After a protracted battle, Florida Governor Ron DeSantis says no more additional unemployment benefits
On Monday, Florida became the 23rd state in America to get rid of the extended unemployment benefits. The additional benefits were provided by the federal government to all Americans beginning with the CARES act in the Spring of 2020, and they were subsequently extended several times, both by Donald Trump and Joe Biden, in December and March.
The additional benefits were $300 per week paid by the Federal Government, which was paid on top of the Florida state unemployment, which has a maximum of $275 per week.
Florida Governor Ron DeSantis is responding to frustrated employers who claim that they're having a hard time filling the employment vacancies at their establishments and who believe that the federal unemployment extension may be the reason why.
Over the past few months, an internet debate has emerged with employers posting photos of hand-made signs at various businesses that are claiming to be too understaffed to serve their clientele.
Anyone who's spent 5 minutes in a Florida Facebook group in the last few weeks has likely seen the fighting, with many business owners on the one side saying that unemployment benefits are hurting their ability to acquire the labor they need to function.
On the other side, employees are saying that the jobs available in those industries aren't enough to pay the bills and thus they won't even consider working there. Similarly, some business owners have also chimed in on this side of the debate, saying that businesses who've opted to pay their workers more haven't experienced the same problems.
But now, the debate has been settled by the Florida Governor as the State of Florida will end its participation in Federal Pandemic Unemployment Compensation on June 27th.
But will this really solve the problem? Some think not.
For starters, the unemployment rate is already lower than pre-pandemic levels, with 6% of the Florida population unemployed currently. And the seasonally adjusted unemployment rate was only 4.8% for April of 2021. The fact is, there really aren't that many people collecting unemployment at the moment compared to our state's history.
In April of 2011, for instance, the unemployment rate was at about 10%.
In 2015, it was at 6%.
This alludes to the fact that the problem might be multi-faceted; instead of being one singular problem, it might be many different problems coming together as the pandemic finally begins to let up and we finally get back to normal.
Over the past year, since April of 2020, Florida has gained 766,000 jobs, a rise of 9.8%. So there are more jobs today than there were a year ago when everything shut down.
And just as The Economist notes:
There are three potential explanations for the puzzling shortages: over-generous benefits; fearful workers; and a reallocation of labour between industries.
They go on to explain that of these three explanations, unemployment benefits have shown the weakest relationship to the difficulties businesses face finding workers. Where historically, unemployment and a lack of workers have gone hand-in-hand, this seems to have broken down over the course of the pandemic.
There are also fearful workers who are afraid of getting sick. This is especially true for industries like restaurants, retail, and hospitality, places where workers have to engage with the public a lot. This should work itself out as more and more people get vaccinated.
The last one, the reallocation of labor, is something few of us have really thought about. As The Economist further said:
Analysis by The Economist of over 400 local areas also finds a wide variation in job churn across geographies: the gap between jobs growth in the most buoyant areas and that in struggling ones is twice as wide as it was before the pandemic. Workers may take time to catch up with this creative destruction. A former bartender looking for work in downtown Manhattan, for instance, may not quickly spot and secure a position as a delivery driver in farther-out Westchester.
In other words, coming out of this thing may take some time, as it may take a while for workers to find the positions available to them. Someone living in Downtown Orlando might not be looking for work in Sanford; someone living in Miami might not be looking for work in a nearby suburb.
Someone who used to work in live entertainment might not have that same job available to them, for instance, if their company shut down, and now they have to begin to process of finding a new field or a new company. If someone's restaurant closed, it may take them time to adjust to the idea of becoming a housekeeper at a hotel.
These things take time and effort.
Nonetheless, the pandemic is almost over, and it sure feels good to see Florida finally starting to get back to normal.