116 3rd St SE
Cedar Rapids, Iowa 52401
It’s going to get harder not to go back to work, if state lawmakers and the White House have their way.
Iowans won’t be able to receive Federal Pandemic Unemployment Compensation, Pandemic Unemployment Assistance, Pandemic Emergency Unemployment Compensation or Mixed Earners Unemployment Compensation beginning June 12, Gov. Kim Reynolds said Tuesday.
The FPUC added $300 a week in aid to the state unemployment benefits. Other federal programs lengthened the number of weeks out-of-work residents would be eligible and extended aid to those who otherwise would not qualify, such as freelancers.
Nationwide, the programs don’t expire until Sept. 4.
“Federal pandemic-related unemployment benefit programs initially provided displaced Iowans with crucial assistance when the pandemic began,” Reynolds said in a statement Tuesday.
“But now that our businesses and schools have reopened, these payments are discouraging people from returning to work.”
“I believe that Gov. Reynolds did the right thing,” Sen. Chuck Grassley commented on Wednesday.
U.S. Rep. Cindy Axne responded to the move by stating that, “Slashing (unemployed Iowans’) benefits only sends the message that Iowa isn’t on the side of its workers and their families.”
Nationwide, several states have begun requiring those receiving unemployment benefits to show they are actively searching for work, and a few will stop providing the additional federal supplement. Iowa reinstated its work-search requirement back in September.
Many blame the benefits that followed the pandemic. The argument is that people make more money staying home than going back to work.
Now, 14 months after COVID-19 put hundreds of thousands of people out of work, the U.S. economy is rebounding and employers are desperate for workers.
That challenge was highlighted May 7 when employers nationwide added only 266,000 jobs — far fewer than expected — and businesses reported they couldn’t find people to fill the openings they have to keep up with the rapidly strengthening economic rebound.
The U.S. Chamber of Commerce, a lobbying organization, contended one in four people out of work are earning more with unemployment benefits than they were when working, CNBC reported on its website Tuesday.
And an analysis by Bank of America economists found people who had earned up to $32,000 in their previous jobs can receive as much or more income from jobless aid.
Some unemployed people said the extra benefit allows them to take more time to look for work, which can make hiring harder.
Bonuses and job fairs
Eduardo Rovetto is hoping the state of Vermont’s reinstated requirement that people who are collecting unemployment benefits must seek work to qualify will help him hire enough staff for his restaurant in the resort town of Stowe.
After more than a year of coronavirus restrictions on his business, Piecasso Pizzeria and Lounge, he’s expecting a breakout summer tourism season — but as with many employers across the country, he’s worried he won’t have enough workers.
“We’ve been getting many excuses as to why not to return,” said Rovetto, who is offering a signing bonus of up to $600 to try to add 15 to 20 employees who agree to stay through the middle of October.
“Obviously it was a legitimate one with COVID, but, you know, I think that’s getting used less and less now. The vaccines are free, they are out there for anyone.”
It’s not just the hospitality sector that is scrambling to fill positions. Alene Candles, based in Milford, N.H., is trying to fill 1,500 positions for its facility there and another in New Albany, Ohio, to meet holiday demand.
Company representatives will be participating in a number of virtual job fairs this month.
“We have had more than 100 positions open since the start of the year, and just recently we increased sign-on bonuses to $1,200 for hourly positions — in part because we are competing with an entity that can print its own money, the federal government — and its $300 per week additional unemployment benefit,” CEO Rod Harl said.
“I would love to welcome those searching for work to join our team.”
But signing bonuses are beyond the reach of many small businesses, as Joe Brusuelas, chief economist with RSM, a Chicago-based consultant business, noted on business radio program “Marketplace” on NPR Tuesday.
On Monday, the state of New Hampshire reopened its job centers for the first time since the pandemic hit to help people looking for work. But only a handful showed up in the first few hours at the largest one in Manchester.
In Iowa City, Ramen Belly co-owner John Lieu — who previously owned Takanami — noted that, “This is the first time I’ve had to hire students under 18. Back then, I’d have stacks of applicants. You could pick and choose.
“Now, it’s whoever comes through the door. Hopefully they’re a good person and willing to work hard.”
Details and timing
Labor experts say the shortage is not just about the $300 payment. Some unemployed people also have been reluctant to look for work because they fear catching the virus.
Others have found new occupations rather than return to their old jobs. And many women, especially working mothers, have had to leave the workforce to care for children.
The details and the timing of the state-led efforts to get people back to work differ, but they are coming from states led by both Republicans and Democrats.
