Sunshine Sentinel

Removing the extra $300-per-week in additional unemployment insurance (UI) benefits provided by the federal government is showing some early signs of motivating the COVID-driven unemployed into returning to work at pre-pandemic low wages.

Some, including at least one conservative economist, are cautioning that not everything as it seems.

The good news for those paying those low wages is their struggle to find people willing to return to those jobs might become less taxing - assuming the struggle was entirely caused by the additional $300 the unemployed had been receiving - as those benefits are withdrawn.

Gov. Ron DeSantis at the state budget signing earlier this month | twitter.com/GovRonDeSantis/

That struggle is quite real for those employers who also now face increased and pent-up customer demand as the pandemic continues to winds down. Not finding employees to meet that demand could force some businesses to close.

In late May, Florida became the 23rd state to prematurely end the federal government's $300 in additional UI benefits that got the nation's lowest paid workers through the worst of the pandemic.

"The jobs are there," Gov. Ron DeSantis told reporters shortly after the announcement about ending the additional UI benefits in the state. "We're proud of the fact that we've got a lot of economic momentum. Now we're transitioning from relief in the midst of a crisis to now having the more traditional re-employment outlook."

Florida, tied with North Carolina and Arizona for having the lowest UI payouts in the nation, will benefit from removal of the extra federal money to the state's unemployed, Dane Eagle Florida Department of Economic Opportunity Secretary said in a May 24 announcement.

"Florida's employers are also seeing employment growth, as more Floridians, including some who completely left the workforce, are now eagerly re-entering the workforce," Eagle said. "Transitioning away from this benefit will help meet the demands of small and large businesses who are ready to hire and expand their workforce."

Eagle and many others are going for the simpler message that the present labor shortage is caused mainly by people staying home to receive extra UI money but some argue that the reality is far more complex.

People want to return to work, according to results of a Ceridian/Harris Poll issued in March. That poll found that 83% of respondents want to return to in-person work "at some point," more than half feel isolated from colleagues and about a third of respondence who've been working remotely feel doing so has negatively impacted their career growth and their mental health.

The path back to work is complicated in part because what people - including those currently employed - are making isn't going so far as it did before the pandemic. Fox Business reported earlier on June 9, that real wages have declined since December, the month before President Biden took office in January, because of inflation whittling away at what people earn for the hours they work. 

Even those still working are making less because of inflation, Tyler Goodspeed, economist, Kleinheinz Fellow at the Hoover Institution at Stanford University and a former member of Trump's Council of Economic Advisors, told Fox Business.

"When we factor in inflation, we see that not only have real wages declined month-over-month for each of the past five months, but overall, since December, real wages have actually declined by 3%," Goodspeed said. "And so there are all these different explanations that we have for why the labor force has been declining. Labor force participation has been either stagnating or declining from the UI top-up, the fact that schools are still in hybrid or remote learning mode. The fact that there are still pandemic fears."

Still, pulling the additional $300 from the unemployed does seem to be motivating workers to return to the market. An analysis released by the online job site Indeed, released a few days after Florida announced withdrawal of the additional benefits, found that job searches jumped 5% on days each state announced it was pulling out of the federal programs. The increase, Indeed reported, was an average relative to national trends.

The jump didn't last, Indeed reported.

"This increase was temporary, vanishing by the eighth day after the announcement," Indeed said. "In the second week after the announcement, the state’s share of national clicks was no higher than it was during the late-April baseline."

Indeed's findings came a few weeks after results of a poll published by the Foundation for Government Accountability found that 73% of business owners surveyed said they were having a had difficulty finding people to hire the first part of this year. Almost 59% surveyed said they were having a "very difficult" time finding people to hire and 30% of respondents said they face a greater than 50% chance their business will have to close within the next year because they can't find enough employees to hire.

Almost 40% of respondents said their employees quit their job and collected UI benefits due to COVID-19, 65% said the additional $300 weekly UI bonus was making it more difficult to find people to hire and 65% supported allowing the bonus to expire in September, as scheduled.