These workers get left behind when Idaho governor ends federal unemployment benefits
Kelly and Ryan McCoy were in Anchorage, Alaska, halfway through a two-month event put on by their business, when the coronavirus pandemic hit, and the event was canceled.
Their business, Sealing Time Ministries, a Bible-based event company that plans, produces and televises large religious gatherings, has not been the same since.
“(The year) 2020 was actually slated to be our best year ever, period,” Kelly McCoy said in a phone interview. “I mean, we had all sorts of things on the schedule that were just going to be amazing for our business.”
But it all disappeared because of the pandemic, leaving their highly specialized business on the ropes.
Fortunately, they received a lifeline: the federal pandemic unemployment assistance program, a temporary federal program passed under the original CARES Act that provides benefits for those who would not usually qualify for unemployment, such as self-employed people like the McCoys and others in the “gig” economy.
This program is similar to the federal pandemic unemployment compensation program, which provided federal unemployment benefits in addition to the “normal” unemployment benefits provided by states.
Those federal programs, paid for with federal dollars, were set to expire this September. But last week, Idaho Gov. Brad Little announced that he is ending Idaho’s participation in those federal programs, effective June 19.
His decision was based, at least in part, on a presumption — typically coming from employers — that workers were deciding to stay home because they made more money on unemployment than they would make working.
“Employers are telling me one of the big reasons they cannot recruit and retain some workers is because those employees are receiving more on unemployment than they would while working,” Little said in a press release announcing the change.
But for people like the McCoys and other self-employed Idahoans — particularly in the live-events and arts and entertainment industries — it’s not as simple as finding another job.
“It seems like there’s certain categories of workers that can certainly get back to work anytime,” Ryan McCoy said. “But there are others, specifically gig workers that are very specialized, and I don’t understand why the Department of Labor cannot say, ‘Hey look, we understand gig workers don’t have any gigs right now.’ I know a lot of people that are literally trying to sell off their equipment to survive.”
When I posted on the Idaho Unemployment Facebook group last week, asking for people to tell me their stories, I found a common thread of Idahoans who will be disproportionately affected by the governor’s decision: self-employed people whose businesses have not gotten back up to full strength and, in particular, businesses that are associated with the live-events industry. It’s not so simple to just say, “Get back to work.”
“I don’t feel it’s fair they ask us to go flip burgers when I can make literally $1,000 a day on events,” said Ryan McCoy, who added that he has tens of thousands of dollars’ worth of equipment invested in his business.
“And you have spent more than 15 years employing yourself and just to have it taken out from under us and be told, ‘OK, now you have to go look for an entry-level job,’ ” Kelly McCoy said.
‘Dropped on your face’
Krissy Adcock, of Boise, is an events manager with Aardvark Entertainment, which plans such events as weddings and birthdays, corporate parties and themed events.
As an independent contractor, Adcock, who’s been doing casino and events management for 20 years and has been with Aardvark for the past six, gets paid by the event.
Adcock said she’s looked for other jobs, but she’s limited in what hours she can work because she takes care of her 8-year-old special-needs daughter during the day. Her events schedule of nights and weekends was ideal, as she could leave her daughter with others while she was on a job.
“This is what I’ve done for the last six years solely,” Adcock said in a phone interview. “I haven’t done anything else, other than this the last six years, and, I mean it’s what I need, to be able to take care of my kid and be able to support myself. And now it just feels like you’re dropped on your face, I guess.”
During the pandemic, she was able to piece together enough money to make ends meet, but without unemployment, she’s preparing for the worst. She’s having a garage sale to sell as many of her belongings as she can, and she and her daughter plan to move into an RV. On top of all this, their apartment building is being sold, and the tenants have been told they have to move out — in one of the tightest housing and rental markets in the country.
Adcock said she knew the unemployment benefits would be running out soon, but she thought not until July or August. She found out through the Idaho Unemployment Facebook group that Little was cutting off benefits June 19.
