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Enhanced Unemployment Benefits End, But Will People Return To Workforce?

5September 2021

MINNEAPOLIS (WCCO) — Thousands of Minnesotans are losing their federal unemployment benefits Sunday.

There are three different federal programs ending:

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1. Pandemic Unemployment Compensation (PUC), which offers an extra $300 per week.

2. Pandemic Emergency Unemployment Compensation (PEUC), an extension of benefits so a person can receive assistance longer while continuing a job search.

3. Pandemic Unemployment Assistance program (PUA), which offers benefits to those usually not eligible for unemployment benefits like self-employed people, freelancers or gig workers.

Many employers hopes losing the unemployment benefits will lead to more people returning to the workforce. However, a Minneapolis restaurant doesn’t think it’s the answer to current staffing shortages.

French Meadow Bakery and Café in Minneapolis was crowded Sunday, as people came to get their fresh baked goods and coffee. General manager Francois Paradeise said the restaurant has made significant strides since the pandemic first slowed them down last year, but staffing remains an issue. French Meadow recently lost 13 employees due to the start of school.

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(credit: CBS)

“I think after the unemployment support is going to dwindle, well some are going to readjust what their income is, what their needs [are] and they come out. We hope they come out,” Paradeise said.

Although federal unemployment benefits are ending, Paradeise said he doesn’t foresee the restaurant getting an influx of applications, mainly due to rising COVID-19 cases.

“A lot of them don’t want to come back because they’re scared,” Paradeise said.

So far, French Meadow has not seen any increase of applicants. Paradeise added that larger staffing is ideal during the summer months, but sales nationwide typically go down during the start of fall, which means restaurants won’t need as many workers anyway.

According to Career Force, a key component in hiring challenges is because so many industries are hiring at the same time. Usually hiring is more spread out, but during the rapid economic rebound, it’s now happening all at once.

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Career Force said even during pre-pandemic years, the number of jobs outweigh the number of job seekers. The reason it feels like hiring is more difficult now is due to several factors, including COVID-19; childcare challenges; mismatches between people looking for work and the types of jobs available; and the cushion that the enhanced benefits allowed workers to wait and find a job that is the best fit for them.

 

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