by Timothy McQuiston, Vermont Business Magazine This week marks the last full week of the federal pandemic unemployment benefits. The benefits extended regular UI payments, included “gig” workers with the PUA (Pandemic Unemployment Assistance) program and added $300 a week to all claimants who lost work because COVID-19.
Whether workers coming off unemployment will help fill holes in the workforce was a question before the Delta variant hit in early July. Now there is evidence that Delta is indeed keeping workers away.
Even as the economy has significantly rebounded, the federal pandemic program with that $300 stipend is still putting about $4.3 million a week into the Vermont economy on top of UI benefits. In vermont, the last of the payments will be distributed based on the week ending September 4.
In the most recent weekly unemployment report issued by the Vermont Department of Labor for the week of August 28, there were 341 new regular UI claims. This is a relatively low number typical of summer before the pandemic. This is an increase of 92 claims from the week before and 408 fewer than the same time last year.
The total new and continuing claims reveal the COVID impact.
Last week there were a total of 5,011 claims, up 215 from the week before but 22,708 fewer than last year. Including the new UI categories created specifically in response to the pandemic, there were a total of 14,215 claims last week, which is 26,357 fewer than last year.
Once the federal pandemic programs end and payments cease in about a week, another 9,204 claimants will be removed from the UI rolls. This includes the popular PUA program with 5,851 currently enrolled (see data tables below.). In all, about 3.2 million Americans will lose benefits.
Claimants will collect their final CARES Act benefits the week of September 5-10, when they file their weekly claim – for those in PUA and PEUC, this will be their last weekly claim.
“The federal CARES Act programs played an important role in providing temporary assistance to make sure Vermont workers were supported during a time of great uncertainty throughout the last seventeen months” said Commissioner Michael Harrington in August. “Since March 2020, the Department has issued over 2.3 million unique benefit payments to more than 100,000 Vermonters totaling over $1.7 billion.”
Those individuals on regular UI will continue to collect benefits as they are eligible under regular unemployment, but they will no longer see the FPUC supplement.
Employers are hoping that once workers come off UI they will return to the workplace. The evidence from states that chose to end the federal pandemic assistance early does not indicate that workers will necessarily return to those jobs most needed, as in restaurants.
For instance, Missouri ended their benefits at the end of June, but workers did not flood back to those jobs. The Show Me state gave up an estimated $750 million in projected federal, taxable benefits when it closed down the pandemic program.
Nationally, there is a worker shortage. It is acute in Vermont. Many states, like Vermont, are looking for new Americans, including the recent evacuation of refugees from Afghanistan.
COVID also largely stopped immigration, cross-border workers and college students from alleviating the worker shortage. The Canadian border could fully open September 21. The deadline has been put off twice so far because of the Delta variant.
Vermont has a relatively high number of college students. UVM and Bennington College are reporting their largest freshman classes in their history. Middlebury students left campus when COVID hit in the spring of 2020 and are now back.
Governor Scott has said he hopes that between the high vaccine rates, the return of college students and the end of the federal program that there will be some relief for employers, especially in the service industry.
Scott has acknowledged that all that will not solve the worker shortage in Vermont, which he has repeatedly point out was a big problem before the pandemic. He also is aware that workers in those hard-hit industries might simply not want to go back to those jobs, or will seek a career change.
There is some concern that the COVID-19 Delta variant could further keep workers away concerned for their health as it could also keep businesses at lower capacity, as potential customers once again play it safe.
The state has implemented programs to help people change careers.
A free course program through UVM and CCV were quickly snatched up. Upskill Vermont Scholarship Program was launched July 13 with the goal of enrolling 500 Vermont residents through the Fall 2021 and Spring 2022 semesters. All the slots were filled by the end of the first week the program was open.
The worker relocation program to bring new workers to Vermont also was recently launched.
The Vermont unemployment rate for July was 3.0 percent, near the very low pre-pandemic level, but the labor force has not bounced back and is still 8,500 workers less than July 2020.
“As these federal programs end, we know we have more work to do. The Department, and especially our Workforce Development team, are already connecting with claimants and employers to help people get back into the workforce and minimize the impact of this change in benefits”, said Harrington.
The Department has continued to connect with unemployment insurance claimants through direct email and phone outreach to provide information on how the end of federal benefits will impact them, as well as what workforce development support services are available to assist them with re-employment.
Workforce Development team members are located at Job Centers now open for expanded hours across the state and are available for both virtual and in-person career consultations.
Local career specialists can assist jobseekers in finding career and training opportunities, as well as employers looking for talent through job promotion, hiring events, and applicant referrals.
Local and statewide teams continue to hold weekly virtual workshops and events, including sessions on resume writing, re-employment strategies, and virtual job fairs. Learn more at Labor.Vermont.gov/Jobs.
The Federal Pandemic Unemployment Compensation (FPUC) program provides $300 per week in extra pandemic-related unemployment benefits to unemployed and underemployed workers through state unemployment agencies.
States had to opt-in to the program and could then opt out. Vermont has taken full advantage of the program. Governor Scott, however, previously said he would not extend it beyond September 4 because of the persistent worker shortage, even if Congress were to extend the program, which they have not.
The August US Jobs Report is out, and reveals the slowest monthly job gains of the year. According to CNBC, the economy added just 235,000 jobs in August, far below the expected 720,000 positions and a fraction of the nearly 1 million added in July.
The revised August report also suggested a faster growing economy in June and July than previously believed.
The Delta variant is at least partly to blame for the now August downturn, according to economists.
Dr. Michael Hicks, Director of the Center for Business and Economic Research at Ball State University in Muncie, IN, said, “the re-emergence of COVID-19 dealt a heavy blow” to August’s jobs numbers.
Here are more of Dr Hicks’ takeaways from the August Jobs Report:
• Job growth was clustered in the production of motor vehicle parts (24,100), transportation and warehousing (53,200), information services (17,000), professional and technical services (58,200), educational services (40,200), arts, entertainment and recreation, (35,500), amusements, recreation and gambling (30,000), personal and laundry services (19,200) and local government (19,6000).
• Major job losses were clustered in food services and drinking places (-41,500), Accommodation (-34,900), retail trade (-28,500) and food and beverage stores (-23,200).
• Wage gains were solid, with the largest increases occurring in professional and businesses services, education and healthcare and non-durable goods manufacturing. Wage growth in the hospitality sector slowed markedly from previous months.
• The shift of employment and wage growth from high contact sectors (restaurants, hotels and retail settings), combing with rapidly slowing wage gains in these sectors reflect the increasing spread of COVID-19 across much of the nation.
• State level employment reports will tell a clearer picture in the coming weeks, but it was apparent in July’s jobs report that vaccination rates played a significant role in slowing job growth across the nation. It is likely that the return of COVID will decrease both supply and demand for labor in those places where it is most severe.