On May 10, an array of state business organizations, headlined by the Georgia Chamber of Commerce, released an op-ed titled, “Georgia’s Growing Labor Crisis,” bemoaning a “lack of available workforce” thanks to the $300 per week federal unemployment supplement.
Among the proposals advanced by the groups was an appeal to “Suspend additional federal unemployment benefits and direct available funds to a statewide job signing bonus program or other back-to-work initiative that helps match jobs to job seekers.”
Days later, Gov. Brian Kemp heeded the call. Effective June 26, an estimated 276,000 Georgians receiving jobless benefits will cease to receive the federal supplement.
Kemp’s move was the culmination of months of raging argument over the federally subsidized benefits. Critics charged the program incentivized workers to stay home, while backers maintain the extra cash is keeping millions of Americans from falling off a financial cliff.
Defending an anemic April jobs report at a May 7 press conference, Treasury Secretary Janet Yellen pushed back on the narrative.
“It’s clear that there are people who are not ready and able to go back into the labor force,” Yellen said. She went on to note that of the 266,000 jobs added nationwide in April, the strongest showings came in the leisure and hospitality industries — the sectors hit hardest by the pandemic.
The debate has found its way to Cobb, where business owners say, whatever the cause, it’s all they can do to assemble a skeleton crew of staff. The April 2021 unemployment rate sat at 3.2% in the county, down from 11.4% in April 2020. But labor is still hard to come by.
Lucrative job postings have become a routine sight, with previously unheard-of benefits and signing bonuses. The positions remain unfilled. The ‘HELP WANTED’ signs stay up and fade in the sun. Where, they wonder, have all the workers gone?
‘It can keep a lot of people on the sidelines’
Cobb Chamber Chairman John Loud has been hitting on the unemployment surplus for months. A consistent member of the chorus calling out the extra payments as a job-killer, he joked he was “dancing in the streets” when the news broke.
“There’s just so much relief … hopefully, folks can start to operate and deliver the services that as a company, they’re used to doing, that they’re just not able to do,” Loud said.
Loud pointed to U.S. Rep. Barry Loudermilk’s comments at a chamber luncheon in February, when the congressman called the unemployment supplement “a disaster” for small businesses.
“Three hundred dollars to somebody in New York, California, New Jersey, that $300 doesn’t make a difference,” Loud said, paraphrasing Loudermilk. “In Georgia and Alabama, and so forth, it makes a difference. It can keep a lot of people on the sidelines.”
Loudermilk himself introduced a bill in May to slash benefits at the federal level, and told Fox News, “it’s insanity that the government is paying people to be idle, instead of taking the millions of jobs that are available right now.”
Cobb Chamber CEO Sharon Mason did not directly respond to an inquiry concerning any such lobbying efforts by her organization, but wrote in an emailed statement, “We’ve heard from numerous Cobb business owners across many industries that they’ve been having difficulty finding workers and many businesses have shared this feedback with the Governor and his office.”
Democratic and labor leaders, meanwhile, were quick in their condemnation of the move. Georgia AFL-CIO President Charlie Flemming called it a “decision to economically coerce vulnerable, low-income Georgians into unsafe, underpaying jobs,” a take shared by State Rep. Erick Allen, D-Smyrna.
“I just find it very punitive … Let’s be real. What they’re saying is we’re having a shortage, we need to find something that forces enough pain on (workers) to go back into the workforce,” Allen said.
Allen went on to argue the picture isn’t as simple as Republicans and chambers of commerce have made it out to be. Parents, as one example, may still be struggling to find childcare for their kids, preventing them from taking a job immediately. And he questioned why Labor Commissioner Mark Butler has yet to reopen his department’s offices, even as the state returns to a semblance of normalcy.
“If you really want to open up Georgia, start by opening up the Department of Labor,” he said. “Why those offices are still closed is cowardice.”
Monica DeLancy, a tenants’ rights advocate in south Cobb and former candidate for the Board of Commissioners, said the extra benefits gave workers breathing room as they tried to find where they fit in an unstable economy.
“From our conversations with some community members, they really appreciated the extension of the unemployment benefits. It allowed for them to be able to find a career — not a job — a career that is in line with what they would like to do for the next 20 or 30 years. When you rush people off to these jobs, it just becomes short term,” DeLancy said.
‘We’re still getting nobody’
At the center of the workforce debate lies the restaurant industry. Throughout the spring, images circulated on social media of fast food restaurants with shuttered doors and signs in their windows blaming closures on a dearth of willing workers.
“If you’re asking me whether (the unemployment supplement) is keeping people from coming back to work, without a doubt,” said Gary Teague, proprietor of Johnnie MacCracken’s pub in downtown Marietta.
Teague says his bartenders were willing and able to come back on the job when coronavirus restrictions began easing up last summer. For them, it was simple — they made more money slinging drinks than collecting unemployment. In other departments, however, he’s struggled mightily to find reliable help.
