OCEAN CITY — Ocean City’s lagging seasonal workforce could be getting a timely shot in the arm after Gov. Larry Hogan announced this week the state is set to discontinue enhanced federal unemployment benefits.
The reasons for the seasonal workforce shortage in Ocean City are many, including an apparent affordable housing shortage and complications with the J-1 visa student-worker program, but no less important are the federally-enhanced unemployment benefits for those who have still not returned to the workforce. Throughout the pandemic, many workers have remained on unemployment, and some rightfully so, after getting displaced during COVID.
For others, the $300 per week in added federal benefits on top of what the state provides ($430 per week for max earners) has proven to be a disincentive to return to the workforce. In some cases, an employee can and does earn more per week on unemployment than if he or she returned to the workforce. On Tuesday, however, Hogan announced Maryland was joining 23 other states in announcing they will soon discontinue the $300 federal unemployment enhancement.
Hogan cited a steadily recovering state economy and a critical labor shortage in many sectors as reason enough to discontinue the federal benefits enhancements.
“Our health and economic recovery continues to outpace the nation and we have reached the benchmark set by President Biden of vaccinating 70% of adults,” he said. “While these federal programs provided important temporary relief, vaccines and jobs are now in good supply.”
Earlier this spring, state hospitality associations, including the Ocean City Hotel-Motel-Restaurant Association (OCHMRA) urged Hogan to discontinue the federal benefits in an attempt to ease the critical labor shortage in the resort and across the state. In May, the Mayor and Council voted to send a letter to Hogan encouraging him to discontinue the federally-enhanced benefits. On Tuesday, Hogan said the growing labor shortage was part of the reason for his decision.
“We have a critical problem where businesses across our state are trying to hire more people, but many are facing severe worker shortages,” he said. “After 12 consecutive months of job growth, we look forward to getting more Marylanders back to work.”
As a result, claimants will no longer be able to submit new applications for the federal programs after July 3. If claimants are waiting to receive an eligibility determination for the federal programs, the state’s Department of Labor will ensure they receive all payments owed to them prior to July 3. In addition, Hogan has also reinstated job search requirements for those receiving state and federal benefits. Labor Secretary Tiffany Robinson said with the state’s economy improving, the time was right to wean some off enhanced benefits and get back into the workforce.
“As our state continues to make great progress in its economic recovery, employers are successfully reopening for business and creating job opportunities,” she said. “Our team is available to connect jobseekers with a wide variety of training programs and resources so they can find meaningful employment and return to the workforce.”
Locally, Hogan’s announcement on Tuesday was met as welcome news from a business community struggling to fill out their seasonal workforce rosters, according to OCHMRA Executive Director Susan Jones.
“We were extremely pleased to learn of the governor ending the enhanced unemployment benefits,” she said. “It is time for our nation to get back to normal for the mental health of all. For more than a year, businesses have altered operational hours to accommodate the limited number of staff. Not only does this mean reduced revenues for the operator, but it also means less taxes to state and local governments because businesses cannot maximize on the number of hours opened.”
Not all were pleased with the governor’s decision, however. State Senate President Bill Ferguson (D-46-Baltimore City) called the decision to end federal unemployment benefits misguided at this time.
“There have been many thoughtful decisions made by Governor Hogan during this pandemic,” he said. “This is not one of them. This rash and rushed decision will hurt Marylanders who have been hit the hardest during the pandemic, having lost jobs through no fault of their own.”
Ferguson urged Hogan to reverse his decision, or at least delay it.
“To rebuild stronger, Maryland must follow a clear plan of recovery that gives workers, employers and the economy time to adjust predictably,” he said. “I urge the governor to reverse or delay this decision, and, instead, refocus his administration’s efforts to ensure all Marylanders and Maryland businesses have the tools they need to survive and thrive in the post-COVID Maryland economy.”