A server brings food to customers on the patio at Plaza Azteca in Henrico, Va., May 16, 2020. (Parker Michels-Boyce/ For the Virginia Mercury)
Business owners, chambers of commerce types and some local officials around Virginia swore that ending enhanced unemployment benefits – of $300 a week from the federal government – would propel folks back into the workforce who’d been home during the pandemic.
The commonwealth should play a figurative Scrooge, these folks said, because places including restaurants, hotels and small businesses needed these employees. “Turbocharge the cash registers!” they cried.
This line of thinking was a gross oversimplification of the (so-called) post-pandemic economy. Nor do I think it was by accident. Demonizing low-wage workers has been a sport in this country for ages.
Several factors have kept people on the sidelines, not just the government largesse. The recent uptick in COVID-19 infections and persistent vaccine resistance, for example, would make anybody leery of working outside the home.
Democratic Gov. Ralph Northam has repeatedly said the commonwealth will keep doling out the checks until the Sept. 6 deadline, and a spokeswoman confirmed that to me again on Monday. It’s a wise, compassionate decision.
About half of the states, mostly led by Republican governors, ended their programs early, however.
Now a study by a university professor of the early impacts of canceling the benefits suggests there’s been no rush to return to the workforce – even after states declined the money.
“This doesn’t seem to have translated into most of these individuals having jobs in the first 2-3 weeks following expiration,” said Arindrajit Dube, economics professor at the University of Massachusetts Amherst. “However, there is evidence that the reduced (unemployment insurance) benefits increased self-reported hardship in paying for regular expenses.”
Those checks have been deemed wasteful recently by critics, but several factors are keeping people at home. Shame on those who said otherwise – and depicted many Americans as freeloaders for not waiting on tables, changing sheets, or ringing up customers.
Caveats abound to Dube’s study, as CNBC reported. Some states hadn’t reverted to a lack of federal benefits very long. Dube noted more time and information are needed.
Virginia Beach Mayor Bobby Dyer was among those who urged Northam to cut off benefits sooner. His tourist-heavy locality can use workers, especially during the summer. Many of those jobs, though, didn’t pay well and can be physically demanding. Many employers are now dangling fatter paychecks, but finding workers is still a hurdle.
Dyer told me Monday the issue is moot now, since September is around the corner and with it, the end of the peak tourist season. He’d talked to many business owners who were desperate for workers, and Dyer was voicing their concerns to the guv, he told me.
Dyer also said employers at places like Stihl Inc., which have higher-paying and higher-skilled jobs, have told him they can’t fill vacancies. “Workforce is the biggest challenge we’ve got,” Dyer said. “If we’re going to have businesses, we have to supply the bodies.”
Since the pandemic, however, many adults and families are reassessing the necessity of working outside the home. They value spending more time with their children, while giving up lengthy commutes.
And given our notorious reputation for being overworked compared to the rest of developed nations, many Americans wonder if our former job habits still make sense. Everyone is re-evaluating the trade-offs.
Vinod Agarwal is an economics professor at Old Dominion University and deputy director of its Dragas Center for Economic Analysis and Policy. I knew he’d give me a balanced assessment of the unemployment insurance controversy.
Business owners who say the enhanced benefits are the sole cause of the labor shortage are just wrong, he said. Since the pandemic started, some workers left the labor force entirely. Many women, Agarwal noted, made less than their male partners, and they often assumed the primary task of helping children who could not go to in-person school.
Minority women often had the task of taking care of elderly relatives, too. A Trump administration crackdown on J-1 visas for overseas workers also played a role, Agarwal noted, particularly in tourist-heavy areas like Virginia Beach and the Outer Banks of North Carolina.
Among formerly low-income workers, some now have greater flexibility and choices. “Unless the wages go up, a lot of these workers won’t return to the marketplace,” the professor said.
From daycare concerns and costs, to the aggravation of low-paying jobs, many families – especially those with two adults – are reassessing what’s important. Should they return to the market, when employers aren’t meeting their goals and conditions are less than desirable?
Enhanced unemployment benefits are going to end. Our place in the revamped economy is just beginning.
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