There are signs that the live-events business is coming back. Adcock has two small events, 30-50 people, booked for June. But the chances of business returning to normal — Adcock would do two to four events in a good weekend — by Little’s June 19 cutoff date are slim.
“I get where the governor is coming from as far as like, well, let’s give them incentive to have to go back to work,” Adcock said. “But he is not taking into consideration, people that are in the events industry and that kind of stuff. We don’t have a choice, you know? Our business, our industry hasn’t opened back up where we can go back to work.”
Targeted help
So why not continue just the federal program for self-employed and gig workers?
“That’s one of the problems with a one-size-fits-all benefit program,” Jani Revier, Idaho Department of Labor director, said in a phone interview. “It treats everyone the same even though there are people in different situations, and so you have some people that may be self-employed, may not be able to start up. There’s also the chance you have people that are self-employed and may never be able to restart their business. And (some may) need to start looking for another source of income, because the benefits don’t last forever.”
So why not just wait until September, when the programs were supposed to end anyway? Why pull the rug out now?
“I think one of the calculations that was made is whether or not there was as much of a need for that additional assistance now as there was when they first started,” Revier said. “And as the economy has improved, there’s more work opportunities, and an argument can be made that the programs aren’t as essential as they were when we had so many people out of work, and there just weren’t job opportunities because so many businesses had to shut down because of (COVID-19). We’re just not in that situation anymore. There’s help wanted signs pretty much everywhere you look. There are plenty of job opportunities. This is a step toward helping fill those needs.”
As of March, 28,814 Idahoans were unemployed, Revier said. At the same time, there were 40,190 online postings for job openings in Idaho, she said.
“We have a ratio of 1.4 job openings per unemployed person,” Revier said. “So there clearly is, in my mind, that’s a clear indication that there’s a shortage of workers.”
But cutting off the federal unemployment benefits seems to simply assume that everyone on unemployment can fill the 40,000 jobs posted.
“I have personally received a rejection letter saying, ‘We have received such an inflow of interest in this position that we’ve decided to go with some of our more qualified applicants,’ ” Kelly McCoy said. “And it’s like, OK, well, I can run a TV production, but I can’t run your cash register. Yes, I may be overqualified for the job, but the Idaho Department of Labor says that I have to apply for it.”
About 17,000 Idahoans, including the McCoys and Adcock, are receiving the federal enhanced benefits, which is 59% of Idaho’s total of 28,814 unemployed.
Of those 17,000, about 6,600 earn regular unemployment insurance benefits that will continue, according to Department of Labor statistics. That means about 10,000 Idahoans will be without any sort of benefits come June 19.
Some of those 10,000, about 1,000 to 1,500, according to Revier, may receive regular benefits once federal benefits end.
Pushing wages up
Idaho’s unemployment rate is at 3.2%, one of the lowest in the country, and below a level that’s considered “full employment.”
Full employment is considered 4.5-5%, Robert Spendlove, economic and public policy officer for Zions Bank, said in a phone interview. Anytime you get below full employment, you get labor shortages, which cause wage increases, Spendlove said.
There already are signs that employers are paying more.
Idaho’s median wage in 2020 was up 5% from the previous year, and Idaho’s personal income growth rate of 5.6% in the fourth quarter of 2020 compared with the fourth quarter of 2019 was the third-highest in the country, according to Pew Charitable Trusts research.
Idaho could use a little wage growth. Idaho’s median wage for all occupations of $17.79 per hour ranks 44th in the nation.
Nationally, wage growth jumped 0.7% in April, which translates to over 8% annually, Spendlove said.
Bigger national companies, such as Amazon and McDonald’s, are raising wages, but that’s leaving smaller, often local companies struggling to find employees to work for lower wages, which is why the “labor shortage” complaints seem to be coming from smaller, local businesses.
Amazon, which has a big presence now in the Treasure Valley, earlier this month announced plans to hire 75,000 people nationwide, with $1,000 signing bonuses to vaccinated workers and hourly wages of $15 to $16 an hour.
