Just two weeks ago, Missouri was on pace to become a national leader on unemployment policy with legislation encouraging people to return to work faster and reduce unemployment fraud. Unfortunately, with the close of the legislative session, that is no longer the case. However, as legislative leaders and Gov. Mike Parson weigh the possibility of special sessions, they should consider finishing what they started in HB 649 and reform unemployment policy.
Parson has done his part, opting the state out of federal unemployment bonuses. He put it well when he said, “[Missouri’s] economy is built upon an active and vibrant workforce, and we should be cultivating job creation and employment rather than inhibiting them.”
The governor’s message is consistent with the true purpose of unemployment programs: reemployment. Properly designed programs lead claimants to the next job and make sure they get it as quickly as possible.
Unfortunately, despite passing through all the relevant committees in both chambers and passing the House of Representatives, legislation that would have comprehensively reformed Missouri’s unemployment system fell victim to time constraints on the Senate floor and was unable to cross the goal line. The legislation was a chance to make Missouri’s system more responsive to the job market, reduce waste and fraud, and even cut unemployment taxes for new businesses.
This legislation would have improved unemployment program integrity, reducing fraud by requiring the state to conduct weekly crosschecks of claims against information recommended by the federal government under both the Trump and Biden administrations. It would have helped weed out ineligible people, preserving resources, and reducing wait times for the truly needy.
The bill would have also modernized Missouri’s unemployment insurance program, connecting the number of weeks an individual can collect unemployment to the unemployment rate in the state. When the jobless rate is 5.5 percent or lower (which is widely considered full employment), Missouri would offer two months of unemployment benefits. For every half a percent increase in the jobless rate, a week would be added, up to the current maximum of 20 weeks (five months).
Perhaps most important to note about indexing is that Missouri’s Legislature has passed the concept before. If not for a veto by former Gov. Jay Nixon and a legal battle over the legislature’s override of the veto, it would already be the law.
These reforms are needed right now to help businesses get back on their feet. From Columbia to St. Louis, employers are having “unprecedented” difficulty finding workers. A framework needs to be in place to make sure that when jobs are plentiful, unemployment claimants are incentivized to take them.
The legislation would have protected the state’s trust fund, reduced dependency, and fueled an economic recovery by helping small businesses fill their many open jobs.
As these reforms are adopted all over the country, Missouri will lose its competitive edge. In the past six months, six states unanimously passed integrity measures like the ones proposed this past session, including Kansas and Arkansas. Tennessee and Arizona both passed a benefit duration indexing system this past session, joining model states like Florida, Georgia, North Carolina, and Alabama.
Missouri’s bill would have rivaled any in America. At the moment, however, Kansas has moved ahead by implementing the same integrity measures and even indexing benefits. Had Missouri’s reform package passed, it would have surpassed Kansas’ reform package in every way.
Parson can help rectify this by calling a special session to help the legislature finish what it started and help Missouri take its place as a national leader on unemployment policy reform. With 150,000 open jobs in Missouri, this policy cannot and should not wait.
Joe Horvath is a visiting fellow with the Opportunity Solutions Project.