Is it true no one wants to work anymore?
Unemployment insurance expansions expire on Labor Day
AMRHEINS RESTAURANT in South Boston recently posted a notice on its door advising would-be patrons that it was not to be held responsible for the sub-par dining experience awaiting them — that was the government’s fault.
“Amrheins Restaurant welcomes you,” the notice read. “Sadly, due to government handouts, no one wants to work anymore. Therefore, we are short staffed. Please be patient with the staff that did choose to come to work today, and remember to tip your server. They chose to show up to serve you!!”
The “government handouts” that have prompted the restaurant’s grumbling are unemployment insurance program expansions that Congress enacted first in 2020 and then again in 2021 as part of the nation’s COVID-19 recovery efforts. Those expansions increased the weekly amounts that unemployed workers receive (typically one-half of their average weekly wage) by $300 per week, extended the number of weeks that benefits can be collected, and brought into its fold some workers traditionally ineligible for unemployment insurance, like rideshare drivers. All the expansions will expire soon (on Labor Day, coincidentally), but for some businesses, pundits, and politicians, that’s not soon enough.
The president of the Retailers Association of Massachusetts, for example, has charged that the program is merely a scam benefitting lazy workers: “We have employers who just tried to hire back past employees who were laid off, and they turned down the job because there’s a whole lot of incentive to spend the summer at the beach. They’re happy at the beach, and they’re happy taking benefits until Labor Day.”
Republican gubernatorial candidate Geoff Diehl has also weighed in on the side of management. In doing so, he has put daylight between himself and Gov. Charlie Baker, who is one of only two Republican governors in the country who has not rejected this extra federal money (Vermont’s Phil Scott is the other). The 25 other GOP chief executives have renounced some or all of these supplemental benefits in recent weeks, in evident solidarity with the Republican members of Congress, all of whom voted in March of this year against extending them.
As one of these governors, Alabama’s Kay Ivey, declared in June, “Alabama is giving the federal government our 30-day notice that it’s time to get back to work.” Candidate Diehl has followed the GOP mainstream with a paternalistically condescending rationale: “We really need to get people, I think, back off the couch and back into the workforce. I think it’s going to make them feel better…”
Baker, by contrast, defended those same unemployed workers as “hardworking people” at the “lower end of the wage scale” who “continue to be out of work over the course of the pandemic” and are therefore deserving of continued help. (He might have added that the value of these extra benefits to the recipients — and to the Massachusetts economy where they will be spent — is in the range of $2 billion.)
So far, the states that have turned down these benefits have not seen the corresponding rise in employment they were expecting. Job gains in those states are not significantly different from the states in which the benefits have continued, confirming that the availability of the supplemental benefits is not more important than other factors – such as difficulties in securing child care or a fear of contracting the virus – influencing individual decisions about returning to work. One economist has concluded that rejecting benefits has been more harmful to the income of a state’s residents than it has been helpful to a state’s employment statistics, vindicating Baker’s position.
And now there’s another wildcard. The emergence of COVID-19’s Delta variant has upended all expectations. Suddenly, the smooth glidepath we hoped would end our long bumpy plane ride is no longer in view — even states with high vaccination rates may not be moving in the right direction quickly enough to overtake the virus.
The end of federal expanded benefits on Labor Day, the Century Foundation predicts, will affect more than 300,000 unemployed workers in Massachusetts, with most losing all their income. That’s the sixth highest total among the states and a number that’s more than the combined populations of Worcester and Cambridge.
Amrheins, which did not disclose the wages it pays its servers, may be eyeing the calendar with some relish. But the state is appropriately less enthusiastic. Labor and Workforce Development Secretary Roslin Acosta has recognized the vastness of the challenge – “never have we witnessed this number of people losing benefits in one fell swoop.”
Margaret Monsell, a former assistant attorney general and former general counsel to the state Senate Committee on Ways and Means, is an attorney practicing in the Boston area.