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Do more workers apply for jobs when enhanced unemployment benefits end?

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Posted at 1:01 PM, Jul 23, 2021
and last updated 2021-07-23 16:01:21-04

COLUMBUS, Ohio — We aren't breaking any news by telling you that restaurant owners have struggled over the course of the last year and a half.

Health orders first shut them down and when they re-opened, finding the staff became challenging.

"A lot of those more senior servers did not come back," Nick Taylor, the General Manager at Oscars restaurant in Dublin, Ohio said during a recent interview.

Similar beliefs are shared by Bob Szuter, who owns Wolf's Ridge Brewery in downtown Columbus, Ohio.

"Right now we can’t open for two of the days that we normally would be," Szuter said.

You might not live here. But there is a good chance restaurant owners and small businesses near you feel the exact same way.

In June, job openings nationwide were at 9.2 million. A new record.

Many restaurant and brewery owners are having to resort to something many have never done before: sign-on bonuses.

"$250 bucks for a cook and we’ve paid those," Szuter said.

WHAT IS THE REASON?

For months, the complaint from many conservative leaders is that Congress is giving workers too much money.

Since the pandemic began, $3,200 in stimulus checks have been handed out.

Additionally, $300 weekly enhanced unemployment benefits are being distributed until early September for those states who opt-in.

Not to mention, monthly child tax credit payments are going out to workers with child dependents for the rest of the year.

Nationwide, many Republican governors concluded those $300/week bonus unemployment benefits were to blame for low numbers of job applicants.

So far, 26 states have either ended the bonus cash before the federal end date or attempted to end them before a lawsuit was filed.

IMPACT OF ENDING BENEFITS

Is cutting the enhanced benefits actually bringing people back to work?

Well, the answer depends on who ask.

Both Taylor and Szuter work in a state where those bonus benefits ended nearly a month ago.

"Prior to that, I would say I would post an advertisement and get 1-2 responses now I get 4 a day, so I think people are coming back to work," Taylor said.

Szuter however disagrees.

"We never bought into that and didn’t expect a flood of resumes, and we haven’t seen that," Szuter said.

"Right now we could absolutely hire five people in the kitchen," Szuter said.

He says many of his most dependable employees have simply moved on, using the extra cash and time off to gain new skills.

"One cook that did work for us is working in an auto repair shop making a lot more money," Szuter said.

Economists from Oxford Economics and Goldman Sachs have found only a “marginal effect” of ending these unemployment benefits early, although the benefits haven't been suspended in many states for a long period of time.

However, the lack of data suggests the labor market may be a bit more complex than before.

"It’s changing the demographics of the workplace," Roger Geiger with the National Federation of Independent Business said.

Geiger represents small businesses across Ohio and he says companies that have created more work-from-home opportunities have likely hurt businesses that need workers to report in person.

"You gotta have people at that restaurant, at the car wash," Geiger said.

"Part of it is people have child care issues. People have their own personal concerns about where they are in the pandemic," Geiger added.

As the economy attempts to rebound, many people, including President Joe Biden, have suggested the issue is workers aren't being paid enough.

However, Taylor and Szuter say there are limits for how much they can afford to pay employees.

"I don’t want to be the restaurant that charges 40 dollars for a steak," Taylor said.

"Trying to start an economy from a coma is tough," Szuter added.