“So Amazon is going to be stepping in and scooping up a ton of workers, because people will flock to those jobs,” Spendlove said. “And then the smaller employers have to try to compete with that, and they’re going to really struggle.”
So what can you make on unemployment?
When combined with normal state unemployment benefits, the enhanced federal unemployment benefits come out to about $15 per hour on average.
For Idaho’s regular state unemployment benefit, the minimum payment per week is $72 and the maximum is $463, according to Revier. The average is about $316 a week, according to Spendlove.
So you take that $316 average unemployment benefit and add to it the federal enhancement, and that’s $616 per week, or about $15 an hour, which comes out to $32,032 annually.
“And so the concern is that if a job pays less than $15 an hour, you’re economically better off staying on that enhanced benefit until the program is gone in September,” Spendlove said. “I think everyone acts in their own economic self-interest, and that’s a good thing. People make these calculations, all the time — is it worth it to engage, is it worth it to buy something, is it worth it to sell something.”
Even though workers may not actually be making more money on unemployment than they’d otherwise be making at work, it may be just enough to make them comfortable until they find the right jobs or while they wait until they feel safe enough to return to work.
Without the federal unemployment enhancement program, the average person on unemployment receives $16,432 annually. That’s closer to $8 an hour.
“Unemployment normally is designed to be uncomfortable,” Spendlove said. “You want to give people enough support to provide for their basic needs, but you don’t want unemployment to be a disincentive to work.”
But it’s cynical to suggest that there are 28,000 lazy Idahoans just sitting around watching “Gilligan’s Island” reruns collecting unemployment instead of going back to work.
“Most people that I know of don’t like to just sit back and do nothing,” Ryan McCoy said. “There are people like that, of course. You’re going to have those people, regardless of what you do, they will just lie and play the system. But all of that aside, most people inherently are driven to work.”
A year ago, after the CARES Act passed, the initial weekly enhanced unemployment benefit was $600 a week — on top of what someone received on normal unemployment.
“I totally supported it a year ago,” Spendlove said. “I thought it was absolutely necessary. Twenty-two million people lost their jobs as a result of the pandemic, and there were no prospects for returning. It was a scary time.”
But it’s not so scary anymore?
“Certainly not in Idaho,” Spendlove said. “Idaho is the strongest economy in the country.”
Only two states added jobs over the past year: Idaho at 1.4% job growth and Utah at 0.9%.
“Now, if you look at other parts of the country, it still, I think, makes sense to be providing the support,” Spendlove said. “You look at Hawaii is down 17.8% in their job market, and so there’s still people that are struggling to get back. But when you’ve got such a strong economy when you’re seeing these signs of inflation, that’s where we want to try to address those areas that may be constrained by growth.”
Other states ending benefits, too
At least 19 Republican-led states have opted to pull out of the federal enhanced unemployment programs.
“My decision is based on a fundamental conservative principle — we do not want people on unemployment,” Little said in the press release. “We want people working. A strong economy cannot exist without workers returning to a job.”
I’ve heard from others whose specialized businesses haven’t returned to normal.
Lisa Griffith is an esthetician, and “my entire industry is down,” she wrote to me in an email.
“I still have my job and will go back when I can, but I haven’t been able to yet,” she wrote. “I’ve spent the past year homeschooling my son 40 hours a week so we can stay safe. Without unemployment we lose everything. I was making $20 an hour before the pandemic. A $10 an hour wage isn’t going to cut it. My mortgage alone is $800 a month. It puts us in a tight spot.”
Other reasons workers not returning
Other factors are keeping workers out of the workforce, too.
“There’s still people that are nervous, if they’re immunocompromised or if they’re older and haven’t gotten that vaccination yet,” Spendlove said. “There’s concern about whether they’re going to catch it, so they’re nervous about going back to the job.”
