Update: Leslie Blair, spokesperson for the Oklahoma Department of Commerce, told The Frontier Tuesday evening that ending the federal unemployment payment “is not something we would do.”
“There is a very legitimate concern that people will not come back to work now because they are making more on unemployment than they can make at their job,” Blair said. “If they are offered their old job back, we really do need them to return so our economy can get started again.”
As the state begins to open up its economy next month, it could look to cancel the federal $600 per week unemployment stimulus payments to force Oklahomans back to work.
Those payments are part of Congress’ $2.2 trillion dollar CARES relief package that helps address the economic ravaging by the coronavirus pandemic. The $600 payments do not replace existing state benefits, but rather stack on top.
Discussion about asking the federal government to cancel those payments took place on Friday during the Governor’s Council for Workforce and Economic Development meeting. As those in the meeting, which took place electronically on Zoom, were discussing getting people back to work in May, Don Morris, the executive director of Workforce Development, mentioned the “disincentive effect” that the $600 federal unemployment stimulus may have.
Teresa Keller, the deputy director at the Oklahoma Employment Security Commission, said one option would be to ask the federal government to stop those payments to Oklahoma.
“We can request with 30 days notice that those be terminated for Oklahoma,” she said, noting that she “didn’t know” if that was a tact Oklahoma “would want to do.”
Unless otherwise stopped, the $600 weekly federal unemployment payments will continue until July 31, she said.
Others in the meeting had expressed concern that the combination of state and federal unemployment payments would lead to businesses re-opening next month without a workforce willing to return. Oklahoma, with a minimum wage of $7.25 an hour, has one of the lowest minimum wage rates in the nation, and some low-wage workers are reporting making more on unemployment than they did while employed.
Morris said the “disincentive” of unemployment payments might mean there would “actually be a challenge to get people back to work.”
Chad Mariska, the president and CEO of APS FireCo, had asked during the meeting if there was no way to reduce the federal unemployment numbers, could Oklahoma quickly reduce its unemployment benefits in order to spur people back to work.
“It would seem like the federal (unemployment payment) is fixed, but is there a way to move the fix so it doesn’t create a disincentive to work?” he asked. “It seems like we’re going to have a stick here pretty soon to say you must come back to work, but it would be nice to get rid of the carrot maybe as well.”
Keller replied that states were not allowed to reduce their unemployment benefit wage amount, but that the federal money could be halted. She also said that employers need to contact the OESC so unemployment payments can be pulled from someone who doesn’t want to work because they’re making more on unemployment.
“If there’s a claimant who says ‘You know, I can make more at home drawing this extra $600 and some other benefits,’ then if the employer will contact us, that is considered a refusal of suitable work and we will cut off their benefits,” Keller said.
“I know that’s been a concern. When I first saw (how much unemployed Oklahomans were making) I thought jeez, some of these claimants will be making more money on unemployment than they did while they were working,” Keller said. “So if you hear from any employers that ‘Gee, I can’t get these people to come back to work,’ then they need to let us know.”
“That’s the best news I’ve heard all day,” replied Sean Kouplen, Oklahoma’s Secretary of Commerce and Workforce Development. “That has been super concerning to me and I’m so glad to hear that … I’ve got companies (saying) we’re trying to hire people back and they’re saying ‘Nope, we’re good, we’re making plenty of money on the unemployment piece.’”
More than 200,000 Oklahomans have filed unemployment claims in the wake of the coronavirus pandemic, and Kouplen said in the meeting that there is “an urgency” to “build our economy and start building our habits back and start doing business” before federal stimulus money dries up.
“There’s not going to be another safety net, I bet,” Kouplen said. “The government can only continue coming forth with more and more and more and more dollars so often, so that is why we feel such an urgency. It’s not a race with other states, it’s not a knee-jerk reaction. It’s a very thoughtful discussion looking at the data and wanting to get our businesses back up and going again.”
Gov. Kevin Stitt, announcing last week his three-phase plan to re-open the economy starting May 1, said he believed the data showed at least a slow down in growth of new COVID-19 cases, hospitalizations and deaths, that made him feel comfortable re-opening the state. Some cities disagreed, but nevertheless will begin re-opening Friday.
Kouplen said businesses were not shut down to “eradicate the coronavirus,” they were shut down in order to “make sure we had the capacity in our healthcare system to handle these new cases.”
“And we feel like we have that, so that’s the reason for opening back up,” he said. “I know we have a lot of critics, it’s too soon, all that stuff … but we’re not ever going to get down to zero cases, so we would never open up businesses under that scenario.”
He also said the mental health of Oklahomans was another “important” piece of the decision to re-open the state. “One of the things that’s not talked about very much is the isolation, and we’re beginning to see domestic violence increases, depression, substance abuse, because people are either all alone or all cooped up in a small area,” Kouplen said. “So we just think it’s important for that mental health piece.”