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Gov. Kemp pulls Georgia out of federal unemployment benefits, citing labor shortages
05132021 LABOR
Hiring signs are posted outside many retailers, including several lining the front of Kroger on Thompson Bridge Road in Gainesville on May 13, 2021. - photo by Shannon Casas

On Thursday, Gov. Brian Kemp joined the growing list of governors who are ending the $300 federal unemployment supplement that was a part of the American Rescue Plan, with Georgia opting out on June 26.

So far, the governors of Arkansas, Mississippi, Montana and South Carolina have said they will also cancel federal unemployment benefits in June, and Kemp said Thursday’s decision is a part of the state’s plan for reemployment and economic recovery to combat a statewide labor shortage.

With “help wanted” signs a frequent adornment on Gainesville businesses and retailers, Greater Hall Chamber of Commerce Vice President Tim Evans said that hiring managers have struggled to incentivize prospective workers.
“Businesses in the restaurant and hospitality industry that had really suffered during the pandemic are now scrambling to add staffing as customer business returns to some sense of normal,” said Evans. “We are hearing from hiring managers that they are competing with unemployment benefits to encourage people to work.”

A study released in March by the National Bureau of Economic Research found that a 10% increase in unemployment benefits during the pandemic led to a 3.6% drop in job applications.

Other factors being cited in the national labor shortage are a lack of child care and the fear of catching COVID.

The $300-a-week federal unemployment supplements were a part of a pandemic stimulus package passed by Congress earlier this year, and benefits run through Sept. 6.

Previously, the maximum unemployment benefit available to individuals in Georgia was $665 a week, or the equivalent of $17 per hour for 40 hours, through March 14. After that, the maximum weekly benefit for individuals is now $365 a week, or about $9 per hour.

Kemp said the state's regular unemployment maximum of $365 a week would still be available.

If a person turns down a suitable job, they could no longer receive the benefits.

The Gainesville-Hall County Metropolitan Area has the lowest unemployment rate in Georgia, hovering around 3%. However, Evans says the low unemployment numbers don’t tell the whole story.
“The data illustrates that in the spring of 2020, about 6,000 people left the workforce, for many different reasons, and they dropped out of the employed and the unemployment numbers,” Evans said. “Some of those people have since returned to the workforce, but as of the most recent information there are still several thousand that have not.”

State Rep. Matt Dubnik, R-Gainesville, told The Times that one reason for the disappearing workforce is how much unemployment benefits can incentivize people to stay home.

“The number one thing employers are telling me: their former employees are being paid more to sit at home than they are to come to work,” said Dubnik. “We have a record number of open jobs in Georgia. We are open for business. It’s time to get Georgians in the workforce.”

Sen. Butch Miller, R-Gainesville, also commended the governor’s move.

“As our federal government approaches $29 trillion in debt, President Biden and the federal government have turned their back on our local business owners desperately facing labor shortages by continuing to hand out taxpayers’ dollars in the form of needless unemployment benefits,” Miller said in a statement. “I applaud Gov. Kemp for standing up for Georgians and for Georgia businesses.”

Steve Collins, a Gainesville-based acupuncturist, said that the narrative that Americans are content to collect unemployment and not go to work is a false one.

“Restaurant workers who have seen diminished crowds and other workers who have been reduced to part-time are unable to make the paycheck that they were previously, through no fault of their own,” said Collins. “By using spurious arguments to justify what is ultimately an oppressive decision for many is reflective of the values of the current GOP party.”

Collins said that his Green Street business has begun to “pick up” in recent weeks, however, assistance is needed for all Georgia industries across the board. 

Georgia Department of Labor Commissioner Mark Butler said that the state has allocated $22 billion over the past 14 months for families affected by the pandemic.

“It is critical for us to support our economy and local businesses by providing solutions to the roadblocks many Georgians have faced when returning to work,” said Labor Commissioner Mark Butler. “Right now, the state has a historic number of jobs listed on Employ Georgia. We are seeing some of the highest pay scales with enhanced benefits and signing bonuses.”

According to the governor, over the next few weeks, state officials will provide resources for job search support, education and training opportunities, childcare and transportation services, and safe workplace initiatives for workers, families, and employers.

The Associated Press contributed to this report.

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