After jobless workers receive $600 weekly stimulus stipends with their state unemployment checks, what happens when businesses start to reopen with a revitalized economy after the coronavirus subsides?
Do they return to work at possibly a lower salary, or do they decide to get the stimulus checks as long as they last? The stimulus checks are part of the $2 trillion congressional coronavirus relief package signed by President Trump in March.
The questions haven’t been at the top of local agendas, but they are becoming more important as cities and states strive for normalcy.
According to news reports, Iowa, Oklahoma and other states reopening soon are telling workers to return to their jobs or risk losing unemployment benefits.
If shop owners can expect their employees to return to work after the pandemic, at least two Pine Belt business leaders believe documentation will make a difference.
“(Keeping accurate records) is the ultimate, I mean, that’s the first and main step to anything involving unemployment,” said Valerie Wilson, executive director of the Petal Area Chamber of Commerce. “A lot of our smaller business owners just aren’t knowledgeable enough on how to protect themselves when they let somebody go. It’s a difficult situation.”
Todd Jackson, vice president of economic development for the Area Development Partnership, said relying on the stimulus checks will not work.
“While the additional $600 weekly stimulus payments provided through expanded unemployment benefits under the CARES Act could possibly entice some people to not seek gainful employment, the reality remains that these benefits will expire at the end of July,” he said. “Therefore, it is extremely short-sighted to think that relying on these short-term benefits is a pathway to a successful long-term future.”
Wilson said she became of the situation on the Internet.
“I belong to a Facebook group of Chamber of Commerce professionals of about 90,000, so it’s a huge group,” she said. “It will bring up different topics and this is one that came up. I was shocked at the number of comments on it from across the country, saying, ‘Yeah, you know many of my members are going through this.’
“I don’t think we’re feeling it as much down here. But, I think that’s because we’ve kind of been behind on everything as far as people applying for unemployment. This is really more prevalent among the wage earners that are at a lower level.”
Jackson said the Hattiesburg metro area has the growth potential for recouping the stimulus funds.
“There is no doubt that expanded unemployment benefits are a necessary safety net during these challenging times as we all navigate the impacts of COVID-19,” he said. “Fortunately, we are blessed with a vibrant and diverse economy here in Hattiesburg that consistently leads the state of Mississippi in job growth and has been ranked in the Top 20 metros in the nation in job growth within recent years.
“Even with this vibrant job market, unemployment rates are increasing as a result of this situation, and there is a potential for this to impact our labor force participation rate as well. The Hattiesburg metro has a labor force participation rate of 58.6 percent, which is 2 percent higher than the state of Mississippi.”
Wilson said the initial burst of funding sounds good.
“Getting that extra $600 a week is like ‘Wow,’” she said. “Heck, I’d go on unemployment for that. You know they’re making a whole lot more, but they’re short sighted and they’re not realizing this is only going to last maybe until June, unless they extend it. But, at some point they’re going to lose their unemployment benefits.”
The business owner also has a lot of pressure from trying to get their employees to return.
“They just hit (the owner) completely off guard,” she said. “They weren’t thinking, especially the mom-and-pops, about what is the process of releasing somebody. ‘What do I need to do to protect myself?’ So, they probably just called their people in and said, ‘Hey, sorry, we’re going to have to close.’ They didn’t document it; they didn’t send them a formal letter. They didn’t do anything that will perhaps save them the same thing when they want them coming back there.”
Businesses invest time and training in employees, Wilson said.
“When they say, ‘We’re not coming back,’ not only have they lost an employee, but now they’re going to have to train another one all over again, which is an added expense,” she said. “For the business owner, it would be much better if these people just came back to work and picked up where they left off.”