Katrina Cavanaugh is a registered nurse whose baby son has laryngomalacia, which is a floppy airway, that puts him at increased risk for COVID-19. She was able to work via telehealth during the pandemic, but that is slowing down as in-person visits return. She is concerned about going back to work and bringing the coronavirus home with her and transmitting to her son. She was hoping that her son’s respiratory condition would improve by September and she would be able to return to work.
“While I know some people are abusing the system, many of us are not and really need the help,” she wrote in an email to me. “Unfortunately, the people not abusing the system have to suffer because of other’s bad intentions.”
In addition, lack of child care may be holding some people back.
“One of the systems that was really disrupted (during the pandemic) was the child care system,” Spendlove said. “And so … people are struggling to kind of get back to that normal situation where they go to the office and have that access to child care.”
The Idaho Association of Commerce and Industry, which represents Idaho’s largest businesses and industries, estimates that the lack of child care options costs Idaho employers $248 million in turnover and $166 million in absenteeism annually. That situation has only gotten worse through the pandemic.
“We cannot forget that the pandemic caused the shutdown of approximately 220 child care centers in Idaho,” state Sen. Janie Ward-Engelking, D-Boise, said in a statement. “Well-paid workers even struggle to afford child care, and the lower-wage earners are in an even tougher predicament. People cannot go back to work if they do not have child care or children back in school full time.”
Coupled with that is a national trend of women who have left the workforce. Nearly 3 million women have left the workforce nationally. So employers have fewer employees to draw from in the labor pool.
Idaho’s total labor force has increased by 9,000 over the pre-pandemic level, from 890,190 in March 2020 to 899,375 in March 2021, according to Idaho Department of Labor numbers.
“But that doesn’t paint the complete picture,” Revier said. “Because we have several populations that have decided to retire early or women that have to stay home and take care of their children.”
Idaho’s labor force participation rate has actually declined from about 64% before the pandemic to its current level of 62.8%.
Spendlove speculates that some women and older workers closer to retirement have decided to leave the workforce.
Another challenge for employers is that much of the economy has recovered quickly, not gradually as you’d see in a typical recovery.
So restaurants may be looking to hire 2,000 people to serve as wait staff all at once, but there may not be 2,000 wait staff workers at their beck and call. Some may have moved on to other careers in better-paying fields.
“The enhanced unemployment insurance benefits I don’t think are entirely causing it (the labor shortage), but the question is whether they are necessary at this point, to support people that are struggling,” Spendlove said.
Uneven recovery
While Idaho’s overall number of jobs has increased, it’s not an even growth.
Some sectors of the workforce have come roaring back: construction up 7%, financial activities up 9.4%, trade, transportation and utilities up 5%.
But other sectors are still struggling to regain their pre-pandemic levels. The beleaguered leisure and hospitality sector, which lost 3 million jobs nationwide because of the pandemic, is still down 0.5% in Idaho. Information jobs are down 11.4% in Idaho, and “other services” is down 6.3%.
So those 40,000 job postings in Idaho may not be in categories that specialized workers are looking for.
Revier wanted to stress that the Department of Labor has resources available for job seekers, including job search assistance and retraining programs for people who want to develop other skills and switch careers.
“Sometimes (claimants) need training, and we can help connect them to those training opportunities, so they can get the next job opportunity and no longer need to rely on the benefits,” Revier said.
But many of the people I spoke with are not interested in switching careers or learning different skills from what they’ve been doing for most of their adult working lives. Whether it’s a live-event producer, an esthetician, a nurse or an event planner, those whose careers have not yet fully come back were hoping for that lifeline for just a few more months.
For them, the end of the federal benefits will come too soon.
“I’m frustrated because the funding is there,” Ryan McCoy said. “And I think the governor and the Department of Labor could easily just say: ‘Hey gig workers, we’re going to give you guys a little bit more time, because we understand events just aren’t there yet. We’re going to give you guys till September or a few months more.’ I don’t really care. I would just appreciate a little more leniency, other than just, ‘Hey, you got 30 days till you lose your house.’ ”
This story was originally published May 27, 2021 at 4:00 AM.
