Debi Jacks and her two teenage daughters are likely to lose their home soon.
The federal eviction moratorium ends July 31, and with no job, no more unemployment benefits, and rent that’s already past due, her outlook is bleak.
Jacks, 51, lives with her daughters in an Oklahoma City apartment. She was a structural welder for 25 years before she lost her son in late 2018.
After taking all of the next year off to cope with mental health challenges, she launched a service lending single moms an extra hand as a housekeeper, cook or tackling other odd jobs.
But months after launching her business, Two-of-You, in January 2020, the COVID-19 pandemic struck.
Jacks was forced to shut down and had to rely on state and federal unemployment to get by while she looked for another job.
So far, she hasn’t landed one.
With the Federal Pandemic Unemployment Compensation benefits ending last month, a tight labor market means thousands of unemployed Oklahomans, like Jacks, are still struggling to find work.
But business owners, especially those in the service industry, say they still have former employees on unemployment and are having a hard time finding workers to fill the vacant positions. The problem is keeping them from opening completely, and in some cases preventing businesses from opening at all.
David Riesenburg owns Oklahoma City’s Belle Isle Restaurant and Brewery.
In March 2020, the restaurant closed in response to a mandate restricting in-door gatherings. Upon reopening for curbside and take-out services, Riesenburg allowed his employees to choose if they wanted to work or not, whether it was because they feared the virus, or they weren’t getting enough hours due to reduced business. The restaurant has been severely understaffed since.
Riesenburg said he still has former employees on unemployment and wishes they would return to work. Without the extra benefits, he thinks they just might.
His restaurant has three locations in the 50 Penn Place mall, only one of which is open because of the light staff. He said the tap room above the main diner is only open for ticketed shows. He mentioned a particularly busy event where he had to have extra help.
“I had 22 people working that day between the upstairs and the downstairs,” he said. “Of my employees, I had 18 of them and four other people that didn’t work for me that were brothers, or boyfriends and girlfriends of staff, just to help us handle business.”
Since Gov. Kevin Stitt’s announcement in May, Oklahoma joined two dozen other Republican-led states in ending a $300-a-week federal supplemental unemployment benefit, known as FPUC, and another federal benefit aimed at helping gig workers called the Pandemic Unemployment Assistance, or PUA.
He said his decision was meant to help employers like Riesenburg find workers and increase below-standard labor participation rates. But as the unemployment and labor participation rates reach levels close to what they were before the pandemic, a tight labor market means closing the employment gap isn’t just about how much Oklahomans are collecting in unemployment benefits.
What the Numbers Show
Shelley Zumwalt, executive director of the Oklahoma Employment Security Commission, said the state has been seeing record job opening rates this year.
That mirrors what is going on nationally. According to the Bureau of Labor Statistics’ latest data, there were a record 9.2 million job openings across the country at the end of May. That’s up from about 5.5 million job openings at that time last year.
“The administration wanted to take action,” Zumwalt said. “We have employers that are trying to stay open, and they are not finding candidates. So how can we connect employers and employees, and what (does the administration) have control over in that scenario?”
She said the answer, now that businesses have the option to fully open, is unemployment benefits — who receives them, and what kind of training opportunities exist for those willing and able to participate.
Move Faces Legal Challenge
Oklahoma is one of 25 states that ended federal supplements to unemployment payouts. In Indiana, where workers sued Gov. Eric Holcomb for the move, a state court ruled that Holcomb’s decision was in violation of Indiana law and said it caused irreparable harm to Hoosiers by taking away their ability to pay for necessities such as rent, utilities, groceries and basic medical care.
Indiana appealed and requested that a new judge hear the case; the state argues that reinstatement of the benefits will prolong the economic recovery and harm Hoosiers more in the long run.
Now, unemployed Oklahomans face the same fate folks in Indiana are fighting to avoid — lawsuit and all.
On July 7, Tulsa County resident Ronda Kay Owens petitioned for a declaratory judgement and injunctive relief against Zumwalt in her official capacity as the executive director of the Oklahoma Employment Security Commission. In the petition, Owens’ attorney, Chadwick Smith, argues her position on three grounds:
- The Oklahoma Employment Security Commission is an independent state agency created by the Legislature. Nowhere in the Oklahoma Employment Security Act is the governor granted policy, administrative, or enforcement authority over the commission or Zumwalt.
- The Commission exists to provide unemployment benefits to Oklahomans who qualify, and help them find jobs, not to work as a vehicle to enforce political policy aimed at economic recovery or build a business-friendly environment in the state.
