More NJ workers reject jobs to collect benefits
There are continuing signs of an expanding labor shortage in New Jersey. Many blame enhanced federal unemployment benefits.
When Point Pleasant Beach advertised for workers to pick up litter in town parking lots, they offered $24 per hour. They did not receive a single applicant in the three weeks the ad was posted. An angry Mayor Paul Kanitra ranted on Facebook, "Unfortunately, with the unemployment dollars being doled out by Trenton, we've had zero applicants." Kinatra says there have been applicants since.
Just about every sector of the New Jersey business economy is dealing with similar issues. The hospitality industry is feeling it the worst. As things get back to normal, shore businesses have been desperate to hire. It's estimated that tens of thousands of jobs have gone unfilled, even as employers offer $15 an hour or more.
Two rival water parks in South Jersey are battling for summer hires. Sahara Sam's in West Berlin is offering $15 per hour and a bonus if workers stay on through September. Just a few miles away, Clemmenton Splash Park is offering $18 per hour and a $500 signing bonus.
More than half of US states have already canceled the federal unemployment enhancement. Some have decided to convert those funds into an incentive plan to take a got and get off unemployment. Governor Phil Murphy has said he has no intention of canceling the benefit in New Jersey, but has acknowledged it could be a factor in the labor shortage. Murphy has also signaled he thinks its a good thing, because it is forcing businesses to pay their workers more.
Before the pandemic, $15 per hour would have been considered a good starting salary for many jobs. Now, there are few takers. As congress was working on a massive pandemic relief bill, there were early warnings the enhanced unemployment benefits could backfire and state loopholes could allow workers to collect more than 100% of their salary. It's unclear if that is occurring here, but there is at least anecdotal evidence it is the case for some. With benefits not set to expire until September, its feared many workers will just take the summer off.
The break-even point varies and involves many factors. For most workers in New Jersey, it would be around $15 per hour. However, it could be as high as $19 or $20 per hour for many. After denying any detrimental effects of the pandemic unemployment aid, President Joe Biden finally conceded it "makes sense" to allow the federal benefits to expire in September. Many want then to end before that, but that is not likely to happen. However, White House Press Secretary Jen Psaki said governors have every right not to accept the extra benefits.