There’s a worker shortage, it’s time for enhanced unemployment benefits to end
By Matthew Gagnon
Wednesday morning I spoke with the manager of a local business who was in an absolutely desperate situation: He needs people to come to work, and he can’t find anyone.
This is a critical time for Maine businesses. Mask mandates are being eliminated, and life is returning to something resembling what it looked like prior to the pandemic. As this happens, there is a tremendous amount of pent-up demand, so people will be going out to eat, traveling more, and returning to venues — like beaches, waterparks, and sporting events — that they avoided last year.
Businesses are finally in a position to start earning again. Now is their chance. And yet, attempts to hire people to meet that opportunity are proving unsuccessful.
Take Funtown Splashtown — the largest employer of seasonal workers in Maine — for instance. Their facility used to be open seven days a week through the peak of the summer season, but they recently announced that they will only be open five days a week this year.
“The abundance of jobs needing to be filled as businesses attempt to reopen after the COVID Summer of 2020, and the lack of willing applicants, has made staffing far more of an issue than it ever has been in the past,” said park officials.
In order to sweeten the pot, Funtown has decided to offer incentives. They have raised their wages significantly — well above the state’s minimum wage — and are offering several season passes to anyone hired.
Not good enough, it seems, because the park will be closed on Mondays and Tuesdays.
This is a phenomenon seen in many other businesses and industries as well.
Summer camps are struggling mightily with finding people right now. Tom Doherty, the executive director of Ketcha Outdoors recently told WGME that while they usually have a staff of around 100 to 120, they currently sit at 38 people and are only likely to staff up to around 60 or 70 people this summer.
Restaurants, too, are feeling the pinch. The Bangor Daily News ran a story earlier this week highlighting the difficulty the food service industry is having with regard to employment, highlighting the fact that increased pay incentives are simply not enough to lure back many lapsed workers. Estimates show that the hospitality industry, broadly speaking, is roughly 16,000 employees short of what they need.
This labor crunch in Maine is happening elsewhere, too. According to the U.S. Bureau of Labor Statistics, roughly 8.1 million jobs were open and unfilled at the end of March.
The reasons for this are complex. Some of it is due to changing worker priorities and options post-pandemic, and some of it is from the difficulty in getting international J-1 student visas, given the near impossibility of most international travel today.
But contrary to some critics who would like to pretend that it isn’t a major consideration, the fact that the $300-a-week “enhanced” federal unemployment benefit still exists does also matter to employment decisions. We certainly saw that last year when the benefit was $600, and we’re still seeing it now, which is why an increasing number of states, including our neighbors in New Hampshire, are deciding to opt-out of the program and return their systems to normal.
The original debates over the inclusion of the extra benefit all circulated around the unprecedented loss of jobs and economic contraction that we experienced due to the pandemic. Proponents said that acquiring a job was so difficult for the unemployed that an additional benefit was necessary.
That may have been true at the time, but I think we can all agree that this is no longer the case. Look anywhere, and jobs are available just waiting to be taken, and in many cases businesses are literally begging people to simply show up.
Given that context, it is time that Maine follows the lead of so many other states in rejecting those federal dollars, and returning our unemployment system to normal.
Gagnon of Yarmouth is the chief executive officer of the Maine Policy Institute, a free market policy think tank based in Portland.