Virginia won’t end enhanced unemployment benefits early like some states, Northam says

Virginia

RICHMOND, Va. (WRIC) — As some governors are ending enhanced unemployment benefits early, Gov. Ralph Northam says that won’t happen in Virginia.

“There are individuals in Virginia that are having difficulty finding employment and, until they do that, federal help is something that will help them pay their bills. So we don’t have any plans of eliminating that in Virginia,” Northam told 8News in an interview.

In the American Rescue Plan, Congress extended the $300 federal supplement to state unemployment benefits through September 6th.

However, 25 states with Republican governors have recently announced plans to cut them off early as many businesses struggle to hire employees.

“While these federal programs provided important temporary relief, vaccines and jobs are now in good supply. And we have a critical problem where businesses across our state are trying to hire more people, but many are facing severe worker shortages,” Maryland Gov. Larry Hogan said in a statement announcing the state’s policy change.

According to new Labor Department data, U.S. employers posted a record 9.3 million job openings in April but employers hired just 6.1 million. Some say that’s a sign positions are opening faster than businesses can fill them.

In a recent survey from the Virginia Restaurant, Lodging and Travel Association, 84% of restaurants said current staffing levels are lower than normal, with 42% saying they are more than 20% below normal levels.

“We still haven’t been able to go to full capacity because we don’t have enough staff,” said Joe Young, the general manager of Tarrant’s Cafe in Richmond.

Young said he is trying to hire 10 new employees but, even after raising salaries, he is struggling to find anyone qualified. He said he has seen a slight increase in applications since Virginia reinstated unemployment work search requirements but he still thinks it’s time for enhanced benefits to end.

“I think it will have an impact. It’ll force people to reassess relying on the unemployment benefits and make them get back in the workforce,” Young said.

Yet many have contested the notion that hiring woes are being caused by the federal boost to benefits, including President Joe Biden.

Some have proposed offering one-time “back to work bonuses” to expedite economic recovery.

On Friday, Northam held a press conference to launch a “Return to Earn” grant program. Businesses with 100 employees or less paying new hires at least $15 per hour are eligible, though Northam’s Chief Workforce Advisor Megan Healy said tip-based positions will not be excluded.

The program will use $3 million in federal funds to give new hires a maximum bonus of $1,000 to offset the cost of things like transportation and childcare.

“That will make a big difference to a lot of people and will help them overcome some of the issues that are keeping them out of the workforce,” Northam said.

Eligible businesses will be responsible for covering half of the cost of the bonus. Northam said the state will match stipends of up to $500 –either in a lump sum or installments–for those hired after May 31st.

Late Friday, Senate Republicans Tommy Norment (R – James City) and Stephen Newman (R – Bedford) issued a statement in response to Northam’s program.

“Following the ‘Back to Work’ bonuses we proposed last month, Gov. Northam has now proposed ‘Return to Earn,'” the statement said. “His scheme, however, is clearly designed to adhere to a partisan agenda and not in the best interests of workers, employers or the Commonwealth.”

The statement continues: “Had the Governor called a special session to act on our plan as we suggested on May 25, the proposal he offered today could have been more robust, benefitting employees and employers while rectifying our current employment crisis…We are a special session away from getting this right.”

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