“I have an ad going on the Giving Kitchen” — a non-profit which supports service workers — “starting pay, (with) no experience, $15 an hour. And we’re still getting nobody applying for it.”
A number of Teague’s workers have been working on a part-time basis, keeping their hours low enough to still collect benefits alongside their wages.
“You have a bunch of people right now that are working, still collecting (unemployment), and they’re working the minimum to get their unemployment,” Teague said. “But maybe the better question to ask me is, do I blame them? Hell no.”
“Having the unemployment last as long as it has, it’s just not incentivized people to come back out and work,” added Mike Schroeder of Acworth’s 1885 Grill.
The story was the same at The Battery Atlanta, where “Help Wanted” and “Now Hiring” signs peppered nearly every storefront. Joe Rose, general manager of Wahlburger’s, said this year is “the toughest … we’ve ever had, as far as trying to get staff.”
“We’ve actually resorted to using a temp agency to send us staff for game days,” Rose said. “I’ve already increased my wages from what they were before … I went up by about three dollars an hour, just to try to get people in here.”
Rose also laid the blame for the shortage squarely on the unemployment supplement, saying, “it’s for sure because of all the extra money that they’re giving out. I mean, why does anyone want to go to work when they’re getting whatever it is, $700, $800 dollars a week? Whatever they get, you know, why go work?”
“We have never had any issues hiring prior to COVID … and it’s not just a one off thing. Because like I said, you can go to every restaurant, everybody is understaffed. But the problem is, people are still coming. We’re busier than ever,” Rose added.
A service industry exodus?
Other restaurateurs aren’t so sure.
“We need more staff than before. We just don’t have them, just don’t see people coming, can’t find people to come to work … I don’t know what the reason is. They say it’s the unemployment—I don’t know. I don’t know,” said the Marietta Diner’s Gus Tselios.
Andre Gomez, who runs Smyrna’s Porch Light Cafe, has had to severely limit his service because he just can’t get enough employees.
“A lot of people say it’s the unemployment, the stimulus, but I also think … just in conversation, people are reevaluating what they want to do as well,” Gomez said.
One subscriber to that latter theory is Dale Hughes, who counts among his business interests The Nest in Kennesaw, Gabriel’s in Marietta, and Apotheos Coffee Roasters. The endless fretting in recent months over workforce supply, he says, has created a “general panic,” sending business owners into cutthroat competition with each other—not over prices, but wages.
“When everybody starts talking about the shortage of labor, they run their numbers up,” Hughes told the MDJ. “So warehouses say … we’re gonna pay you $20 an hour to come unload a truck, and it’s a lot easier than getting screamed at by a customer about your steak.”
Hughes regards the narrative that jobless benefits are keeping people at home as a myth. Service jobs, particularly tipped ones at locally owned businesses, just aren’t built to keep up with rising wages in other industries.
It may be time, Hughes said, for the industry to take a clear look in the mirror. He believes it’s time for the restaurant business to get serious about offering pay and benefits which not only can compete with other careers, but offer workers a secure and sustainable way of life.
“Why did it take a pandemic for me to fix this? That’s a really d--- good question,” he said. “I can guarantee this — I’m not going to do it this year, but we’re going to figure this out.”
Then there’s Sonya Grant, who says the issue is far harder to parse than many are letting on.
The WorkSource Cobb director said the unemployment supplement certainly contributed to a lack of available workers. But it’s one among many factors, including a lack of affordable housing, a nationwide shortage of skilled workers, persistently low wages, and a dearth of affordable childcare, which is “a huge issue.”
“(Workers) don’t want to go back to a low wage opportunity, and they don’t see a pathway, a career pathway, to higher wage job opportunities if they’re not able to get the training that they need,” Grant said.
WorkSource Cobb has been messaging its clients the approach DeLancy advocated — using the pandemic as a time to reevaluate career paths, and building skills to succeed long-term in the workplace. When it comes to the service sector, however, she’s not confident the industry can provide that security.
“We don’t work with a lot of restaurants for the most part,” Grant said. “We’ve far more focused on career pathways and economic mobility, and restaurants don’t typically provide those opportunities.”
Rolling back benefits, Grant said, could well be a “double-edged sword” for the state. While it may incentivize more people to look for work, they likely will end up back in low-wage jobs which can’t keep up with their needs. With a wave of evictions looming as moratoriums are set to expire this month, the intersecting crises could snowball to disastrous effect.
“I find it interesting that employers in our local area feel comfortable with paying such low wages, when they know that the population and the workers that you’re going to need will not be able to afford to live here,” she said.
Luckily, she’s seen some initial signs those trends are changing. In talks with the Cobb Chamber and the county’s larger employers, some businesses seem to be coming around to realizing they need to offer more.
“They’ve been forced to raise the wages within their company in order to obtain the talent that they need … and it’s unfortunate that it’s taken a pandemic, and a huge economic downturn, company closures, you name it, for employers to get there,” Grant said. “They can’t run a company without workers.”