The pandemic has changed so much in our world, including a variety of legislation and the job market. We put together a few updates on where pandemic recovery benefits stand and current stats on the workforce.
The eviction moratorium had been extended to October 3, 2021. However, the Supreme Court struck it down on August 27th. With an estimated 3.5 million people at risk of losing their homes, many cities and states are looking into extending their own moratoriums with this court ruling.
The moratorium was enacted by the CDC to prevent landlords from evicting their tenants for a specified period; however, rent payments may continue to accrue as late. It was extended as of August 3rd.
Rental assistance has been provided to help landlords and tenants who are unable to pay rent due to the pandemic. This program provides $46 billion for those in need as well as $5 billion for emergency housing vouchers for people experiencing homelessness, domestic violence survivors, and victims of human trafficking.
Child tax credit
This tax credit began on July 15, 2021 and will run through December 15, 2021.
Under this credit, parents of children ages 6 to 17 will receive $3,000 to $3,600 for children under age 6. The amount is gradually reduced for couples earning over $150,000 and individuals earning over $75,000 per year. Families eligible for the full credit will get payments of up to $300 per child per month from July through the end of the year.
Student loan forgiveness
This program started in December 2020 and will run through December 31, 2025. During this time, student loans are tax free instead of having the forgiven debt treated as taxable income.
Low income home energy assistance program (LIHEAP)
The Pandemic Aid Package included $4.5 billion to help families with home heating and cooling costs. This cash grant is one-time payment sent directly to the utility company to be credited on your bill.
Federal unemployment insurance payments will remain at $300 per week and will expire on September 6, 2021. The first $10,200 in unemployment payments are nontaxable for households with incomes under $150,000. The pandemic unemployment benefits are in addition to the standard weekly state UI benefits.
The American Rescue Plan extended or reauthorized several federally funded extensions and expansions of state unemployment insurance (UI) programs, including Federal Pandemic Unemployment Compensation (FPUC), Pandemic Unemployment Assistance (PUA), and Federal Emergency Unemployment Compensation (PEUC).
In its current iteration, FPUC provides an additional $300 per-week for unemployed persons. PUA provides unemployment benefits to those not typically eligible for UI benefits, including gig economy and self-employed workers, and PEUC provides an additional 29 weeks of benefits for those who have exhausted regular state and federal UI.
Many of the states terminating benefits early have cited labor shortages as the primary reason for the decision, although unemployment rates in most of these states are lower than the national average.
All three benefits are payable through September 4th under the bill. However, over recent weeks, 26 states have decided to end federal UI benefits between two to three months earlier than their official September 6th deadline.
Additionally, residents in three of the states that suspended unemployment benefits early have filed a class action lawsuit against the state to have payments continued.
The state of Indiana was first, then Texas and Maryland, and now the state of Florida will be next, according to the AFL-CIO petition to Governor DeSantis, to reverse their decision on ending the supplement early.
The national unemployment rate in June 2021 was 5.9%, while the average unemployment rate of the states ending federal UI benefits early was 4.7%. Of the 26 states, only six recorded unemployment rates that were higher than the national rate in June, including Alaska, Arizona, Louisiana, Maryland, Mississippi, and Texas.
According to CNBC, job searches are about 4% below the national average in Alaska, Iowa, Mississippi, and Missouri, which stopped paying the federal benefits as of June 12th, according to the analysis published in late June.
To read more about states ending unemployment benefits, click here.
It's difficult to say with certainty what effect the cessation of enhanced benefits is having on the labor market without more time to pass and further data; however, there may be other reasons contributing to lethargic labor market dynamics.
The labor market and workforce concerns
For one, COVID-19 health concerns could be a likely cause for many workers to remain home. The highly contagious Delta variant is twice as transmissible as the original virus and has accounted for a greater share of US cases. Additionally, only 57% of the total US population has been fully vaccinated as of August 2021, according to the latest report.
Workers may also not be returning due to a variety of other factors. This includes the continued at-home care of loved ones who are still recovering from being sick or elder care because nursing homes have breached capacity. Childcare may also be an issue depending on whether or not schools will remain in session with the spike in cases and the lack of vaccine for children under 12. Some daycares have permanently closed and there is a shortage of childcare workers nationwide. The American Rescue Plan awarded $39 billion to childcare centers, but more is needed.
Workers may also be hesitant to rejoin the workforce because they may be holding out for higher wages or they are trying to switch job industries. Several large US companies have publicly raised their minimum wages during the past few years. Costco recently raised its minimum wage to $16 an hour, Target and Amazon both raised their wages to $15 an hour, and Bank of America increased their minimum wage to $20.
Another challenge in the workforce market is the amount of retirees. Millions of baby boomers retire annually from the US labor force, but in the past year the number of Boomers retiring has doubled.
The first quarter of this year, 30.3 million Boomers have reported they were out of the labor force due to retirement, according to the Pew Research Center.
This is 2.7 million more than in the first quarter of 2020, which is a much larger increase than the average 2 million retirees annually over the last decade. This will undoubtedly have an impact on the labor markets as businesses continue to face worker shortages.
Industries facing shortages
Supply chains and transportation of goods continue to be a challenge due to a truck driver shortage. Before the pandemic, there was already a truck driver shortage of an estimated 61,000 drivers. As of April 2021, BLS reports the transportation industry to still be short more than 59,000 drivers. With more than 70% of goods relying on trucks to get to their final destinations, this has made a big impact on the industry and those who rely on trucks for their operations.
Hotels and restaurants are also facing a staff shortage. Because hotels cannot find enough staff, they have been forced to operate at 40% less capacity, which may raise hotel rates overall. Hoteliers have resorted to subsidizing housing for employees and working with colleges to create internships. Others are offering cash bonuses, free rooms, and day one health benefits among many things.
Restaurants are also facing a shortage in staff, from front of the house to the kitchen. On top of that, the cost of produce is up 30% which affects the bottom lines for hotel kitchens and restaurants nationwide. Additionally, VISA problems and wait times are making it worse for international employees.
If you are having trouble navigating the current staffing market, we are here to help. Get in touch with our expert teams to get your operation back on track.
Article updated as of September 1, 2021
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