Business people petition governor to end supplemental unemployment payments

LOVELAND — A group of about 170 business people from Northern Colorado has signed a letter asking Gov. Jared Polis to end now the special unemployment benefits that are not set to expire until September. 

The signers, as noted in the letter, believe that the benefits are keeping some people from returning to work at a time when businesses are trying to operate at full capacity but unable to find people to fill positions. Others, however, say eliminating the payments won’t necessarily cause people to return to work if other factors have greater significance to them.

“Our economy is booming in Colorado, but our small businesses are constrained by the lack of available workers. We are asking Gov. Polis to rescind the voluntary extended federal unemployment benefits of $300 extra per week,” Pete Gazley, president of Total Facility Care, a building maintenance company in Northern Colorado, said in a written statement. “There are more jobs than workers, so removing this would incentivize people to get back into the workforce. As the state has opened, we believe it is safe to return to work. Fears over coronavirus can be easily overcome with the easy accessibility of the vaccine and what are now common safety practices,” he said.

“We are in a new place in our economy, and we need to be doing everything we can to ensure we are getting people back to work. In health care, if we don’t have the strong workforce to serve our patients and clients, then we all suffer,” said Yvonne Myers, health systems director at Columbine Health Systems.

The letter to the governor admits that the move may be controversial. About half the states, especially those led by Republican governors, have already eliminated or plan to eliminate the bonus federal unemployment payments.

Some national studies, including one by the Federal Reserve Bank of Chicago and another by the University of Chicago, question the impact of doing so, saying that other factors such as pay rates and COVID fears also affect the decision to return to work. 

Francisca Antman, an economist at the University of Colorado who specializes in labor economics, economic development and public economics, told BizWest that eliminating the supplemental payments may cause some to return to work but the jury is still out on whether other factors are having a bigger impact. Those factors might be the concern of some about getting sick or because they are caring for children or people who are immunocompromised.

“Theoretically, any non-labor income would have an impact [on return to work],” she said. “This is a health pandemic, and unemployment is tied to that. There are a lot of other factors to consider. If more people get sick, that affects the economy, also.”

[We can’t just say] “if it’s suppressing employment we shouldn’t do it [provide supplemental payments]. Further assistance also stimulates the economy,” she said.

She said experiences in other states might provide some insight on whether eliminating the supplemental payments work. “We’re going to know soon when the payments expire,” she said.

Martin Shields, economist at Colorado State University, said research on the topic is still developing, but he cited a Yale study that concluded, “We find no evidence that more generous benefits disincentivized work either at the onset of the expansion or as firms looked to return to business over time.”

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