Gov. Kevin Stitt (R-Okla.) announced that the pandemic-related federal unemployment assistance for Oklahomans would be phased out, but the state will incentivize jobs by paying people $1,200 to get off unemployment benefits.

The Oklahoman governor on Monday, May 17, signed an executive order establishing the Return to Work Incentive, which encourages people to look for work rather than rely on unemployment benefits, according to The Oklahoman.

The first 20,000 people who qualify and apply for the program will earn $1,200 after six weeks on a new job. 

With this move, the state of Oklahoma is joining several red states who are ending their pandemic-related unemployment relief, including Mississippi, Arkansas, South Carolina, and Montana.

“Our challenge is not to get businesses back open; we’ve done that. It’s been getting employees back to work,” Stitt said. “Without a doubt, one of the factors causing this has been the continued extension of extra federal benefits.”

Back to work:  COVID-19 federal benefits shutdown

Oklahoma would now stop dispensing all additional federal unemployment benefits that were put in place last year when the COVID-19 pandemic caused record levels of unemployment. Included is the following:

  • The $300-per-week Federal Pandemic Unemployment Compensation (FPUC) supplemented into other unemployment benefits.
  • Pandemic Emergency Unemployment Compensation (PEUC), which extends unemployment insurance beyond the standard 26-week period.
  • Pandemic Unemployment Assistance (PUA), which pays compensation to self-employed and gig employees who would otherwise be ineligible.
  • Mixed Earner Unemployment Compensation (MEUC) paid an extra $100 a week in benefits to people who earned at least $5,000 from self-employment in the previous taxable year but were not earning PUA benefits.

Oklahoma is giving people six weeks to find work after declaring the end of pandemic-related benefits now.

The federal government has instructed states to give people at least 30 days’ notice before terminating the payments. After June 27, the only state-run financial assistance available to unemployed Oklahomans will be conventional unemployment insurance, which was in place well before the pandemic.

Claimants who earned Pandemic Unemployment Assistance, Pandemic Emergency Unemployment Compensation, or standard unemployment between May 2 and May 15 are eligible for the $1,200 reward. They must also work at least 32 hours a week for six weeks in a row with the same employer.

Distribution of payments will commence the second week of July. President Joe Biden’s American Rescue Plan provided the funds.

Oklahoma businesses wrestle to find employees

Shelley Zumwalt, executive director of the Oklahoma Employment Security Commission, noted that about 90,000 people are currently receiving FPUC. She claimed that 200,000 Oklahomans are job-eligible but are unemployed.

“Right now, we have around 200,000 people that are workforce eligible that have not returned to the workforce, that is a considerable amount of people. We actually have 37% more job openings in the state than we did pre-pandemic,” said Zumwalt.

“I hear from employers every single day about their struggles to find staff for their businesses,” she added.

Erica Hering, owner of Ralph’s Packing in Perkins, has firsthand experience with the labor shortage. She said she would need 45 people to operate the 35,000-square-foot meat processing plant.

“For the last three and a half months, I’ve been running it with 35 employees,” she said. “I have an additional 12,000 square feet coming online in a month and a half; it’s going to take eight more employees to run that part of the business.”

Acme Engineering and Manufacturing in Muskogee is also having trouble finding staff. Brian Lanham, executive vice president of manufacturing and operations, said that he wants to recruit 30 employees.

“We’ve been to job fairs. We hire staffing agencies. The real issue is just there’s no candidates, and it’s real. There’s no candidates,” Lanham said. “Thirty-five years I’ve been in the factory—never in my life have I seen it like this today.” 

Finding a willing and prepared workforce to receive a paycheck is also a problem in the service sector. According to a survey conducted by the United States Census Bureau in April, more than a third of small businesses in the hospitality and food service industries are having difficulty recruiting workers.

OESC is holding two job fairs in Oklahoma City this week to help employers communicate with potential workers. The Oklahoman will hold its work fair at the State Fairgrounds on Wednesday, May 19, which will feature 45 businesses searching for employees from various industries.

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