‘Stress and uncertainty’ follow Gov. Lee’s decision to end federal unemployment benefits

May 12, 2021 – Tennessee Lookout by: Sam Stockard – East Nashville bartender Richie Townsend finally got his old job back after losing it during the COVID-19 pandemic, but the months he spent on unemployment were anything but fun.

“It just creates a level of stress and uncertainty that makes it difficult to do your day-to-day. You can only spend so much time … looking for a job trying to turn things around,” says Townsend, who mixes drinks at Rolf and Daughters in Germantown. 

Townsend was miffed when he found out Gov. Bill Lee decided to end federal unemployment benefits for Tennesseans, effectively pulling $300 a week away from tens of thousands of people statewide, many of whom are still feeling the effects of the pandemic economic shutdown.

He doesn’t understand why the governor is opting to remove Tennesseans from the federal unemployment, especially since the state is accepting billions of dollars in federal funding for everything from schools to local governments and state government.

Nearly 112,000 Tennesseans received unemployment payments during the week ending May 1, and 61,000 have applied for jobless benefits, according to the Department of Labor.

“I’m confused by what his intentions are with it because the money is coming from federal (government). Why would it be necessary to cut that off? … He’s just turning it down,” Townsend says.

Lee, though, made it clear Tuesday he wants to stop federal pandemic unemployment payments so people will go back to work.

“We have a quarter-million jobs in this state that are unfilled, and we do have employers all across the state who desperately need workers, and we know too that pre-pandemic the strategies for moving people from unemployment to meaningful employment, the strategies we put in place are very important. We know that people want to work and we want to make that pathway for them,” Lee said.

The governor noted the state thrives when it focuses on “meaningful employment” rather than “short-term, federal fixes.” His administration is working on initiatives with the Department of Labor and Workforce Development to put people into jobs, he said.

People can go to one of 80 American Job Centers across the state for help or log on to www.TNVirtualAJC.com to research methods for removing employment barriers. The state also urges people to look for work at www.Jobs4TN.gov.

Federal pandemic unemployment programs will end July 3 in Tennessee, including an additional $300 weekly unemployment payment; benefits for those who wouldn’t normally qualify for unemployment such as the self-employed, gig workers and part-time workers; pandemic emergency unemployment payments for those whose regular benefits are exhausted; and additional $100 benefits for certain people with mixed earnings.

Since Oct. 4, 2020, Tennesseans collecting unemployment have been required to complete three weekly job searches to remain eligible. 

State legislators have given anecdotal evidence of East Tennessee companies that had multiple job interviews set up, only to have nobody show up. They cited this as evidence when passing legislation during the recent General Assembly to reduce the time frame for unemployment while raising the maximum monthly benefit to $325.

The legislation, which won’t take effect until December 2023, reduces the maximum time to receive unemployment benefits from 26 weeks to 12 weeks when the jobless rate is 5.5%. The time frame would increase a week each time the unemployment rate increases a half percentage point, up to 20 weeks.

Rep. Jeremy Faison of Cosby, chairman of the House Republican Caucus, supported the unemployment legislation, contending he believes it is time for people to go back to work. Faison and other Republicans in the supermajority believe plenty of jobs are available in the $15 to $20 range per hour.

“I appreciate @GovBillLee doing this. Our full economic recovery depends on all of us doing our part. The federal money will stop on July 3rd at midnight. Visit jobs4thn.gov for a listing over over 250k available jobs,” Faison said on Twitter in response to Lee’s decisions.

Democrats, however, immediately jumped on the governor’s move.

“More than 200,000 Tennesseans have been laid off since Jan. 1, and the Lee administration just made the irresponsible decision to punish their families in a time of need,” said Sen. Raumesh Akbari of Memphis, chairman of the Senate Democratic Caucus. “That’s not leadership, it’s legislative violence. This callous decision highlights just how out of touch this administration is with the lives of everyday Tennesseans.”

Rep. Vincent Dixie of Nashville, chairman of the House Democratic Caucus, said it’s hard to describe the move as another other than “heartless.”

“First, we cut the number of weeks that Tennesseans can collect unemployment, and then we literally take money out of their pockets from a system they paid into. It’s a targeted, heartless assault on people who are simply trying to feed their families at the worst possible time,” Dixie said.

U.S. Rep. Jim Cooper, a Nashville Democrat, also questioned Lee’s move, saying the American Rescue Plan included $300 per week in unemployment for people out of work as the nation continues to fight the pandemic.

“Why would Gov. Lee take $300 a week from unemployed Tennesseans? To for them to go back to work, even if they are sick, they have no child care, or there are not jobs for them?” Cooper said in a statement. “I voted to give Tennesseans this help during the pandemic, but Gov. Lee is taking it away. Is that how he would want to be treated? Is he obeying he Golden Rule? What would Jesus do?”

House Democrats and Republicans argued at length over the unemployment legislation a week ago, with Republicans saying too many people are avoiding work because they can collect the federal and state benefits, a total of $575 a week.

Rep. Kevin Vaughan, the Collierville Republican who sponsored the unemployment bill, contended it was designed simply to keep the state’s unemployment insurance trust fund solvent. He pointed out he went on unemployment in 1995 when his company let “one of their star employees go.”

“We want a trust fund to be a trust fund. We don’t want it to be a maybe fund. We don’t want it to be a situation where, hey, if I need these benefits, are they going to be there?” Vaughan said when introducing the bill. He argued it shouldn’t be underwritten by the federal government and pointed out more study will be done this summer on reviewing state unemployment.

In contrast, state Rep. Dwayne Thompson, D-Cordova, called unemployment a “very shaky and unstable bridge” for those who must apply. Thompson agreed the trust fund should be strong but said reducing the time frame “punishes workers.” Vaughan objected to that characterization.

“We need a good trust fund, we need a good business climate. But we shouldn’t do it on the backs of workers in this state,” Thompson said. He contended cutting the time frame would force more people onto government assistance and state food programs and possibly into illegal activities to feed the families.

At the latest count, Tennessee’s unemployment insurance trust fund had $1.1 billion. The state injected the fund with nearly $1 billion in federal CARES Act money in 2020 and could put even more into it to avoid a rate increase on businesses.

Rep. John Ray Clemmons pointed out during House debate that a state report ending April 21 showed a total of $72 million paid into the fund, $63 million of that by the federal government.

Clemmons, a Nashville Democrat, called the governor’s decision this week “fiscally irresponsible” and an “insult” to working families in Tennessee.

“In refusing this money, he continues to preach a false narrative that includes calling Tennessee workers and middle-class families lazy. It’s offensive, quite frankly,” Clemmons said.

Asked about the backlog of people in the unemployment system and those unable to return to work because of medical problems, Lee on Tuesday referred again to the number of open jobs, pointing out the state is trying to help obtain employment.

He added his administration is working with the Department of Labor to solve problems in the unemployment system. Lee contended many cases that are help up have a “complication,” not from the state’s side but from the applicant.

Lawmakers on both sides of the aisle said their offices have spent an inordinate amount of time in the last year helping people obtain their unemployment payments.

“We want to pay unemployment benefits to those who qualify for them. We absolutely want to do it,” Lee said. “But we also want to move people from a benefit to meaningful employment.”

Lee said the state conducted a county-by-county analysis of jobs to determine whether they offer a living wage and found the job openings often match the skills of the unemployed.

Townsend said he hopes the governor’s decision gives people some “incentive to get back to work” but without the hardships and stress of finding a good job.

Part of Townsend’s problem during the last year was a struggle to get payments from the Department of Labor. The money finally came through, though, he said. But he didn’t spend it on a big party.