Louisiana business associations call on Governor to end federal unemployment aid

LOUISIANA – Businesses all over the country are having a tough time hiring back workers and its led to debates over ending the extra $300 in federal unemployment assistance.

Ten leading business groups in the state, from contractors to retailers, sent a letter to governor or John Bel Edwards urging him to make the cut.

“I don’t want to rush into this because what I can tell you is none of the states that have done it already are as dependent upon tourism to sustain their economy as we are and we know that tourism hasn’t come back to pre pandemic levels,” Edwards said.

The $300 weekly bonuses, added to the $247 dollars Louisiana issues, were part of the $1.9 trillion American Rescue Plan passed in March.

By executive action, a governor can opt out and that’s what 17 states, mainly Southern ones, have decided recently.

“There’s got to be a better way, even if some of those dollars are converted to incentive programs to bring those employees back, we’re open to any way possible to get them back in the workforce,” Stephen Waguespack, President of the Louisiana Association of Business and Industry, one of the groups on the letter said.

Waguespack points out there is a proposal awaiting debate on state house floor that would trade $1,000 dollars to get back to work in exchange for the right to claim jobless benefits for six months.

“Many of these small businesses and hospitality industries looking for employees, they’re promoting higher wages than ever before,” Waguespack said.

Waguespack argues the aid was needed at first but now, the only thing preventing businesses from opening is not having the workers to do so.

He says the state’s added requirement to prove that you are actively applying for jobs has led to influxes of applications, but never an answer when the employer reaches out.

“If too many months go by, we’re worried those businesses won’t make it and then those employees won’t have anywhere left to go when the enhanced unemployment runs out,” Waguespack said.

While Patrick Button, a Tulane economist, agrees small businesses smacked by the pandemic do need workers to get back on their feet, he feels that taking away the extra aid won’t make a dent in the hiring issue.

He believes aid should be given directly to small businesses for hiring because there are recent studies coming out of Yale and UPenn showing the extra benefits aren’t why many aren’t returning to work.

“There is a lot of transition, because the economy is recently reopening, so we’re seeing some sort of growing pains here and it seems like workers have a lot of barriers to be able to work,” Button said.

Button points out the pandemic isn’t over yet and people still have health concerns. Also women, who have lost the most jobs over the past year, have dropped out of the workforce to care for children and elders. He says employers will have to be flexible moving forward.

“I think this is something that’s going to resolve over time on its own and removing those extended benefits is going to significantly exacerbate poverty for a lot of people who are depending on those right now who aren’t able to get back to work due to those barriers,” Button said.

Button adds that he believes taking away the aid will lead to less spending, another negative reaction for the economy.

Nationally, McDonald’s, Amazon, Chipotle, Walmart and Costco have boosted wages, in some cases to $15 an hour or higher.

The extra $300 dollars a week in federal assistance runs out September 6.