A roadside banner invites potential employees outside a business in Hattiesburg, Mississippi, March 27, 2021. Utah Governor Cox hopes that by removing COVID-19 unemployment benefits, the unemployed from Utah will return to work. (Rogelio V. Solis, Associated Press)
SALT LAKE CITY – Gov. Spencer Cox was hoping to force jobless Utahns to look for work more aggressively when they decided to suspend pandemic-related federal unemployment insurance benefits on June 26, more than two months before they expire planned.
But data from a new study suggests the plan didn’t quite lead to those results, and Utah’s leading economy may be at least partially to blame.
A two-part survey conducted in June by researchers at the University of Utah’s David Eccles School of Business sampled the feelings of jobless business owners and Utahns, including 500 households, about the outcome of the changes. in state unemployment benefits, among other issues.
One of the most notable data points goes to the heart of Cox’s hopes that the removal of benefits and extended benefits would entice job seekers.
“To assess the impact of the expiration of additional (unemployment insurance) payments, we asked respondents if this expiration would influence the time and effort they devote to job search or financial planning. “Says the investigation report. “More than 90% of those polled say that the expiry of (unemployment) benefits will have no impact on their efforts to find a job or their saving behavior.”
Unemployed survey respondents also weighed in resoundingly when asked whether the early cancellation of extended federal benefits would cause them to consider lower-paying employment opportunities – none said the change would make them feel better. would push them to take a lower paying job.
While the U.S. business school survey may not reflect the outcome Cox was looking for, one of the report’s authors said the circumstances behind these responses from the unemployed in Utah revolved around vibrant economic health and still in improving the state.
Nathan Seegert is a professor of finance at the Eccles School of Business and co-author of the report, which he says is part of an ongoing project to track Utah economic indicators and sentiment.
Seegert said a combination of factors, all of which are indicators of a strong economy, put the unemployed in a position of power when it comes to seeking that next opportunity.
“The model would predict that if UI wages went down, you would be more likely to accept a lower wage to get out of unemployment,” Seegert said. “But that’s not what we’re seeing at all and in our survey no one said they would take a lower paying job.
“This is in part due to consumer expectations regarding rising prices for goods and services as well as the housing market. While price increases are evidence of an economic recovery, it puts job seekers in a hurry. mind that they can’t afford to jump to a lower level. salary. “
And Seegert said Utah’s ultra-low unemployment rate, another positive economic indicator, also strengthens the ability of the unemployed to be picky.
“The state’s unemployment rate is very low,” Seegert said. “If employees feel like they can get a new job tomorrow, it puts them in a much better bargaining position.”
The market should not compete with the government for workers.
– Utah Governor Spencer Cox
Cox spokeswoman Jennifer Napier-Pearce said the Eccles report, which also highlighted a plethora of positive data from workers and business owners, was further proof that Utah was on track to fully recover from recessionary conditions caused by COVID-19.
“These data continue to show what we were hoping for: a return to normal in the economy and the labor market,” Napier-Pearce said in a statement. “We want to continue to help every Utahn find meaningful employment and help every business thrive.
“We are experiencing labor shortages again and although it is a challenge for companies, we hope that each Utahn takes this opportunity to improve their respective professional opportunities.”
In May, Cox said his decision to end pandemic-related federal unemployment benefits to some 24,000 Utahns before the scheduled end of benefits in September was the right move amid the rise in employment in the Status and robust recovery from the impacts of COVID-19.
“This is the next natural step in getting the condition and people’s lives back to normal,” Cox said when the decision was announced. “I believe in the value of work. With the lowest unemployment rate in the country… and many well-paying jobs available today, it makes sense to move away from those added benefits that were never intended to be. be permanent.
“The market should not be competing with the government for workers.”
He also noted that other “safety net programs” such as assistance with rent, utilities, food and medical bills will still be available.
Cox is among about 20 Republican state governors across the United States who made similar decisions about ending federal pandemic benefits in June, saying the added benefit keeps people from wanting to work .
Labor experts say the nationwide labor shortage isn’t just about the additional $ 300 payment. Some unemployed people have also been reluctant to look for work because of fear of catching the virus. Others have found new occupations rather than returning to their old jobs. And many women, especially working mothers, have had to leave the workforce to care for children.
In early June, the Utah Department of Workforce Services reported that just over 24,700 residents were receiving some type of unemployment benefit, of which about 12,000 were on traditional benefits as well as the pandemic allowance of $ 300 per week funded by the federal government. About 11,000 others were still receiving unemployment insurance benefits under federal extensions also created to mitigate the economic impacts of COVID-19 on American workers. And about 1,200 Utah workers – people employed by companies like Uber, Lyft, GrubHub and others who are classified as contractors exempt from typical unemployment benefits – have also received benefits under warrants. federal emergency. While federal deadlines for most pandemic-related benefits for the unemployed are due to expire in early September, Cox’s order cut them 10 weeks earlier than expected.
As of July 24, Workforce Services reported that 11,768 Utahns were still registered as unemployed.
Some Utah lawmakers saw the early cancellation of benefits as an unwelcome change.
Following Cox’s announcement, Utah House Minority Leader Brian King, D-Salt Lake City, highlighted these factors while expressing frustration with the governor’s decision to end the benefits. in Utah.
“I mean, it’s the perfect example of a disconnect between people in normal life and people who are struggling to get back on their feet,” King said. “There are many, many people who are worried – afraid – of going back to work.”
What “frustrates me the most,” King said, is that Cox’s decision “reflects this thinking from many across the aisle that people don’t want to work. This is fundamentally wrong. “
Seegert said Utah’s current enviable economic vitality must pay tribute to the actions taken by Cox and state lawmakers, as well as the federal economic stimulus measures related to the pandemic, which have enabled the state to perform better than almost any other place in the country.
“The Utah government has responded extremely well to the economic conditions of the pandemic,” Seegert said. “The state’s social safety nets have worked very well … and the leaders just had the foresight to do a lot of things to keep the economic engine running.”