I recently went to a popular Oklahoma City restaurant and I was surprised to see people waiting for a table at what appeared to be a nearly empty restaurant. On our way to be seated, I noticed signs on all the unoccupied tables, reading, "This table is currently closed due to staffing challenges." I chuckled at the in-the-flesh illustration of the argument The State Chamber presented to the Oklahoma Supreme Court in an amicus brief - government paying people not to work holds back economic growth.
Extended federal unemployment benefits enacted at the peak of the pandemic were meant to deal with the real consequences of government forcing businesses to close. Once the economy reopened and vaccines became widely available, payment of these extra benefits made little sense. Some made more money by staying unemployed than by returning to work.
It's not hard to see how this holds the economy back. Calls for remedying supply chain disruptions, repatriating manufacturing to the United States, buying products made in the U.S. and supporting local businesses all require a willing workforce. Jobs are available. Employers are hiring, or trying to.
After hearing from businesses about this crisis, Gov. Kevin Stitt ended the extra federal benefits, as permitted by federal law. Nonetheless, a lawsuit was filed to stop the governor from refusing these federal dollars.
To be clear, employers support the unemployment system. When conditions force workers to be laid off, employers want employees to be taken care of. At the height of the pandemic, the economic shutdown was a textbook example of why unemployment insurance exists. But it shouldn't be mistaken as a long-term program. It was designed to provide a bridge during short periods of unemployment resulting from no fault of the worker.
The lawsuit is meritless and would usher in unwise economic policy. If successful, the lawsuit would deepen and prolong the existing worker shortage in Oklahoma.
It also raises a question about state sovereignty. The federal government offers numerous funding streams if states agree to adopt a corresponding federal policy or program. To be constitutionally permissible, participation must be voluntary.
The plaintiffs point to a statement in Oklahoma law they argue requires the state to fully participate in the federal unemployment program. By this logic, would Oklahoma not be surrendering its discretion over which federal programs to adopt and which to decline? I can't imagine that's what lawmakers intended or what Oklahomans want.
Note: This article was first published in The Journal Record on August 6, 2021.