- OESC has a statutory mandatory duty to seek the federal supplements for unemployed Oklahomans. The Oklahoma Employment Security Act states that the commission is to take all advantages under the Social Security Act, of which the Coronavirus Aid, Relief, and Economic Security Act is an extension.
Zumwalt said the agency cannot comment on pending litigation, while Owens has been directed by her attorney to not comment to the media.
The case will be heard July 20 by District Court Judge William J. Musseman.
But Owens isn’t the only Oklahoman suing the government over unemployment. At least one other lawsuit has been filed against Stitt and the Oklahoma Employment Security Commission. This lawsuit asks the Oklahoma Supreme Court to directly order the OESC to restore the federal benefits and is expected to be heard on Aug. 11. The hearing will take place after the federal benefits expire, but can set the precedent for similar cases.
Thousands Seek Help, Answers
Jeri “Jae” Robinson-Guthrie, 49, lost her two jobs as a marketing merchandiser in 2019 and, having been unemployed before, was familiar with the process and filed an unemployment insurance claim. After spending about four weeks waiting for her claim to be adjudicated, she joined the Oklahoma Unemployment Issues Facebook group and became an administrator shortly after.
With more than 7,000 members, Robinson-Guthrie said she thought there were too many Oklahomans needing help for her not to volunteer as an admin. She finally found a paid job in early July as a remote banking customer service representative, but has spent the last year becoming an expert in state unemployment benefits and helping Oklahomans navigate the process. Because federal unemployment supplements ended June 27, more than 100,000 Oklahomans are scrambling to find out how they will pay for basic necessities.
Robinson-Guthrie said every unemployment claim is unique and that the reasons people are on unemployment vary from having lost their jobs and being concerned about the pandemic to not having access to child care, or being too old, too experienced, living too far away, or having previously worked in an industry that doesn’t exist at the same capacity.
She said she knows there are people sitting back and just drawing an unemployment check, but that no unemployed Oklahomans were consulted by the government to find out what most people are going through in the state, so there was no obvious attempt to try to balance the consequences of the decision.
“There’s people that always milk the system; there’s people that when they work, they milk the time clock,” Robinson-Guthrie said.
“I am not saying that doesn’t happen,” she said, explaining that it has happened with any state or federal funding that has ever been made available. “But these are people who can’t afford even $20 for blood pressure medication because every bit of money they get is going to rent and utilities. A lot of them don’t know what they’re going to do.”
The end of the federal benefits is only the latest of recent challenges for Oklahomans when it comes to dealing with unemployment insurance. Last fall, the pandemic and issues with widespread fraud created a backlog in adjudicated claims, which caused some unemployed Oklahomans to wait up to three months before receiving benefits. Today, the average wait time for a claim to be adjudicated is 14 days, but as Robinson-Guthrie pointed out, for those who waited longer than a month when the backlog was at its height, it’s likely too late; they’ve already missed rent, utilities and other basic expenses.
“You don’t get anything (while in adjudication),” Robinson-Guthrie said. “That’s what people don’t understand. They keep saying that the FPUC and PUA payments are stopping people from going back to work and that people are lazy, but they do not realize you have to fight for unemployment.”
Jacks, who doesn’t qualify for traditional unemployment insurance, said her ex-husband can likely take their two girls when she loses her apartment. But her plans include a truck and a tent.
“I don’t trust the government, I don’t,” she said. “Because right now I see too many people hurting, and suffering, and this isn’t how life is supposed to be – worried about whether you got a roof, food, if your kids are safe – life should not be a fight every day for survival.”
She said she can understand wanting to end the additional $300 from FPUC on top of regular benefits, but that ending the PUA, which was the only fund helping the self-employed, is causing unnecessary harm without consideration for what is going to happen to people who depended on it.
“The benefits are gone. They’re gone,” Jacks said, elaborating that she had been using the funds to help her improve her business in the long-term. “I was paying my way to take some classes, because with that, I was adding in frequency healing, sound bath therapies and vibrational healing.”
She has lost track of how many job applications and resumes she has submitted but has applied for all kinds of positions, such as a butcher, a job she had in the 1990s. She’s rarely heard back, except for a few emails telling her the employers went with someone else. Welding isn’t an option anymore because of nerve damage in her hands.
“I voted for (Stitt) too, if that matters,” she said in between resigned chuckles. “I’ll put it this way: If elections were today, I would not vote for him again.”
