U.S. Secretary of Labor says cutting unemployment aid won’t fix worker shortages

By: - June 18, 2021 6:00 pm

U.S. Secretary of Labor Marty Walsh meets Rod Johnson, co-founder of the BLK & Bold coffee company. He was joined by U,S, Rep. Cindy Axne and Des Moines Mayor Frank Cownie. (Photo by Katie Akin / Iowa Capital Dispatch).

Gov. Kim Reynolds’ decision to end federal unemployment benefits early won’t solve Iowa’s worker shortages, U.S. Secretary of Labor Marty Walsh said Friday during a visit to Des Moines.

Reynolds announced in May that Iowa would stop participating in federal unemployment benefits in an effort to encourage people to return to the workplace. The federal benefits approved for coronavirus relief, including an additional $300 a week for unemployed Iowans, ended June 12.

Official portrait of U.S. Secretary of Labor Martin Walsh. (Photo courtesy of the Department of Labor)

But Walsh, a Democrat, disagreed with the idea that the additional $300 was keeping people from returning to work. Instead, he pointed to child care shortages and still-faltering vaccination rates in the state. Instead of providing incentives for people to take jobs, Walsh said the removal of unemployment benefits would primarily be a blow to “people who need the money.”

“I think it’s going to affect people that have been struggling through this brutal year in the pandemic, who have lost everything: lost their jobs, potentially losing their homes, potentially losing whatever they had,” Walsh said. “I think it’s going to have a big impact on that.”

Walsh emphasized that the country was still operating under unprecedented conditions as the economy recovers from the COVID-19 pandemic.

“They’re not looking for a handout,” he said. “What they’re doing is looking for their government to help them to be able to get through this pandemic. We’re still in the midst of a pandemic.”

Reynolds disagrees. In recent weeks, the Republican governor has urged Iowans to “lean further into normal,” touting the state’s recovery rate compared to other states and speaking about the COVID-19 pandemic in the past tense. Reynolds spoke to an Association of Business and Industry conference last week about her decision to remove the federal unemployment benefits before they expire in September.

“Today, we have more job openings than we have people on unemployment,” she continued. “So why would we allow the federal government to hamper our economic recovery by paying potential workers to stay home?”

At Friday’s event, U.S. Rep. Cindy Axne, D-3rd District, agreed with Walsh. She said Iowa’s workforce shortages aren’t new.

“We have struggled in Iowa to find enough workers for years,” Axne, a Democrat, said. “It’s not this $300 that’s keeping people from going to work, please.”

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Katie Akin
Katie Akin

Reporter Katie Akin began her career as an intern at PolitiFact, debunking viral fake news and fact-checking state and national politicians. She moved to Iowa in 2019 for a politics internship at the Des Moines Register, where she assisted with Iowa Caucus coverage, multimedia projects and the Register’s Iowa Poll. She became the Register’s retail reporter in early 2020, chronicling the impact of the COVID-19 pandemic on Central Iowa’s restaurants and retailers.