MURRAY – The local economy continues to adjust to pandemic life as the $300 a week federal unemployment insurance supplement recently ended, but even with that program behind us, it is unclear how long employers might have trouble filling positions.
According to the Kentucky Career Center website, the Federal Pandemic Unemployment Compensation (FPUC), which provided an additional $300 weekly payment to recipients of unemployment compensation, expired in Kentucky on Sept. 4. Several other American Rescue Plan and Federal Pandemic Unemployment Insurance Programs expired as well, including Pandemic Unemployment Assistance (PUA), which provided benefits for those who would not usually qualify, including the self-employed, gig workers, and part-time workers; Pandemic Emergency Unemployment Compensation (PEUC), which provided an extension of benefits once regular benefits have been exhausted; and Mixed Earner Unemployment Compensation (MEUC), which provided an additional $100 benefit to certain people with mixed earnings. The last payable week for these programs was the week ending Sept. 4, regardless of the balance of the benefits remaining in the claim.
The KCC site said that if claimants are waiting to receive an eligibility determination for any of these four federal programs, OUI will ensure that they receive payments owed to them for all weeks before Sept. 6 for which they are determined eligible. It also made note of Gov. Andy Beshear’s Back to Work Incentive program, which was announced in June and incentivizes the long-term unemployed to return to the workforce with a potential $1,500 bonus payment.
The Kentucky Education and Workforce Development Cabinet (KEWDC) released August unemployment statistics on Thursday. A news release said unemployment rates fell in all 120 Kentucky counties between August 2020 and August 2021. No county unemployment rates rose or stayed the same, according to the Kentucky Center for Statistics (KYSTATS), which is an agency of the KEWDC.
Calloway County’s unemployment rate for the month of August was 3.9%. The KEWDC lists Calloway’s civilian labor force at 16,381, with 15,747 employed and 634 unemployed. The county’s unemployment rate was 4.8% in July of this year and was 4.9% in August of last year.
“Kentucky’s county unemployment rates and employment levels are not seasonally adjusted because of small sample sizes,” the release said. “Employment statistics undergo sharp fluctuations due to seasonal events such as weather changes, harvests, holidays and school openings and closings. Seasonal adjustments eliminate these influences and make it easier to observe statistical trends. The comparable, unadjusted unemployment rate for the state was 3.7% for August 2021, and 5.3% for the nation.”
The release said Kentucky’s seasonally adjusted August 2021 unemployment rate was released on Sept. 16 and can be viewed at https://kentucky.gov/Pages/Activity-stream.aspx?n=EducationCabinet&prId=520.
“Unemployment statistics are based on estimates and are compiled to measure trends rather than actually to count people working,” the release said. “Civilian labor force statistics include non-military workers and unemployed Kentuckians who are actively seeking work. They do not include unemployed Kentuckians who have not looked for employment within the past four weeks. The data should only be compared to the same month in previous years.”
Murray-Calloway County Chamber of Commerce President/CEO Michelle Bundren said that like almost every other county in the U.S., local businesses continue to have trouble finding enough workers. Supply chain shortages caused partly by production disruptions during the pandemic also continue to be a persistent problem, she noted.
“The top issue I’m hearing from chamber members when they reach out is the inability to hire people or people leaving and not being able to keep someone hired, and then obviously, the supply chain,” Bundren said. “Those two are really big issues for our businesses, and I was actually listening to the U.S. Chamber this week, and they said that 8.7 million people are currently unemployed in the country, and there are 11 million job openings. So, everybody’s experiencing (problems hiring employees). We’re not unique in that, but it is definitely an issue. We’re seeing reduced hours and businesses having to close just because they can’t perform 100% in their business. They don’t have the staff.”
Bundren said she and area employers are waiting to see how the end of the federal unemployment supplement in Kentucky will affect the labor market, but it is currently too early to tell. Unfortunately, she said, there are other pandemic-related problems that continue to linger.
“The UI benefits were definitely generous for those who were on unemployment, so if that was appealing to some (as a reason) to not work, that definitely is gone now,” Bundren said. “So we will see how that turns out. The virus is still very much a huge issue with childcare. A lot of people are quarantining, so that keeps people out of the workforce too. Your children quarantine and therefore you have to quarantine, so definitely it is still impacting the workforce. I’m interested, too, to see how the end of those benefits affect the labor market in Calloway and across the country.”
Chris Wooldridge, director of the Center for Economic and Entrepreneurial Development in Murray State University’s Arthur J. Bauernfeind College of Business, said that as he has worked with businesses of all sizes and other organizations in the last year-and-a-half, he has noticed quite a few trends related to the pandemic that have had major impacts on the labor market. He said COVID-19 accelerated a lot of changes that were already happening before the pandemic. For those who were able to work from home online, the way they worked changed, but many of those in the service industry who didn’t have that option lost their jobs, he said.
“The closures accelerated some changes that were slowly in place that basically (sped up),” Wooldridge said. “A lot of that is going to technology. Where entrepreneurs or businesses might have been hesitant to bring in a new, updated piece of machinery or move to new equipment or new technology from an artificial intelligence standpoint or whatever it might be, they’re closed or they’re greatly reducing operations, so downtime provided them the opportunity to do those upgrades. And, of course, with those upgrades come a higher level of skill set and education necessary to run those. So you’re looking for a different type of employee when you’re bringing in different types of technology.”
