Restaurant lobbying groups and CEOs contributed to many of the GOP governors now ending pandemic unemployment benefits

In the month of May, a wave of 24 Republican governors across the country have announced that they will stop distributing supplemental unemployment benefits to their constituents in June. A cursory review of National Institute on Money in Politics data found that the majority had previously taken contributions from restaurant executives or owners of local fast food franchising companies. At least eight had received contributions from local affiliates of the National Restaurant Association (NRA), an industry lobby group; many of NRA’s subsidiaries have blamed labor shortages on the payments. 

In an interview with a local CBS affiliate, John Barker, president of the Ohio Restaurant Association, said that the industry’s hiring crunch was in part due to workers’ ability to earn more on unemployment benefits than off of them. In mid-May, Ohio Governor DeWine announced that the state would soon stop participating in the unemployment assistance program. The association’s political action committee contributed over $13,000 to DeWine’s most recent gubernatorial campaign, per state filings. (DeWine’s office did not respond to a request for comment. The Ohio Restaurant Association also did not respond to a request for comment.)

Similarly, Tennessee Governor Bill Lee recently announced that the state would also exit the program, which the state hospitality lobby called a “barrier” to hiring. The same lobby group contributed $11,800 to Lee’s most recent gubernatorial campaign. (Lee’s office did not respond to a request for comment. Tennessee Hospitality did not respond to a request for comment.)

Abbott previously took $12,500 from the Texas Restaurant Association PAC, which in May publicly called on the governor to end the weekly unemployment supplement. (The organization did not respond to a request for comment.) Doug Ducey of Arizona, Brian Kemp of Georgia, and Kim Reynolds of Iowa are among other governors who have also announced the termination of supplemental benefits, while previously having received contributions from local NRA affiliates, per data from the National Institute on Money in Politics. Supplemental unemployment benefits are administered through partnerships between state and federal governments, explains Politico; if a governor opts out, the federal government has little recourse to override that decision.

It’s not news that lobby groups make campaign contributions to candidates for public office, and the hospitality industry is far from alone in calling on policymakers to phase out financial bonuses for the unemployed. However, the restaurant sector’s unique struggles during the height of the pandemic last year, as well as its rocky recovery in the past few months, can lend insight into how businesses of all stripes might be throwing their weight behind certain policies with the intention of accelerating the pandemic recovery, and how those maneuvers could affect workers. Many governors who have announced the termination of pandemic unemployment benefits have cited high job vacancies in the restaurant industry as a motivating factor behind the decision.

According to the Congressional Research Service, the leisure and hospitality sectors saw some of the worst levels of unemployment in April of 2020, when the pandemic was first declared. One year later, the industry is now publicly struggling to restaff as the pandemic wanes. Restaurant owners bemoan ongoing labor shortages, despite a wide range of new efforts to entice applicants, ranging from referral bonuses, higher pay, health care and vacation perks, and more.

Many economists have said that attributing the $300 supplement for mass labor shortages is likely an oversimplification of what’s actually happening. For example, worker advocates have stressed that despite decreasing Covid-19 cases, significant obstacles to finding meaningful employment remain, including lack of childcare access and low pay.

“We’re making a lot of assumptions about why folks are on unemployment and are unable to take those jobs,” said Nicole Marquez, director of social insurance for the National Employment Law Project, referring to the narrative that people are choosing to live off of benefits rather than fill vacancies. For the sake of a long-term recovery, she suggested that lawmakers reject the easy narrative of a “labor shortage,” and instead reflect on policies that could make existing job opportunities more attractive and sustainable for workers.

“People want to work,” Marquez said. “And they want to work in jobs that have good systems and supports in place, like affordable child care, paid family leave, being able to have a job that’s safe and healthy, and livable wages.”

But that’s no excuse to stay jobless, if you ask Governor Abbott. 

“The Texas economy is booming and employers are hiring in communities throughout the state,” he said in his mid-May announcement. “At this stage of opening the state 100 percent, the focus must be on helping unemployed Texans connect with the more than a million job openings, rather than paying unemployment benefits to remain off the employment rolls.”