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Frank Phillips, owner of a handful of coffee franchises based in Paulding, Georgia, says he received 200 job applications when he opened a new location. For its most recent opening in March, it had 35.
One of the factors to blame is the unemployment benefits that laid-off workers have been receiving during the pandemic, sweetened with a federal government surcharge that currently adds $ 300 a week to checks they receive from states.
“There’s too much competition in the market when the federal government plays in this playground,” Phillips says. “We need to get the federal government out of the way so we can do business.”
As states find themselves out of closure and the economy grows, companies, especially those engaged in leisure and hospitality, have reported that they are not finding enough workers to meet growing demand.
Some larger companies, included Walmart, McDonald’s and Chipotle they have tried to attract workers with incentives such as hiring bonuses and raising wages, while some smaller employers say they have been forced to cover additional shifts or reduce operations.
Some fear that the shortage of willing workers could slow the recovery of companies from the pandemic and benefit from booming demand. Conservatives say the Biden administration’s extension of a $ 300-a-week surcharge on states’ existing unemployment insurance benefits through September may have encouraged some workers to stay home instead of looking for a new job.
His worries were magnified by an unexpected stop in job creation in April, although employers reported a record number of job vacancies to the Bureau of Labor Statistics.
The Covid crisis forced the federal government to do so dramatically zoom in its safety net, from managing the deployment of vaccines to spending billions of dollars on incentives. Republicans say it’s time to go back, starting with unemployment insurance.
In an attempt to push people into the workforce, more than 20 Republican governors have decided to eliminate federal surcharges on their state’s unemployment insurance systems before they expire.
More than half of Americans support the reduction in unemployment benefits, a poll by Quinnipiac University meeting. But workers and labor advocates say what the economy really needs are safer jobs and better pay, and economists say focusing on unemployment benefits overlooks the real reasons why many people have not yet returned to work.
A poll of 2,000 people working in restaurant kitchens run by the staffing firm Mis en Place found that 26% have permanently left the industry. Some mentioned long hours and relatively low pay.
One-third of the workers surveyed by Mise en Place said they planned to return, but had not yet done so for various reasons. Some said they were still looking for the right opportunity or were worried about hiring Covid-19. Only 6% cited unemployment benefits and stimulus controls.
Researchers at the Federal Reserve Bank of San Francisco last summer found that the federal bonus, which at the time was $ 600, would prevent a few unemployed workers from accepting a new job. He current $ 300 recharge benefit it will probably only have a small impact on companies ’ability to find workers, they found.
It is unclear to what extent it will be successful to cut the extra benefits to get people back to work, says Josh Bivens, research director at the Institute for Economic Policy, which is on the left.
“These have become much less desirable jobs because of the pandemic,” Bivens says. “If someone has to show up at a pretty crowded restaurant, they might still not feel good about it, and I think that’s pretty rational.”
States where federal unemployment benefits are reduced experienced temporary rises in job searches after the initial announcement, according to the Indeed job. However, this explosion of search activity faded after several days.
Activists and some economists say that benefits can only be one of the factors that workers consider before they take up employment.
“There are people who earn more in unemployment than if they took a job, but I think it’s a gamble to assume that this is the only reason some companies have trouble hiring,” says AnnElizabeth Konkel, an economist at Indeed. “We are still in a pandemic. Workers are still concerned about the public health situation.”
Konkel says childcare responsibilities are likely to be a more important factor for women, who represent both a large number of workers who left the workforce during the pandemic and the staff of leisure companies. and hospitality.
Schools that returned to classroom instruction are running out for the summer and other facilities, including summer camps and daycares, are operating at lower capacities.
Worker shortage reports are largely limited to the leisure and hospitality sector, according to economists. In other fields such as construction, arts, entertainment and recreation, job seekers still exceed the number of open positions from two to one, according to BLS data.
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