The legislator wants to abolish unemployment benefits and encourage job seekers | Business
As business owners search for ways to attract people to work, Pennsylvania elected officials are considering a new law that would not only cancel improved unemployment benefits, but incentivize job seekers.
Job search rules are expected to resume for benefit recipients on July 18, while the additional $ 300 per week in COVID relief is expected to expire in September.
State Representative Jim Cox doesn’t think it’s soon enough.
In May, the Republican representing the counties of Berks and Lancaster house bill 508, which would phase out participation in the federal pandemic unemployment compensation program and in its place create a back-to-work bonus for workers.
“We want as many Pennsylvania workers as possible to earn paychecks rather than cash unemployment checks,” Cox said in a statement.
If the bill passes, former job seekers would be entitled to a bonus of $ 300 for four consecutive weeks of work. Those who would stay with the same employer for eight weeks would then be eligible for another bonus of $ 300.
Cox, who also chairs the House Labor and Industry Committee, argued that while improved benefits were needed for some time, they have become the driving force behind the labor shortage of the state.
âWe know that additional federal unemployment benefit payments are a big part of the worker shortage problem because it doesn’t just happen here in the Commonwealth,â Cox said.
âThe federal government provided very generous unemployment benefits when the economy was shut down and jobs were hard to find,â he said. “With the economy opening up and jobs available to workers who want them, these federal unemployment dollars have become a drag on work.”
It’s unclear whether Bill 508 would have bipartisan or bicameral support – the legislation is co-sponsored by another Republican, Lehigh County Representative Ryan Mackenzie – or if Cox’s Democratic counterparts share his point of view.
Representative Gerald Mullery, Lucerne County Democrat and Minority Chairman of the House Labor and Industry Committee, declined to comment on the proposal, unemployment benefits or the labor shortage.
However, during a Committee hearing of May 24 On the transition from unemployment to work, Mullery has grilled Acting Department of Labor Secretary Jennifer Berrier over the number of claimants who would see their benefits cut when the bill passes.
Mullery also suggested during the hearing that there may be other reasons a person changes or leaves a job, such as pay or benefits.
Cox was more direct.
“We want unemployment compensation to be an effective safety net for catching falling workers, but not a hammock for pampering people who don’t want to work for a living,” Cox said in the statement.
Even if the bill passes the House and Senate without bipartisan support, it could be vetoed when it lands on Governor Tom Wolf’s desk.
The 2020 dive
The initial shock of the pandemic to the workforce was revealed in the April 2020 unemployment reports.
For Berks County, the State Department of Labor and Industry initially had the rate of 17.6%, which was recently revised to 18.4%. The ministry regularly adjusts its figures on an annual basis.
In southeastern Pennsylvania, outside of Philadelphia, rates this month ranged from 11.9% in Chester County – which normally has one of the lowest in the state – to 15 , 5% in Delaware County. Montgomery was at 14.1%.
Before the pandemic hit, those rates were all below 5% in February 2020 with Chester at 3.3% better, with Montgomery at 3.6% and Delaware at 4.2%.
Thirteen months later, in the latest data available from May 2021, those numbers have dropped significantly: 3.9% in Chester, 4.7% in Montgomery, 5.9% in Delaware and 6.3% in Berks.
However, a deeper dive into the numbers shows a workforce still struggling to come back.
Unemployment rates are going down, but that’s relative to the number of people counted in the labor force.
- Pre-pandemic: 208,000 employees out of a workforce of 218,000.
- April 2020: 169,000 employees out of an active population of 206,000.
- May 2021: 191,400 employees out of an active population of 204,000.
- Pre-pandemic: 281,000 employees out of a workforce of 291,000 people.
- April 2020: 237,000 employees out of an active population of 270,000 people.
- May 2021: 268,000 employees out of an active population of 278,500.
- Pre-pandemic: 445,000 employees out of an active population of 461,000.
- April 2020: 374,600 employees for a workforce of 436,000 people.
- May 2021: 421,000 working for a workforce of 441,000.
- Pre-pandemic: 290,200 out of an active population of 303,000.
- April 2020: 243,000 employees out of 288,000.
- May 2021: 272,600 working out of 289,000.
Government statisticians do not count those who do not have a job and are not looking for one.
So, would stopping the extra $ 300 a week get more people back into the workforce?
Sarah DeSantis, press secretary for the Ministry of Labor and Industry, said stopping these payments would not necessarily force many unemployed. Each worker has their own reason for not coming back.
In addition to personal safety or childcare concerns, some workers are simply looking for more lucrative employment.
“L&I did not find additional unemployment benefits or suspension of job search to be a major factor in the perceived labor shortage,” she said. âMany Pennsylvanians are still waiting to complete the full immunization process or face other pandemic-related factors that are preventing them from re-entering the workforce, such as children’s distance learning from home or lack of services. on call.
âPennsylvanians who are ready to return to the workforce are already attracted to certain employers or industries by higher wages, signing bonuses and other offers. As more and more Pennsylvanians are vaccinated and as the number of cases decreases, more workers will feel comfortable returning to work. why it is important that all Pennsylvanians get vaccinated as soon as they are eligible. “
DeSantis said these additional payments are also pumping money into the economy.
According to L&I workforce data, economic activity resulting from federal supplements and unemployment benefit extensions saved or created 81,200 jobs in Pennsylvania.
DeSantis said the Federal Pandemic Unemployment Assistance Program, which provides people who receive unemployment benefits an additional $ 300 on top of their weekly payments, injects about $ 250 million into Pennsylvania’s economy. every week.
âThese $ 300 payments are spent in local economies, supporting small businesses across the state,â DeSantis said. “These payments also prevent a downward spiral of business closures that would likely occur if the FPUC program were abruptly terminated.”
Another factor, DeSantis said, is that workers have used the pandemic to reassess their careers.
âFrom wages to benefits, workers are reassessing their employment needs and priorities and changing occupations and industries accordingly,â said DeSantis. “Two-thirds of the unemployed plan to change jobs or look for a job in a sector different from the one in which they worked before the pandemic.”
This dynamic is compounded in some high profile industries, such as retail and hospitality, which has led to a perceived labor shortage.
âHowever, the evidence suggests that industries with comparable higher wages, strong career paths, and benefits, such as logistics and transportation, have in fact gained workers through the pandemic,â DeSantis said. âWhile some employers are offering wage increases, nominal hourly wage increases during the pandemic have not exceeded inflation. We are confident that as conditions improve, workers will be encouraged to return. “
In a survey she conducted in March, Prudential Financial has found that workers are ready to change employers after the pandemic if working conditions do not change.
The Pulse of the American Worker survey, which surveyed 2,000 full-time workers, reported that 87% of people working remotely during the pandemic want to continue doing so at least one day a week. Of those remote workers, 42% said they would look for another job if they were forced to return to the office.
“This indicates that a ‘war for talent’ could emerge if companies do not meet the needs of workers,” the report continued. “A significant number of respondents said they changed jobs during the pandemic (20%) or plan to look for a new job when the threat of the pandemic decreases (26%).”
Of those working for a new job, 80% say they are concerned about their career development, compared to 49% of all workers, and 72% are rethinking their skills.
Rob Falzon, vice president of Prudential, said in the report that an impending war for talent will be won by companies that assert their status as the destination of choice for current and future talent. These employers will cultivate cultures that reflect what is most important to workers, such as remote working options and flexible working arrangements, opportunities for career development and mobility, and comprehensive benefits.
âLeaders need to focus on developing thriving cultures of internal mobility, prioritizing lifelong learning and delivering strong benefits to support their employees,â said Falzon.