upward pressure on wages, encourages active participation in the workforce, puts more money into our local economies, and helps small businesses recruit and retain the best talent, even if they can’t afford group insurance for their employees.
It can also restore for those families some hope that they can one day realize the American Dream - which I believe many working families have come to see as no longer within their grasp.
We seldom explore this side of the conversation in Kansas because there’s very little interest in doing so - both for political and financial reasons. Large employers enjoy a competitive advantage in attracting workers because they can afford better benefits; conservative politicians can say they support business and stand against an “entitlement” and, thus, win the support of big industry. The more success they find in elections, the more they drown out any other point of view in the conversation, and the more group-think dominates policy.
We do have a workforce issue in Kansas - and it’s a sustained problem that has plagued the state for years. While I can concede the federal benefits may create a temporary and minor stressor to that long standing problem, it is not the root cause - and taking that money away won’t solve the problem or help our state economy.
Our demonstrably low wages, our anti-worker orientation, our contempt for those in poverty, our lack of public amenities, our regressive social policy decisions, and our state level business tax-cut addiction that has led to local-level individual tax increases (particularly property and sales taxes in rural areas) have created the workforce issue and worsened it over time. Each of the decisions we make in any of those areas gives someone else a reason to build their life anywhere but Kansas.
Addressing any issue in our workforce requires a desire to consider multiple points of view, to consider that what we’ve been doing hasn’t solved the problem, and with an open mind oriented toward new ideas. We’ll never get that from a singular perspective that is heavily tilted in favor of big business and the disproven-in-real-life narrative of trickle-down economics.
Regular Kansans will need to stop fighting each other, and stop pointing the finger at one another with accusations that one or the other has it too good. The truth is a lot of Kansans don’t have it as good as we could, and we need to recognize who’s really responsible for that.
At the core, it’s not an overly difficult issue: Work has to work for those who are working. If it doesn’t, people are going to find another way besides allowing time and value to be extracted from their lives for wages that still leave them struggling to get by.