Related to that, Wooldridge said there were a lot of workers who moved on after their previous jobs were terminated. Since they had to find new ways to generate income, many who had never worked from home before figured out how they could do that while working in a new capacity, he said. Others decided to further their education or job training after being terminated since they didn’t know if or when they would be able to return to their old jobs.
“They’ve moved on to other jobs and took this time to educate themselves and change up their career paths, so they’re not coming back to those jobs that got turned back on when the businesses turned back on with the economy,” Wooldridge said. “So a lot of those folks moved to a different industry and different sector and won’t be coming back to the sector they left. So those positions, at least, are going to go unfilled by the ones that were there prior to the closures and to the termination.”
In addition to that, Wooldridge said there is still a lot of “COVID reluctance.” Many people still feel uncomfortable working in a close working environment, so some of them have continued living off their savings or might have moved in with other family members to be able to manage not working for now, he said. With childcare continuing to be an issue, Wooldridge said there are many who have been at home with their children for more than a year now and have figured out how to make that work with their lifestyle, so they won’t be coming back into the labor force any time soon.
Wooldridge also said many people who were close to retirement age when the pandemic hit decided to take early retirement rather than wait out the virus. Others have also been taking care of elderly parents who got sick from COVID-19 and never fully recovered, he said.
“Then there is one (factor) that, going forward, is probably going to be the biggest longterm (impact), which is really an economics issue – and that is that people want higher wages,” Wooldridge said. “Economists, I think in general, would say there’s really not a labor shortage as much as there is a wage shortage. People are unwilling to work at the wages they’re offered in this scenario that we have now, and so they want higher wages and they’re not going to go to work if they don’t get those higher wages.
“I’ve heard that quite a bit, and in fact, I heard that (this week) in a meeting I was in with some businesses. If they’re going to work in a COVID environment, in a higher-pressure (situation) or if they’re going to have to come back and do two people’s jobs … wages are going to have to go up. We’re seeing that in wage increases to get folks to come back to work, and that’s driving some of the inflationary rises that we’ve seen.”
Kentucky Labor Cabinet Secretary Jamie Link spoke during a recent meeting of the West Kentucky Workforce Board, which was held virtually and posted on the organization’s Facebook page. He said that whether one calls it a labor shortage or something else, there is certainly high demand for employees at the moment. He said the Labor Cabinet is closely watching the situation and assessing what it can do to assist with that problem. He said the cabinet is working with the Public Protection Cabinet on implementing Beshear’s back-to-work incentive program, and he mentioned that the applications to receive benefits from that program are due by Oct. 1.
“We’re hoping that will help to address that labor demand,” Link said. “I think we all recognize as well that there are higher market wages right now because of the simple supply and demand rules of the economy. As employers are seeking more and more employees, market wages have increased, but we’re still not seeing a great uptick or a great response to that demand.”
Link said the Labor Cabinet is exploring why there has not been a greater response to the demand for workers, and one of the things the cabinet has been addressing with the U.S. Department of Labor is that more must be done to make Kentucky Career Center services better known to people who are currently looking for jobs. He said it is his understanding that federal rules do not allow states to use federal funds to advertise career services, so Labor Cabinet employees are trying to do as much as they can to engage in personal outreach in the communities they serve.
Addressing the way the state’s unemployment insurance system has been “overwhelmed” during the pandemic, he said the state has been working with an “antiquated” system that dates back to the late 1970s or early ’80s. He said the state plans to completely replace the system, and a request for proposal (RFP) has gone out. He said the cabinet is hoping to identify a vendor in late October, but even after that, it will take months to put together such a huge system. In the meantime, he said the state is trying to improve the system in place and implement new technology to address fraud protection and prevention.
In the same meeting, Cissy Fox with the Purchase Area Development District, said that 66.6% of the jobs lost during the pandemic have been recovered. In July, the U.S. unemployment rate was 5.7%, while Kentucky’s was 4.7%, she said.
According to the unemployment numbers released Thursday, Kentucky’s current statewide unemployment rate is 3.7%, which was down from 4.7% in July and 5.2% in August 2020.
The unemployment rate for the eight counties in the Jackson Purchase was 3.9% in August, down from 4.8% in July and 5% in August 2020.
Mary Anne Medlock, the Purchase Region business services liaison for West Kentucky Workforce Board, said information compiled by KYSTATS shows how Calloway County fared during the pandemic and how the recovery is going so far. She said around 7,000 people filed unemployment claims in the first few weeks of the pandemic. However, because of the gradual winding down of operations at Briggs & Stratton, the unemployment numbers from that time are reflective of a lot more than just the effects of COVID-19, she said.
“It demonstrates the fact that the pandemic in the first month to six weeks took most of the jobs,” Medlock said. “Nobody questions that at all. But it was also wrapped up with Briggs & Stratton because we still had people employed there. While many came out in January (2020), we still had people there in March and June (2020), and then it got down to very few people after June. And then I think the last one walked out in December of last year.
“When you think about the fact that 7,000 people filed an unemployment claim, that sounds really scary, especially in a county where there’s around 40,000 people. But considering the sectors that we have with strong retail and restaurant (presence), I’m not really surprised. And again, those claims also include dentists’ offices that had to close for a while and any public service. They all had to close for a while.”
Medlock said that set of data doesn’t show the number of people that went back to work and when their filed claims ended.
“Until restaurants started serving curbside, we had a lot of people who lost their positions for a while,” she said. “Then restaurants adapted and retail adapted and we moved forward. And that’s what we’re currently in – we’re all currently learning how to live and work within a pandemic.”