NORFOLK, Va. (WAVY) — On Saturday, several extra federal pandemic unemployment benefits came to an end.
Now, business owners are hoping it would mean the end of their staffing struggles.
For much of the summer, many pointed to the extra benefits as the reason for hiring troubles, especially in the hospitality industry.
So, how likely is it that discontinuing the extra $300 a week in unemployment will all of a sudden fill all those vacant positions?
Old Dominion University Economist Bob McNab said it’s “doubtful.”
“The real problem is people leaving the labor force. If you look where we started in the pandemic, there are less people looking for work, or working in Hampton Roads,” McNab said. “In other words, there are just not enough unemployed people to fix the labor problems in the region.”
As of last month, Virginia Beach tourism leaders estimated that there were more than 1,000 open positions at the city’s resort strip. Several restaurants chose to close over lack of help.
McNab said while some people could be forced back into work by unemployment funds drying up, there is proof as to why it won’t be the end-all solution.
Republican governors in some states halted the $300 federal enhancement weeks ago as businesses faced staff shortages, hoping it would make a difference.
“If we look at the states that cut expanded unemployment benefits and we compare them to the states that kept it, job growth was actually higher the last four months in the states the kept expanded unemployment benefits,” McNab said.
What McNab said he is really looking at is the return to in-person learning in public schools to see if more people jump back into the labor pool.
It is suspected many parents of younger age children have stayed home since virtual learning started in March 2020. Some of those workers likely took the pandemic as an opportunity to make a career change.
McNab said he believes getting more people in the United States vaccinated is what will give people the confidence to find work again.
A disappointing August jobs report is also being blamed on the rise of the delta variant.
Economists had projected about 735,000 jobs would be added to the economy in August, but only about 235,000 jobs were added to the economy last month, according to the U.S. Bureau of Labor Statistics.
President Joe Biden said that while the number of jobs added wasn’t what the country had been aiming for, not all numbers were negative. The federal unemployment rate dropped to 5.2% and the number of people applying for unemployment benefits was down in August.