Unemployment benefits are ending: How this has, and will, affect the labor market


ELMIRA, NY (WETM) – While the federal benefits have been helping the unemployed, small businesses have had trouble staying employed. The $300 weekly federal unemployment benefits are set to expire on Saturday, and experts are predicting that this will bring people back to the workforce.

“You could see an uptick in applications for some of the lower-paying jobs in the area,” said Matt Burr, Professor of Business Administration at Elmira College.

Ever since the pandemic began, The Sauce Boss in Elmira has been understaffed. Owner Anthony Santulli says as a small business, it’s hard to compete with bigger corporations, and the continued unemployment benefits have not helped.

“Everybody wants to stay home, the benefits outweigh actually getting out there and working… There’s just a huge shortage of workers. nobody wants to work,” said Santulli.

Some days, The Sauce Boss has had to completely close the restaurant due to a lack of staff. Santulli hopes that the unemployment benefits ending will incentivize more people to get back to the workforce.

“Things just fall through the cracks when you don’t have as many employees…I do a lot of the work myself,” said Santulli. “As a business owner, you got to make yourself ten times more available because if somebody can’t make it to work then it’s just on your shoulders.”

Many assume that workers on unemployment benefits simply don’t want to work, but Burr provides a counterargument to that, saying the expectations of higher management have changed.

“It’s not always about people just wanting to sit around collect unemployment… it’s also about the culture in the organization and if you’re not treating your people well and if there’s bad management, that has an issue on turnover as well,” said Burr.

The growing focus on workplace culture has played into the shift in the power dynamics between employers and employees. Burr says it’s not just lower-income jobs that are seeing this issue. He says many high-paying jobs in the area have not been able to be filled.

“The employees and the applicants are the ones who get to pick and choose where they go at this point…It’s up to us as business owners and managers and leaders to create a culture that we are recruiting and retaining top talent,” said Burr.

One point six million new yorkers will be losing their unemployment benefits on Saturday. Burr says it is possible to see a decrease in spending from people who have been solely relying on benefits.

“You could see people pull back and put more in savings if people don’t have that additional income coming in,” said Burr. “But I don’t think it’s going to have a major impact at this point. we’ve got 10 million jobs open, people need to go back to work.”

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