Managers hopeful end of pandemic unemployment funding will help labor shortage

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MOUNTAIN BROOK, Ala. (WIAT) — Alabamians receiving unemployment may see their checks stop coming in, or the dollar amount drop. On Monday, Governor Kay Ivey announced the state will no longer participate in any of the federal pandemic unemployment programs, effective June 19.

Local restaurants are hopeful this move will encourage people to get back into the workforce and apply to their jobs. At Char Bar 7 in Mountain Brook, they have far fewer tables on the dining room floor, and it’s not because of state restrictions.

“I might look kinda hard to believe, but we don’t have 12 tables that we initially had before COVID,” said Michelle Fleming, the assistant manager. “We couldn’t put those tables back in here now if we wanted to because we don’t have the staff to fulfill it.”

Char Bar has been short-staffed for months. Fleming said they will go weeks or even months without receiving a single application.

“I mean if you can make more money staying home–very simple in my opinion,” she said. “ Before COVID, we would get probably 5 to 10 applicants a week we’re not seeing that even in a month’s time. And maybe two months’ time.”

The department of labor said Alabama’s unemployment rate is the lowest in the southeast: 3.8%.

The state labor secretary, Fitzgerald Washington, said now is the time to end the additional unemployment payments.

“In March 2020 and what transpired were mass layoffs across the state,” he said. “10 years of strong economic growth went down the tubes [in what] seems like overnight. There have been over 1 million initial claims filed since March of last year and ADOL has paid out nearly $5 billion in benefits. Now that’s more benefits that we paid out in the last 12 months in the last 12 years combined.”

Washington said the emergency funds are contributing to the labor shortage.

“Unemployment insurance or assistance is meant to be a short-term relief program during immersive situations,” said Washington. “But now it’s contributing to a labor shortage is compromise true economic recovery.”

State officials and some restaurants hope the labor shortage will soon end with fewer opportunities to claim unemployment.

“Well, I’m really hoping that once they don’t have that added extra money, they will have to get out,” said Fleming. “We have some openings here and we were are like every business right now. We’re all suffering it’s not just char bar.”

To read more on the changes in pandemic unemployment emergency funding, click here.

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