By WIN GRUENING
Thanks to supplemental Federal unemployment benefits ending last month, Alaska workers, like those in many other states are finally getting back to work. Republican officials across the country have long claimed that generous unemployment benefits were a disincentive for returning to jobs.
In what has become a national trend, many Alaska business owners have not been able to fill open positions.
In a recent ADN article, Misty Stoddard, an owner at Rain Proof Roofing in Anchorage said she wasn’t getting many applications. Some people have told her they’d prefer to continue collecting unemployment benefits.
Many business owners in the local hospitality industry have similar stories to tell. Trina Johnson, owner of La Mex restaurant in South Anchorage, said she’s had trouble finding workers.
A record-high 48% of small business owners in the U. S. reported unfilled openings in May, according to the National Federation of Independent Business. Alaska’s reliance on the visitor industry has disproportionately affected our state as restaurant owners, tourism related businesses, and their suppliers are experiencing a growing labor shortage as the economy tries to recover.
In many cases, the $300-a-week benefit, which was reduced from the $600-a-week payment authorized under the original CARES Act last March, meant that many unemployed workers were earning the same or more by not working. According to the Center on Budget and Policy Priorities, based on a 40-hour work week, the average unemployed American was getting the equivalent of $17.17 an hour – more than twice the Federal minimum wage. In 21 states, unemployed households could potentially earn the equivalent of $25/hour while not working.
In March 2021, there were 31,841 Alaskans collecting state unemployment benefits, over three times the number collecting unemployment benefits a year earlier. Yet, the Dunleavy administration had been hearing from employers for some time that a growing labor shortage was preventing businesses from fully re-opening as pandemic related precautions eased. According to Alaska Commissioner of Labor, Tamika Ledbetter, the state’s available-jobs database had more openings than the number of people on unemployment. Based on that information, on May 14, Gov. Dunleavy made the decision to discontinue the Federal supplemental payment beginning in June.
In doing so, Alaska joined 17 other states that announced they planned to end the special Federal benefit. A week later, at least 25 states, including Alaska —all with Republican governors—had announced similar plans. Some states even decided to offer bonuses to employees that returned to work. “In Arizona, we’re going to….encourage people to work…instead of paying people not to work,” Governor Doug Ducey said announcing Arizona would be offering one-time bonuses to returning workers.
Dunleavy’s action was praised by Republican officials and many private sector business leaders. Some Democratic lawmakers, UAA economists, and labor unions disputed that the higher unemployment payments discouraged people from work and criticized the cut.
However, evidence has continued to mount since then that ending the benefit has positively affected many states across the country, including Alaska.
Recently released U. S. Labor Department data on unemployment claims reflect welfare rolls expanding in the states where the unemployment bonus remains in place. Conversely, the number of people on welfare is shrinking in the states where the supplement expired.
States that announced an end to enhanced federal unemployment benefits in June saw a 13.8 percent drop in residents receiving benefits from mid-May through June 12, according to an analysis by Jefferies LLC. States announcing an end to the federal unemployment in July saw a 10 percent decline in residents receiving state benefits. Meanwhile, some studies show states that continued the bonus posting increases in initial claims.
In Alaska, total unemployment claims dropped from nearly 30,000 the week before the extra federal benefit ended to just under 26,000 in late June, according to state data. They peaked at more than 66,500 a year ago.
As visitor numbers begin to increase across the state, it is critical that Alaska businesses are able to staff up to meet the demand.
Thanks to Governor Dunleavy, one more impediment to accomplishing that has been removed.
After retiring as the senior vice president in charge of business banking for Key Bank in Alaska, Win Gruening began writing op-eds for local and statewide media. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is involved in various local and statewide organizations and currently serves on the board of the Alaska Policy Forum.
Given how myself and other business owners I know cannot find employees this is a surprising article. We expected a surge in applications after the June deadline. That has not happened to date.
Some businesses I know have shortened hours in order so as not burn out the dedicated people who have continued to work. The Government definitely made small business difficult by throwing money at a problem.
In fairness, a part of the problem is we, the worker bees of Alaska, are gun shy. We keep waiting for the local assembly to lock down businesses again.
Once things actually stabilize people may be more willing to come back to work. But we gotta know we’re not gonna start just to be turned away again.
Plus, much as I hate to agree with Biden on anything, wages may have to go up to get the people you want.
And so long as the government provides a free ride, with borrowed money, there is no reason to get a job. Wages go up, prices go up, buying power remains the same or goes down. Who shall not work shall not eat. Lenin and the bible agree.
Now that the government is handing out advanced child tax credit payments, the employee problem will not be solved until this government hand out ends. It will end in December providing the Democrats don’t do something stupid, like extending it. I will not go out to eat, figuring that the restaurants are hurting for employees and I will not add to their stress. I feel for all small businesses trying to hire in this socialist environment.
Those who do not work shall not eat. Times may be easy now on the dole, but the fools who think that they can forever live by the labors of others will one day face hard reality, and deserve no compassion.
If you think that a one time, single payment of $250 or $300 is whats preventing people from going back to work then you are part of the problem. Demonizing the unemployed as if $300 is alot of money or something. How out of touch with reality are some people?
Given I have watched people quit one job and move to another over $300 more pay a month, I would say you are out of touch. If a person has no skills and would normally make $12 an hour and they are making $17 or more an hour to stay home, why would they take a job? Maybe you are the type of person that believes in hard work, but a lot of people do not. Go outside and touch some grass.
“Go outside and touch some grass.” -thank you for that. I needed a bonafide LOL today
It does not prevent but it disincentives. Take the free money, plus SNAP and other programs, food bank and everything else on the public dole and too many find it too easy to free load. So long as help wanted signs hang, people should not be paid for idleness. I believe in the public good, but service should be required of those collecting.
Just in time for Juneau to start locking down again.
Alaska: the state that can’t.
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