Pritzker Won’t Cut Enhanced COVID Unemployment Benefits As Employers Claim Workforce Shortage
Unemployed Illinoisans will keep receiving an extra $300 in pandemic-enhanced weekly benefits, Gov. JB Pritzker said Wednesday, even as Republican-led states around the nation move to end those benefits early, claiming they’re disincentivizing working-age people from getting jobs.
“Our job here is to make sure we’re creating jobs and helping people to rebuild the lives they had before the pandemic, and so we’re not going to pull the rug out from under people,” Pritzker told reporters at an unrelated event Wednesday.
The governor’s comments came a few hours before one of the state’s leading business groups representing employers sent Pritzker a letter asking for an early end to the boosted unemployment benefits, which are set to expire Sept. 6.
In his letter, Illinois Manufacturers’ Association President and CEO Mark Denzler cited data from the state’s Department of Employment Security showing approximately 358,800 fewer Illinoisans in the state’s workforce in March versus March 2020, when the pandemic began. Denzler attributes this labor shortage to the extra $300 in weekly COVID unemployment benefits, which means an individual with no dependents in Illinois can receive the equivalent of more than $19 an hour.
“We simply cannot allow able-bodied workers to remain on the sidelines when there are hundreds of thousands of jobs available,” Denzler wrote. “While the added federal benefits clearly served a purpose…Illinois’ economy will not fully return to normal when conditions favor a refusal to return to work.”
A growing number of states with Republican governors have announced they will no longer accept the federal COVID unemployment funds for enhanced benefits. This comes on the heels of a disappointing jobs report earlier this month revealing the American economy only added 266,000 jobs in April, despite forecasts the number might be 1 million or more.
President Joe Biden, however, is rejecting that argument, saying Monday that “Americans want to work.”
"I know there's been a lot of discussion since Friday's report that people are being paid to stay home, rather than go to work," Biden said. "We don't see much evidence of that…I think the people claiming Americans won’t work even if they find a good and fair opportunity underestimate the American people.”
The federal CARES Act Congress passed in the early weeks of the pandemic last year provided for enhanced COVID unemployment benefits to the tune of $600 extra per week. But that benefit ended in late July. In December, a $900 billion stimulus plan provided for 11 more weeks of enhanced unemployment benefits for $300 extra per week, but the American Rescue Plan Biden signed in March extended those benefits until September.
But the president Monday also said the federal government would “make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits.”
Since early on during the pandemic, Illinoisans seeking unemployment benefits haven’t had to adhere to the state’s usual requirement that they must be actively seeking full-time work. Pritzker last year issued an executive order waiving that requirement, and Denzler told NPR Illinois the waiver was necessary when many businesses were shut down for the first several months of the pandemic and workers suffered mass layoffs, and was still reasonable as the economy stalled as COVID wore on.
But now that more than 57% Illinois’ population 16 and over have gotten at least one dose of COVID-19 vaccine and businesses are desperate to hire workers, Denzler said it’s time to end that exception.
Not all economists and researchers, however, agree with Denzler and the Republican governors’ thesis that unemployment benefits are disincentivizing people from returning to work.
Beth Gutelius, research director of the Center for Urban Economic Development at the University of Illinois - Chicago, said the argument about generous unemployment benefits preventing people from getting jobs is “thinly veiled” sentiment similar to long-debunked theories that individuals on welfare are “lazy.”
Gutelius, who has spent years researching warehouse workers in particular, says people are running up against long-running systemic problems in the American economy. Gutelius told NPR Illinois she believes workers from all backgrounds in recent years — but especially during the pandemic — have opened their eyes to three issues: jobs that offer wages so low they’re unlivable, lack of affordable childcare and lack of paid leave at many jobs, especially low-wage employment.
Those three issues aren’t just theoretical problems, Gutelius said; they’re real barriers to getting people back to work — especially people of color and women. Early reports on pandemic-related job losses found women and minorities bore the brunt of layoffs and unemployment, and as COVID has dragged on, economists have predicted permanent exits from the workforce for many women, attributed to lack of childcare as schools and daycares shuttered.
“We cannot just blame individuals when, in the end, there’s not the infrastructure necessary, especially for women and low-wage workers and people of color to reenter [the workforce],” Gutelius said. “What are you going to with your children if you aren’t making enough at your job to pay for childcare? It’s a mathematical question. It’s not about desire to work or not.”
And while more than a quarter of Illinoisans are now vaccinated against COVID, Gutelius says health and safety are still on workers’ minds.
“It almost goes without saying: we’re still in a pandemic,” she said, adding that by September when the enhanced unemployment benefits are set to expire, Illinois could be closer to herd immunity.
But the state is heading to a full economic reopening in less than a month, according to Pritzker’s reading of Illinois’ current COVID metrics. And Denzler’s letter points that out, saying employers are facing a “crisis” without workers willing to go back to jobs.
Denzler said he’s hearing from businesses willing to pay more than $25 per hour, but with little success hiring. As long as people are receiving enhanced unemployment benefits, he said, Illinois would continue to face a “severe workforce shortage.”
Gutelius, however, says employers claiming there’s a “workforce shortage” often obscures something else in the labor market.
“For the last 12 years that I’ve been doing interviews with warehouse employers, almost every single one will tell me there’s a worker shortage, no matter what the labor market looks like, disregarding the fact that wages have actually dropped in that industry over the last 12 years,” she said.
Raising wages and job quality would go a long way toward incentivizing people to return to work.
But Denzler said if wages and job quality were the only barrier, rather than the availability of enhanced unemployment benefits, Illinois wouldn’t have thousands of high-paying manufacturing jobs open — jobs that on average pay about $80,000 per year in wages and benefits, and 92% of which come with employer-sponsored healthcare, he said. Many employers in the manufacturing sector are also willing to give new employees on-the-job training, Denzler said.
But Denzler conceded the industry might be up against long-standing notions about what manufacturing is, and who works those jobs.
“There’s always been a perception problem that manufacturing is dirty and dangerous,” Denzler said. “It’s not — it’s clean and high-tech and diverse and sustainable…[The perception issue is] a systemic problem we have to address.”