Mississippi to nix extra $300 unemployment payment in hopes to spur back workers

Published 4:36 pm Monday, May 10, 2021

Gov. Tate Reeves said Mississippi in early June will opt out of a federal pandemic program that has been providing an extra $300 a month in unemployment benefits to Mississippians since last year.

Reeves’ announcement came just hours after fellow Republican, House Speaker Philip Gunn, called on Reeves to either start enforcing job-search requirements for unemployment benefits or end the federal stipend. Gunn said small businesses are reporting they cannot hire people because of the extra benefits, and that the state is not enforcing the rule that people search for work while receiving them.

“The purpose of unemployment benefits is to temporarily assist Mississippians who are unemployed through no fault of their own,” Reeves posted on social media on Monday. “After many conversations over the last several weeks with Mississippi small business owners and their employees, it has become clear that the Pandemic Unemployment Assistance and other like programs passed by the Congress may have been necessary in May of last year but are no longer so in May of this year. Therefore, I have informed the Department of Employment Security to direct the Biden Administration that Mississippi will be opting out of the additional federal unemployment benefits as early as federal law allows – June 12, 2021.”

Gunn said he’s heard reports that unemployment claimants are not following requirements that they earnestly search for jobs, and that “MDES is not effectively enforcing that requirement.”

Gunn in his letter Monday said he received a report from one small-business owner that over a short time, 18 people had applied for job interviews, but only three showed up. He said the owner believed they were trying to game the system with MDES and “he reported these individuals to MDES to no avail.”

“I and other House members are continually being contacted by increasingly desperate small businesspeople who inform us their businesses are at risk,” Gunn wrote to Reeves, and copied the letter to all House members. “They report that they cannot get employees to return to work because they can earn more from combined federal and state unemployment benefits than their normal wages.”

Gunn noted that the governors of Montana and South Carolina last week announced they were ending their states’ participation in the $300 a week federal COVID-19 benefits. Politicos and pundits nationwide have surmised increased pandemic unemployment benefits and stimulus payments have incentivized many people to not return to work.

Reeves on Monday said, “I have also directed MDES to prioritize pre-pandemic enforcement of all eligibility requirements for any individual to receive unemployment benefits under state law. Mississippi is open for business!”

Last August, Reeves announced the state would participate in a federal COVID-19 unemployment stipend created by an order of the Trump administration that would provide unemployed Mississippians an extra $300 a week. In Mississippi, state benefits are a maximum $235 a week, with the average payment at less than $200, compared to the national average of $308 a week.

House Ways and Means Chairman Trey Lamar, R-Senatobia, said he has heard from numerous employers in his district that they can’t find workers because of increased pandemic benefits.

“Not just one or two (employers),” Lamar said, “but a substantial number of businesses just here in my little hometown of Senatobia — restaurants, other businesses. The place where I used to get coffee in the mornings can’t open in the mornings because they don’t have enough workers … I think it’s past the point for this. People can safely go back to work.”

But Mississippi has suffered from low wages, lack of jobs, high unemployment and low workforce participation long before the pandemic.

House Democratic Leader Rep. Robert Johnson of Natchez said, “let’s raise the minimum wage first,” before ending the pandemic unemployment stipend.

Johnson said “people have been working in poverty” because of the state’s $7.25 an hour minimum wage and should not be blamed for taking advantage of an opportunity to earn more thanks to the $300 per week federal benefits stipend. Plus, he said, cutting the benefits off without taking other steps could harm people who are legitimately unemployed.

He said many states have increased their minimum wage to as much as $15 per hour. If it was increased to $9 or $10 an hour in Mississippi, Johnson said it would help low wage workers and boost the economy.

Rep. Chris Bell, D-Jackson, said, “It’s very unfortunate to hear about ending the unemployment benefits for Mississippians who are currently out of work.”

“I don’t know of a single person who would rather receive these benefits than find meaningful employment,” Bell said. “The extension of unemployment benefits should not expire.”

Mississippi’s unemployment for March was 6.3%, higher than the national average of 6% and up from 6.1% in February. Overall, Mississippi’s number of jobs remains down by 3% from last year.

Mississippi for March ranked last, at 56.1%, in workforce participation — a trend that predates the pandemic — and it ranks last in median household income at $45,081, also a trend predating COVID-19.

Mississippi’s state economist recently reported that the state is forecast to see a major economic rebound in 2021, including job growth of 1.8%, the highest annual increase since 1998. He noted that much of that growth would be due to federal COVID-19 stimulus spending.

By Geoff Pender and Bobby Harrison, Mississippi Today