Bringing Americans back to work
Politics | Washington debates how to roll out more relief without disincentivizing labor
by Harvest Prude
Posted 7/09/20, 04:38 pm
WASHINGTON—Nicole Puerta works as a branch manager at Meador Staffing Services in Houston. For three years, she’s helped people get jobs. But she said the COVID-19 pandemic dealt a severe blow to temp agencies and the industry is just starting to recover.
“It just shocked us with how much business we lost,” Puerta said. “Our temps, our employees got laid off. And they couldn’t find another job; they kept calling us.”
For three months, from March to May, Puerta’s agency hardly had any work to offer.
Many employers are moving slowly to bring people back, but some employees are choosing not to work after Congress bolstered unemployment benefits by up to $600 per week as part of its economic rescue package.
“We’d call for a job and [the person] would tell us, ‘I make more with unemployment.’ We’ve heard that multiple times,” Puerta said, adding that other temp agencies have reported similar issues. “People said, I bet you can find many workers. Believe it or not, no, we’re having a hard time.”
U.S. employers added more than 7 million jobs in May and June, but 18 million Americans remain unemployed, according to the U.S. Department of Labor. The uptick in cases of the coronavirus in some parts of the country has increased pressure on Congress to proffer a legislative response. House Democrats approved a $3 trillion relief package in mid-May. Republicans called it untenable, citing the price tag and Democrats’ plan to extend the weekly $600 bump in unemployment benefits, which is set to expire at the end of the month.
GOP lawmakers maintain keeping the additional benefits will disincentivize people from going back to work. David Bahnsen, a financial analyst and adviser, said on The World and Everything in It extending unemployment benefits could “do incredible damage to the labor participation force. … That gives an economic incentive for people on the margin to not work.”
Curtis Dubay, an economist at the U.S. Chamber of Commerce, noted the service, travel, and retail industries may struggle to bounce back, and extra unemployment benefits could pose a problem.
“Many of the workers in these industries are receiving unemployment insurance greater than what they earned before COVID-19 hit,” Dubay wrote. “That creates a challenge to bring them back into the workforce.”
Senate Majority Leader Mitch McConnell, R-Ky., told reporters in Louisville that the Republicans are prioritizing something like a five-year coronavirus-related lawsuit shield for businesses, schools, and healthcare institutions. They want to whittle down unemployment and provide legal protection for entities that reopen and might have people get sick on their property.
“Unless you were grossly negligent or intentionally engaging in harmful conduct, you should be protected from liability during this process,” McConnell said.
Democrats say businesses should be held responsible for employee and customer safety and have resisted the calls for liability protection.
Melody Foster, a graphic designer in Indiana, lost her job in early April. She said the advertising firm she worked for wants to rehire her but can’t afford to right now.
“With other businesses struggling, there’s not as much advertising,” Foster said. “If other businesses don’t have the advertising dollars, there’s nothing really they can do about it.”
She said the generous unemployment insurance means she makes slightly more than when she worked, but she’s still eager to get back—especially since the extra benefits could expire soon: “A lot of people on the side of discontinuing the unemployment are really underestimating how hard hit a lot of companies are; they’re not ready to bring people back, so where are people going to go back to work?”
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