Missouri unemployment picture is complex, costly, confusing

The unemployment picture in Missouri continues to be confusing, complex and costly.

Missouri’s unemployment increased by a tenth of a percentage point last month, rising to 4.3% from 4.2% in May, according to Wednesday’s report from the department of higher education and workforce development (HEWD). It was the second consecutive month unemployment increased by a tenth of a percentage point. Last June, unemployment was 8%.

There were 4,522 fewer people working in June compared to May. Last June, there were 108,000 people seeking unemployment benefits.

The HEWD report stated 189,000 more people are working compared to June of last year. On Tuesday, Gov. Mike Parson said his decision to discontinue $300 a week in federal unemployment benefits, starting on June 12, increased employment.

“We know when we cut off the federal benefits it really helped the job market,” Parson said the day before the June unemployment report was released. “We’ve seen a definite increase in the number of people going back to work.”

The slight increase in unemployment is related to a temporary shortage in the supply of semiconductor chips, which caused production slowdowns in some manufacturing industries, according to the HEWD report.

The seasonally adjusted amount of jobs created in June was 4,200, according to the HEDW report. Most job gains were in goods-producing and service industries.

“Short-term shortages of semiconductor chips may hold down employment in manufacturing in the next few months,” the report stated. There are 130,000 more jobs in the state compared to June 2020.

The department of labor reported 6,489 initial unemployment claims for the week ending May 15, the week Parson announced discontinuation of the weekly $300 federal benefit. New claims decreased to 3,884 for the week ending June 19, the week the federal benefits ended. Last week, there were 5,717 new unemployment claims.

Overpayments

Missourians who mistakenly received an overpayment of federal unemployment benefits in 2020 can apply for an exemption from repaying the excess amount. However, the labor department announced it will start collections in August on mistakenly overpaid state benefits.

Parson said the state won’t follow the lead of the federal government in waiving repayment of state overpayments made in error, but there are ongoing discussions about the situation.

“We’re looking into what options we have,” Parson said on Tuesday after a ceremonial signing of a gasoline tax hike, effective in October. “But you just can’t do a blanket policy. If people misunderstood or just missed information and made an honest mistake, that’s one thing. But there are still people out there who took advantage of the system. So you can’t do a blanket policy and say, OK, you can get away with defrauding the system. You have to look at all of that. But I think the state wants to make sure people are treated right.”

The labor department distributed $146 million in overpaid unemployment benefits to about 46,000 Missourians, an average of $3,173 per person. In March, the House passed a bill to forgive the federal and state mistaken amounts by a 157-3 vote, but the initiative stalled in the Senate. During the special session in late June, Rep. Peter Merideth, D-St. Louis, filed a resolution calling for Parson to act on the problem.

“We gave Parson the authority and direction to forgive ALL non-fraudulent overpayments and he just refuses to do it,” Merideth posted Monday on social media. “He insists on state government kicking folks while they’re down and making them pay for the government’s mistake. It’s wrong and he needs to stop.”

Parson said his administration is continuing to analyze various options for resolving the overpayments.

“We’re working with the departments on that,” Parson said. “We’re trying to find out how we’re going to move forward on that solution. I think there are more conversations to be had. The general counsels are involved. There are a lot of moving parts to it.

“But, again, I think the important thing we do is make sure people get people back to work. We know there’s a shortage of workers all over the state right now because people are not going back to work. We have to find a solution for that.”

Costly

About 600,000 Missourians – 10% of the population – received more than $4.94 billion in unemployment benefits from several programs from March 2020 through April 2021, according to an updated report from Auditor Nicole Galloway. Government agencies and nonprofit organizations received an additional $30.2 million through the federal programs.

Galloway’s initial report last December found 500,000 Missourians received $3.8 billion from at least one of the federal unemployment benefit programs between March and October 2020. Also, through that date, approximately 1,600 government entities and nonprofit organizations received $22.8 million in emergency unemployment relief. The auditor created a website tracking all federal COVID-19 relief funds passing through the state.

This article was originally posted on Missouri unemployment picture is complex, costly, confusing

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