“As President Reagan said, the best social program is a job,” Arizona Republican Gov. Doug Ducey said when announcing the resumption of his state’s work-search requirement. “This statement rings true today.
“Unemployment benefits are still available to Arizonans who need them, but now that plenty of jobs are available, those receiving the benefits should be actively looking for work.”
Montana, South Carolina and Arkansas also are planning to stop accepting the $300 benefit.
In announcing earlier this month that beginning June 27 unemployed workers will no longer receive the $300 benefit, Montana Republican Gov. Greg Gianforte said it was “doing more harm than good.”
Rachel Mata, an area manager for a Fayetteville, N.C.-based staffing company, said it’s been increasingly difficult to find people for positions since the passage of the latest federal COVID-19 relief bill.
“We get candidates who will mention, ‘Hey, you know, why would I go to work when I get paid more on unemployment to sit at home?’” Matam said.
At a recent job fair, only one candidate showed up, said Mata, whose company, Mega Force Staffing Group, mainly focuses on manufacturing jobs. In other cases, candidates have gone through the staffing company’s onboarding process, only to not show up on their start date.
In Myrtle Beach, S.C., the heart of the state’s $20 billion tourism industry, restaurants and resorts are scrambling for summer help. Angelo Verdone, an assistant general manager at Seaside Resorts, said hotels are so short-staffed that managers are working double duty, cleaning rooms and doing maintenance. He is working some front desk shifts.
Some applicants have responded to ads but failed to attend the interviews. Others have gotten offers but did not show up to the job itself.
Though the company has offered a $500 sign-on bonus for its $11-an-hour housekeeping role, it got no takers.
“It’s not like they’re bad jobs,” Verdone said. “Most years, people are beating down the front door for the front desk jobs.”
William Spriggs, an economist at Howard University and the chief economist for the AFL-CIO, said the issue isn’t as simple as the unemployed being able to receive more benefits. He says the economy has changed. He said he didn’t think the job-search requirement is bad, but it won’t solve the labor shortage.
“Matching workers to employers isn’t as easy as people think, which is what some of these employers are finding out,” Spriggs said.
There might be a lot of jobs available, but in some cases they don’t fit for the unemployed with specialized work skills.
“I am a master technician with 30 years experience. You think I am going to go work in a pet store?” said Harry Chaikin, an out-of-work stagehand from Burlington, Vt., who lost his job last year when the theater where he works stopped offering performances.
Chaikin said he is eager to return to work when theaters resume normal performances. He’s receiving unemployment, including the $300 supplemental benefit, but he’s still months behind in his rent.
“The sense of optimism I feel is that human nature being what it is, I know that sooner or later people are going to gather again in big groups to be entertained, and when that happens I will have work,” he said.
And people still are losing their jobs.
Crystal Dvorak, 41, an audiologist in Billings, Mont., with two teenaged daughters, weathered a furlough early in the pandemic, dipping deep into her savings, only to find out last month that she would lose her job when the clinic where she worked for nearly nine years had been sold.
Gianforte announced on June 27 the $300 benefit would end — Dvorak’s second day of unemployment.
“It had me in tears,” Dvorak recalled.
After learning that unemployment benefits would be discontinued and replaced with a return-to-work, one-time bonus of $1,200, Dvorak began applying for waitressing jobs, even though it could complicate her search.
“Knowing that change is coming, I’m having to be open to other positions,” she said. “I have shown interest in more jobs in the last week than I have applied for my entire 25 years of working.”
Reaffirming the federal rules
President Joe Biden said Monday the White House will “make it clear” that Americans on unemployment must take a job if offered a “suitable” one or lose their benefits.
The White House said it is directing the U.S. Department of Labor to work with states on reimposing work-search requirements for Americans collecting unemployment benefits.
The Labor Department will soon issue a letter to “reaffirm” the rules of unemployment to ensure that workers, employers and states understand the rules of the program, the White House said.
In remarks in the East Room, Biden reiterated that the administration disputes Republican claims that April’s jobs data, released Friday, shows that unemployment benefits are too generous and causing workers to stay home rather than rejoin the workforce.
The White House did not announce a departure from previous policy on unemployment benefits.
Still, the president’s remarks suggest that the White House is sensitive to the growing political criticisms over their handling of the issue.
“We’re going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment,” Biden said in remarks in the East Room.
“There are a few COVID-19 related exceptions. ... But otherwise that’s the law.”
Associated Press and the Washington Post contributed to this report.