News this week that U.S. jobless claims ticked up stands in stark contrast to a job market that is in desperate need of labor. This conflict in facts should spur both state and federal governments to reassess their assistance program as the country’s economy recovers from the COVID-19 pandemic.
Help wanted signs are sprouting like weeds everywhere in the county and across the country. Businesses are already swamped with increased demand which they are finding difficult, if not impossible, to meet. The result is these businesses are cutting back on their operations, which will eventually cause a ripple effect on the market since reduced operations mean fewer employees will be needed, thereby putting more people out of work.
The recent conflict between RuckerJohns Restaurant and its landlord at Emerald Plantation shopping center, Emerald Isle, is a good example of the conflicts that are being created by government largesse.
The restaurant owners, concerned that the employees at both their Wilmington and Emerald Isle locations were overworked due to short staffing, opted to close on Sundays to give them a rest day. Debbie Rucker, co-owner of the restaurants noted that Sundays are usually very lucrative business days, but at the same time she and her partners knew that unless the restaurant staff was not given some relief, they would lose some of them either due to exhaustion or to a job with far less stress.
The result of this decision was a legal dispute with the Emerald Plantation landlord that only compounded the challenges for the restaurant owners and staff. That dispute has been settled and the restaurant will continue to close on Sunday. But the problem of staff shortages, a situation that other restaurants and businesses in the county are experiencing, remains.
Kathy Jasso, general manager of Trade Winds restaurant in Emerald Isle told News-Times reporter Brad Rich that the lack of complete and consistent staffing requires daily revision of the restaurants hours. “We have to game plan every day,” she said. “We try to be consistent every day but it is not easy.”
In the RuckerJohns case the real culprit is the federal government, which created an incentive for many Americans to not seek employment, offering lucrative unemployment compensation of $600 per week just to sit around and supposedly look for jobs.
A recent AP article noted that “employers are posting job openings faster than applicants can fill them.” In April a record 9.3 million help want ads were posted, a 12% increase over the number posted in March. And yet unemployment claims remained high and, as announced this week, have risen.
As is typical of elected officials who are always looking to satisfy voters so as to assure a successful re-election campaign, money is always the first solution. And in the case of the lost jobs resulting from government mandated business closures, Congress has pumped money into the unemployment programs to support the millions of laid-off workers.
But the tide has changed and the country’s economy is rebounding as businesses reopen. Despite this rebound the federal government unemployment largesse continues to flow so the incentive remains for the unemployed to maintain the status quo of staying at home. Until these incentives are removed or reduced, fewer job openings will be filled and businesses will, as in the case of RuckerJohns, begin to reduce their operations. The reduction in hours and services will have a cascading effect on other businesses which will likewise reduce staff to meet the declining demands and the downward cycle will continue.
If the federal government will step out of the way and let the private market work as it is trying desperately to do, the country’s economy can grow at a sustainable level. But as long as the federal government keeps its proverbial finger on the job market scales, market disruptions will continue and eventually more, not fewer, will be forced back on the unemployment line.
It is well past time for government, state and national, to step out of the way and let the free market work.