Oklahoma’s unemployment levels have recovered from the pandemic at a faster pace than the rest of the nation. The state’s unemployment rate is 4%, which is significantly lower than the 13% it was in 2020, but not quite the 3% it was in 2019. The unemployment rate for the U.S. spiked from 3.7% in 2019, to 14% in April 2020, and was back down to 5.8% as of May 2021.
The labor participation rate in Oklahoma is 60.7%, fractionally lower than it was before the pandemic and a full percentage point higher than it was last spring. The national rate, which was a point higher than the state’s before the pandemic, has had similar fluctuations, but has not recovered as quickly as Oklahoma’s.
The unemployment rate counts those who are unemployed and looking for a job, while the labor participation rate counts people who are employed or unemployed and looking for a job. If someone is not looking for a job they are not counted in the labor force participation rate. Chad Wilkerson, chief economist of the Oklahoma City branch of the Kansas City Federal Reserve, said that alone the rates aren’t going to explain the status of Oklahoma’s labor market, but when considered together they provide a better picture.
Wilkerson said the fact that Oklahoma’s unemployment and labor participation rates are both close to pre-pandemic levels – something that is not true for the nation as a whole – means the labor market in this state is tight.
“There are not as many people on the sidelines if you will, either not working or not in the labor force relative to the recent past as in the country,” he said. “If you’re getting unemployment insurance, I think you technically have to be looking for a job, which means you’re counted in the labor force participation rate. So, to be getting the benefits, you are in the labor force. I don’t think that changing that will affect what the labor force participation rate is.”
That means employers like Riesenburg might get some of their employees to return to work, causing the unemployment rate to lower while the labor participation stays where it is.
But Riesenburg acknowledged that unemployment benefits aren’t the only reason businesses in the service and hospitality industries are having trouble finding workers. He said restaurateurs in Oklahoma City know that the explosion of the medical marijuana industry has pulled workers away from businesses like his.
“The majority of the employees that they hired for the dispensaries and the cultivating places and where they grow it and all that, came from the hospitality industry,” he said. “And they’re being paid cash, and they’re being paid more.”
He said he knows of at least two of his own employees who have transitioned to the cannabis industry after leaving his restaurant, and that fellow restaurateurs are seeing a similar trend. He said he learned through hearsay and news reports that some cannabis firms use only cash due to difficulties with getting banks to work with their money, and finally experienced it firsthand when the restaurant was paid in cash for a catering service by a dispensary.
Rep. Monroe Nichols, D-Tulsa, said there are two main reasons people have not returned to work: They have either found work elsewhere or wages in the state are too low.
“Why should you make more on unemployment than you would make if you were working?” he said, explaining that the minimum wage in Oklahoma hasn’t changed since it adopted the federal standard of $7.25 in 2008.
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Riensenburg said some of the pushback to raising wages at local eateries like his is that the pandemic not only caused a staffing shortage, but it increased the prices of everything needed to keep a full restaurant, bar and brewery running. Increasing wages would mean Riensburg would have to raise menu prices.
“If $15 an hour was the minimum, then your honey-pepper bacon burger is going to cost you $19 (instead of $9.89),” he said. “The margins are not that great in this industry.”
Riesenburg said he pays his waitstaff and bartenders the minimum $2.15 hourly rate or more. After tips, he said his waitstaff make between $16 and $18 per hour, while bartenders make between $20 and $22 dollars per hour.
Right before the benefits ended, Oklahomans who qualified for traditional unemployment insurance received weekly payments equal to 1/23rd of their wages in the highest paid quarter of the base period, up to a maximum of $539, plus $300 from the Federal Pandemic Unemployment Compensation program. With the maximum possible payout being $839 a week, someone in the service industry might make the same amount from unemployment as they would after tips and wages are added together. Riesenburg said that with the maximum amount being cut to $539, his workers are less likely to stay unemployed.
“I think one thing that almost certainly will happen is some people will return to work because the unemployment insurance is less,” Wilkerson said. “But at the same time, there also will be a share of people who do not, because that’s not what’s keeping them from working in the first place.”
Jacks is one of 103,300 Oklahomans in the workforce still struggling to find a job, while 70,800 more remain uncounted in the workforce at all. She signed her next year’s lease and paid for July’s utilities because it was the only way she could buy herself more time, knowing she doesn’t have the money to pay the rent.
“I’ve been trying for a job for over a year and I’m honestly shocked I haven’t found anything,” she said. “Me and my children could very easily become homeless.”
Editor’s note: This story has been updated to reflect the current average wait time for the adjudication of unemployment claims, which is 14 days.