Businesses are scrambling to fill job vacancies as the country continues to reopen from the coronavirus pandemic, but the reality is that there simply are not enough people looking for work. The state of Pennsylvania made the right move to pull back on the relaxed standards for unemployment benefits and to reinstate the requirement that those collecting benefits must be actively looking for work.
When the pandemic began more than a year ago, Pennsylvania relaxed some of its rules related to unemployment compensation. In addition to suspending the "waiting week" in which claimants did not receive benefits during their first week of unemployment, the state also lifted its work search and work registration requirements. Those collecting unemployment compensation during the past year have not been required to prove that they applied or searched for a new job.
With most restrictions on businesses now being lifted as more people are vaccinated, and since plenty of jobs are available, the state Department of Labor and Industry announced that starting in July the job search requirements will once again be in effect. It's a decision that makes sense.
If businesses are to rebound from more than a year of upheaval and uncertainty, they will need to fill the millions of job openings across the country. The Bureau of Labor Statistics reported that in March the number of job openings nationwide reached a high of 8.1 million, while the number of new hires remained flat at about 6 million. The gap of some 2 million between job openings and hires was the largest margin on record.
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Businesses in many sectors — notably the restaurant and hospitality industry as well as retail — are offering bonuses and perks to try to fill job openings that have caused them in some cases to reduce operating hours because of limited staff. They should also remember the concept of supply and demand and consider a hike in hourly wage rates to attract prospective employees. In the end, it is about what the market will bear.
Some say the shortage of workers is linked directly to the pandemic-related extension in the unemployment compensation coverage period, as well as to the payout of "extra" unemployment benefits that amount to about $300 a week. But there was a labor shortage even before the pandemic.
Unemployment compensation is designed as a stopgap to help individuals and families stay afloat financially while they recover from a job loss. Recovering from a job loss, over the long term, means (for most people) finding a new job. With businesses reopening and the economy inching back toward something resembling normal, state officials are right to once again require those collecting unemployment benefits to actively search for work.