OCEAN CITY — Almost no sooner than resort officials earlier this week decided to write Gov. Larry Hogan about enhanced unemployment benefits and their impact on the labor crunch did the governor act on the issue.
At the close of Tuesday’s work session, Council President Matt James asked Mayor Rick Meehan to reach out to Hogan about the federal boost to unemployment benefits and their impact on an acute labor shortage in the resort and across the state. By Wednesday afternoon, likely before Meehan’s letter reached the governor, Hogan announced he was reinstating the job search requirements for those receiving unemployment benefits.
“To further accelerate our economic recovery, I have directed the Department of Labor to work in collaboration with the federal administration to begin the process of reinstating the work search requirements so we can connect more job seekers with employment opportunities,” Hogan said on Wednesday during a larger press conference on easing COVID restrictions.
Last week, Montana announced it was eliminating the $300 federal enhancement for residents on unemployment on top of what the state was ready paying in benefits. In the days since, a handful of other states have announced they are following suit.
Those on unemployment throughout the pandemic have been receiving their regular benefit allocation from the state along with the $300 boost in benefits from the federal government. For an individual getting the state maximum of around $400, the extra $300 from the federal government provides them with more income then they might and probably would from returning to work.
The situation has at least contributed to the labor shortage locally, and in Maryland and across the country, although it is not the only reason. There are some who are concerned about returning to work with COVID still lingering, despite vaccination rates ramping up.
Locally, there also appears to be an affordable housing shortage, making it difficult for some desiring to come to work in the resort to find accommodations. In addition, the uncertainties surrounding the J-1 summer work and travel program are also contributing to the labor shortage locally.
All in all, however, the enhanced unemployment situation is being pointed to as a contributor to the labor crunch, locally and nationally.
“It’s being discussed here and it is being discussed elsewhere now,” James said. “A week and a half ago, we met with the ambassador to El Salvador about having the opportunity to bring in some workers whether they’re J-1 of H-2B visas and we continue to have people commenting on how we won’t hire Americans to do these jobs.”
James referenced a Wall Street Journal article from last weekend outlining the problems with enhanced unemployment benefits, the impact on the workforce and what measures some states are now taking.
“The article is about some of the benefits that are being handed out across the country from the federal level,” he said. “It talks about how some governors around the country are taking measures to not accept the additional $300 from the federal government. … We hear about businesses all over not getting enough help and struggling to open. Some people are really taking advantage of the unemployment situation, and some probably do need it, but I think the system is being abused.”
By Wednesday, Hogan had already addressed the situation by reinstating the job search requirement for those remaining on unemployment and specifically referenced Ocean City in response to a question.
“We’ve been following the other states and taking to other governors about this,” he said. “We have certainly heard from business owners, not just in Ocean City, but all across the state, particularly in the hospitality and restaurant businesses, about the difficulty in getting people back to work, which is precisely why we’re putting the work search requirement back in.”
Hogan agreed there were some who have chosen to remain on unemployment when the job market is robust.
“It’s not just anecdotal,” he said. “There is no question some people have made the decision to stay home and collect unemployment rather than returning to work. We hear that every day from hundreds of people. We think the step we’re taking is probably the right one. There are some people who are trying to find work and really need those benefits. At this point, we’re taking the steps we need to take.”
During Tuesday’s work session, James urged Meehan to reach out to the Hogan administration about taking some measure to combat the enhanced unemployment situation.
“With the consent of the rest of the council, I’d like to ask the mayor to reach out to Governor Hogan and explore options to get people to return to work, whether it’s not accepting the additional $300 per week in benefits or offering a return-to-work bonus,” he said. “At least make it known that we’re struggling and that we need workers. There are plenty of jobs, but people don’t want to work because they’re making so much money from the federal and state government.”
Councilman Lloyd Martin, who owns multiple businesses in town and has seen first-hand the labor shortage, made a motion to have Meehan reach out to Hogan. The council voted unanimously to have Meehan write to the governor about the issue.
“We need to write to the governor to explore ways of getting people off unemployment and back to work,” he said. “I agree with Matt. We get somebody inquiring about a job and they don’t show up for an interview. It’s really a problem.”
James said not only are unemployment benefits enhanced, but a key component in the program has been removed during the pandemic.
“Right now, the state has removed the job search requirement,” he said. “Previously, if you were on unemployment, you had to show you were actively looking for a job. People are sitting home and not working because the federal and state government is paying them not to go to work. There are plenty of opportunities here.”
The call for Meehan to write to the governor about the enhanced unemployment situation is now probably moot because Hogan on Wednesday reinstated the job search requirement, which will likely ease the situation and get some individuals back into the workforce.
