Unemployed Georgians will begin seeing less unemployment benefits as Gov. Brian Kemp said Thursday that he will cut off federal benefits.
Kemp said that the state Department of Labor will stop issuing $300 weekly checks in addition to regular unemployment benefits to jobless workers June 26.
The move is aimed at pushing out-of-work employees back into the job force, which is experiencing a shortage of workers.
Some economists say the extra unemployment isn’t the only factor that has led to a workforce shortage.
UWG’s Center for Business and Economics Research Director Dr. Hilde Patron Boenheim said there are several factors to consider in assessing the situation.
“Two key contributors to the workforce shortage are the incentives created by the higher unemployment checks and a shortage of trade skills,” Boenheim wrote in an email to the Sentinel. “Also, retail and restaurant workers are in short supply because of their increased risks during the pandemic.”
In the past few days, Kemp has gotten pressure for some business leaders, including the state Chamber of Commerce, to end the subsidies. The groups have complained that they can’t find workers for a growing list of openings as the economy continues to reopen with relaxed guidelines.
“It is hurting our productivity not only in Georgia but across the country,” Kemp said. “We’ve got to get more people into the workforce.”
The $1.9 trillion coronavirus relief package President Joe Biden signed into law in April extends the $300 weekly unemployment checks into September.
Boenheim said stricter requirements in obtaining the additional money would send more people back into the workforce.
“The unemployment subsidies offered since last year have, without a doubt, contributed to individuals staying out of the workforce,” Boenheim wrote. “In some cases, folks were able to get more from unemployment insurance than from having a job and earning a wage. However, the benefits have been declining and requirements to obtain them are becoming more stringent.
“For example, for the past year people have not been required to demonstrate that they had been actively searching for work in order to qualify for unemployment insurance. This waiver is ending in the next few months. With the decline in the amount of unemployment insurance, the more strict requirements, and the accessibility to a vaccine, individuals should start returning to work soon.”
Several state GOP members supported Kemp’s move to end the subsidies.
“President Biden and the federal government have turned their back on local business owners desperately facing labor shortages by continuing to hand out taxpayer dollars in the form of needless unemployment benefits,” state Senate President Pro Tempore Butch Miller, R-Gainesville said in a prepared statement.
Georgia AFL-CIO president Charlie Flemming called the move to drop the subsidies political.
“Their decision to economically coerce vulnerable, low-income Georgians into unsafe, underpaying jobs is political manipulation on full display,” Flemming said in a released statement. “Unfortunately, it is characteristic for this administration to prioritize the interests of their corporate donors and wealthy political allies over the needs of our working class communities.”
There have been about a dozen Republican-led states, including South Carolina, Alabama and Tennessee, that have decided to cut off the federal benefits.
Some companies have been offering sign-on bonuses to attract potential employees.
The decline in COVID-19 cases and the approval for the vaccine to be administered to 12-15-year-olds should help push more people back into the workforce, according to Boenheim.
“Sign-in bonuses, combined with lower unemployment benefits and lower risks of getting infected with COVID-19 thanks to vaccination efforts, should help close the gap,” she said.
Employers could see an influx of jobseekers with students returning home from college and high schools letting out for the summer later this month.
Boenheim said that can be a temporary fix.
“High school and college students tend to provide seasonal work to the retail and food services industries, which are two of the industries that have experienced large workforce shortages during the pandemic given the higher risk faced by those who work in restaurants and retail stores,” Boenheim said. “The temporary increase in the labor force from the younger population in the summer months should temporarily shrink some of the shortages in these industries.”