COVID: Employers Hopeful End Of Federal Unemployment Benefits Will Bring Workers Back
SAN FRANCISCO (KPIX) -- More than two-million Californians have lost federal unemployment benefits that helped them stay afloat financially during the worst of the pandemic.
This weekend, a historic federal unemployment benefit, which amounted to an extra $300 a week, expired. It was once $600 a week before it ended last July.
"They're completely cut off as of the 4th," says Glenn Telega, a stagehand in the convention and entertainment industry.
The loss of federal unemployment benefits is likely to have a ripple effect throughout much of the economy as millions of Americans re-enter the workforce.
Telega says the convention and entertainment industry experienced early and sharp job losses in the early days of the pandemic. He says his unemployment benefits have run out well before his industry has fully recovered.
"I understood that when we opened up in the entertainment industry that it would be sporadic -- that it would be slow at times. So, I kind of stashed a little funds away," Telega said.
According to California's Economic Development Department, 2.2 million people in the state will completely lose their unemployment benefits. That includes gig workers and people who've been out of work longer than 26 weeks.
The overall impact analysts say is that millions of California will return to the job market -- some of necessity and others perhaps out of desperation.
"We'll see an increase in job seekers. There's no question that it will push people back into the job search process. But it's not the only factor. People have also been hesitant due to health concerns," says Michael Bernick, former California EDD Director.
Some business owners had been sharply critical of the extended benefits, accusing them of lessening the motivation for job seekers to return to work.
Analysts says the impact of the loss of benefits may take some time to be felt.
"To expect there to be a rush of applicants, I don't think that's going to happen. The 'Help Wanted' signs have been everywhere. My feeling is jobs have been available. There just hasn't been a willingness for people to go out and work," says Dan Holder, owner of Jack Holder's Restaurant in San Jose.
"We don't have that many people that come in and want to work," said 3 Bees Coffee House owner Rafat Haddad.
The coffee shop has survived three economic downturns in the 19 years it's been open, Haddad said, including the pandemic. But now he's struggling to find people who want to work. He's in need of 2 to 3 employees, and will need more when he reopens his second location located inside a library.
"I have a lot of business owners around that I talk to and they say the same thing, that people, they are not willing to work," Haddad said. "They're getting money from the government and they don't want to work."
In July, a record high of nearly half of small business owners reported to the National Federation of Independent Businesses that they could not find enough workers.
"We are seeing job openings rates that are off the chart," said Brookings Institution economist Wendy Edelberg. "Anybody who is having to hire workers right now is probably having a hard time."
Next door to Haddad's shop, two restaurants and one tea shop had "for hire" signs posted.
"For us, we used to talk to our employees, bring your friends and just spread the word and now they're even having a hard time telling other friends to come in and work," said Haddad.
Haddad hopes the end of the benefits will help him and his neighbors find people who want to earn a paycheck once again. He believes it'll help the economy.
"I'm hoping that's the case, and if it is the case and if I see more applicants, that will be the answer," Haddad said. "We want to get out of this pandemic."
Maria Medina contributed to this report.
