“I’m still nervous that we’re bowing out of this program before the labor market is fully healed,” said Dietrich Vollrath, an economics professor at the University of Houston. “The bad consequences of doing too much is limited,” he said, “but the bad consequences of doing too little can really be detrimental.”
About 800,000 Texans were receiving federal jobless assistance at the end of April, according to the most recent data. Nearly half of them — the self-employed or other gig economy workers — will lose all of their benefits at the end of June, when the governor is ending the additional aid. The rest will see a steep drop in their weekly checks.
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While the Texas economy has largely rebounded from the height of the pandemic, when the unemployment rate topped 12 percent, companies across the state are still firing employees at two to three times the normal rate, according to Vollrath. He said that’s a sign the recovery remains fragile.
Labor experts already have some preliminary findings on the impacts of increased benefits during the pandemic. Economists at Yale University found that the $600 unemployment checks approved early on under the Trump administration did not significantly deter unemployed people from reentering the workforce.
Belinda Román, an assistant economics professor at St. Mary’s University, said ending the payments could backfire and instead drive people further into poverty. If it does work, she said, it may force at least some people into underpaid jobs that they have decided are no longer worth the time or health risk.
“My perspective is, pay better and that probably incentivizes a lot of people to come to work,” she said.
See here for the background. Those $600 checks also largely kept the economy from cratering a year ago. Taking away this benefit now, when the economy is still in recovery and lots of people are still not vaccinated and being cautious about going out, will mostly have the effect of making people who are already on the economic margins even poorer.
Also, too, there are other reasons why some businesses are having problems hiring.
Britt Philyaw, executive director of the Heard That Foundation, a Dallas non-profit that provides support for hospitality workers, said she doesn’t know of anyone who has turned down restaurant jobs to stay on unemployment.
“I find it really disturbing some of the things that I’ve seen on social media. I don’t like that the labor shortage is being politicized and how it is being said that people are lazy or they’re making more money on unemployment. I don’t think it’s the truth. The people we’ve worked with throughout the pandemic who were on unemployment and got their stimulus checks were not making ends meet,” she said.
What the pandemic did, in her opinion, was highlight the instability of restaurant jobs. The quirks of service industry work like tips and irregular schedules are often draws for many people in the industry, but they were cast in a different light when the pandemic hit, Philyaw said. Suddenly the things that were once perks of the business were no longer worth sacrificing health insurance, predictable pay and stability for.
“Something that is desperately lacking from the conversation is the fact that 70% of the population that works in the industry are women, some of them single with kids. I think that should be a huge part of the conversation,” Philyaw said.
The service industry labor market was already tight before the pandemic, and with even more jobs than there are workers, Philyaw said employees have the ability to be choosy about who they do go work for, which is making it even harder for employers, some of whom are offering sign-on bonuses and raising wages to attract new hires.
“People in front-of-house and back-of-house [of restaurants] are shopping around,” she said. “And they’re looking for things they value like, ‘Am I going to work in a safe environment? Am I going to work in an environment where I’m not going to be harassed or bullied or forced to work for free?’ So there’s just a lot of things at play, but I really don’t think it’s as simple as the stories that grab the most attention.”
For Andrea Winn, a long-time restaurant industry professional who’s held server, sommelier and wine director positions at Dallas restaurants like Bolsa and Abacus, the decision to leave the restaurant industry came when the downtown Dallas restaurant she was working at reopened over the summer and management did not adhere to capacity limits, mask mandates and other safety protocols.
She took a full-time job as a wine and beer buyer for Whole Foods, stepping away from the industry she loved and had worked in since completing her degree in history and getting out of a desk job she loathed. It wasn’t easy to leave the dining room — she was saying goodbye to higher pay, flexible hours and the ability to travel when she wanted — but the benefits outweighed the cons, she said.
“I have a job now [at Whole Foods] where I am guaranteed a certain amount of hours every week, I know how much I’m going to get paid, and I have health insurance and sick time. The sick time was a really big thing because working in restaurants, unless you are really sick, you are expected to work sick. You’re looked down upon, and your schedule will be threatened if you don’t [work],” Winn said.
There is a common perception that restaurant workers are young, uneducated and in the industry out of necessity, Winn said, and such thinking makes it easy to believe that the shortage of workers is due to an unwillingness to work. But the reality is the industry is made up of seasoned professionals like her who sought out restaurant and bar careers and are now choosing to pursue careers that offer a better quality of life, she said.
Some jobs are better than others. People who have kids at home and no child care available don’t have a lot of options right now. Making them desperate doesn’t seem like a good idea to me.